The choice of an accountant for an online business or an electronic store in Bulgaria is key to the successful and lawful functioning of commercial activity. Owners of online stores often ask themselves how best to organize their accounting, what documents need to be prepared for sales accounting, and how to properly deal with the challenges of tax treatment of this type of trade. In the context of online cash on delivery sales, for example, there are specific documentation and reporting requirements that require a competent accountant with experience in e-commerce. How to find a specialist who understands e-commerce accounting, or what are the differences in prices and services of accountants in Plovdiv and Sofia? The questions are many, including how the registration of an online store in the NRA is carried out and what are the peculiarities of accounting for income and expenses in different e-commerce platforms.
Having a competent accountant for online business is critical for effective bookkeeping and for correct reporting to government institutions. More and more entrepreneurs are looking for information about “how the accounting of an electronic store is carried out” and about the various variants of online accounting services, as well as the current prices for these services. The tax treatment of online stores also requires attention, since with incorrect accounting, the risks of penalties and administrative penalties are significant. Whether it is a small online store or a large e-commerce business, a professional attitude to accounting and tax services is a prerequisite for success.
Consulting company “Elan Consulting” can offer expert assistance and accounting services specialized in the field of e-commerce and online businesses. With Elan Consulting services, you can count on support in all aspects of documenting and reporting online sales, including cash on delivery sales and revenue reporting from various e-commerce platforms. The company also provides assistance in the registration of an online store in the NRA and in compliance with the current regulations and requirements for e-commerce accounting. In this article, we will consider the main steps and requirements when choosing an accountant for an online business and provide guidelines for the successful and lawful management of an online store.
Doing an online business in Bulgaria does not always require a license, but this depends on the type of goods or services offered and the regulatory requirements for the particular activity. The general rule is that online stores and e-commerce platforms are not subject to licensing, but there are certain exceptions where a special license, registration or permit is required. Let's take a look at the different regulatory requirements and circumstances in which an online business license may be required.
According to the Law on Electronic Commerce (ETS) in Bulgaria, persons who carry out online sales do not need a license for the implementation of electronic commerce. However, the law requires compliance with certain rules for transparency and consumer protection, such as providing a clear and accessible description of the goods or services offered, terms of delivery, the right of withdrawal, personal data protection policy, etc. These requirements are of particular importance for the protection of consumer rights and compliance with good trade practices.
According to the GDPR, every online store must comply with the requirements for providing information to customers about the merchant, the products offered and the conditions of sale. This includes the explicit obligation to provide information on the right to return the goods within 14 days, as well as the costs associated with the delivery. While this does not require a licence, failure to comply with these provisions may result in sanctions and administrative measures by the Consumer Protection Commission (CPC).
Every merchant who sells through an e-shop is obliged to register his e-shop with the NRA, according to Ordinance H-18. Registration with the NRA is not a license, but it is a mandatory administrative measure for all persons who use sales management software and conduct e-commerce. This registration aims to ensure that sales are correctly documented and the data is transmitted to the Revenue Administration in a timely manner.
For certain types of activities related to online business, it is necessary to obtain a license or permit, which is regulated in various laws:
This list, of course, is far from exhaustive. Choosing the right accounting firm to steer your regulated business in the right direction is crucial. An accountant with experience in licensing regimes will ensure not only full compliance with legal requirements, but also maintain correct reporting and timely submission of regulatory reports. This professionalism minimizes the risk of fines and penalties and ensures long-term stability and legality of the business.
Any online business must be registered as a legal entity (trader) or as a sole trader (individual entrepreneur), if it is carried out by an individual. Registration can be as a sole trader (ET), limited liability company (LTD) or other legal entity under the Commercial Act. This registration is mandatory, but does not represent a license, but a form of legalization of commercial activity. If there is no such registration, an individual who operates an online store without possessing commercial quality is subject to serious fines.
If an online business plans to trade within the European Union (EU) or outside it, it is necessary to comply with cross-border trade regulations. Within the EU, if an online store delivers to customers in other Member States, VAT registration for distance sales may be required, under the new e-commerce rules and the principle of 'taxation in the country of consumption'.
In summary, to operate an online business in Bulgaria, a license is usually not required, but registration with the NRA for an e-shop and compliance with basic regulatory and tax requirements are mandatory. Licenses and permits are required only for specific activities such as the sale of alcohol, tobacco products, gambling and other strictly regulated areas.
The accounting of online stores in Bulgaria is carried out in accordance with generally accepted accounting standards, which are applicable to all commercial activities, regardless of the mode of sales. The main accounting standard that regulates the accounting of sales revenue in electronic stores is the National Accounting Standard (NSS) 18 “Revenue”, as well as the International Accounting Standard (IAS) 18, which regulates the recognition of income from sales of goods and services. According to these standards, revenue is recognized in the transfer of risk and ownership of the goods to the customer, and for online stores this usually occurs when the goods are sent or delivered to the customer. This means that the online store must recognize income at the moment when it fulfills all its obligations for the delivery of the goods or the provision of the service, regardless of whether it has received the payment beforehand or subsequently.
A specific point with online stores is that they often carry out sales by cash on delivery, where payment is made upon delivery of the goods by courier. According to IAS 18, the proceeds from such sales are accounted for at the time of delivery, when ownership of the goods and the risk are transferred to the customer. In the case of sales with previous payment by bank or credit card, the income is recognized at the time of delivery of the goods or when the document certifying the sale is issued, if the conditions for the transfer of ownership are met.
To account for stocks that online stores usually keep in warehouses or offices for quick delivery to customers, IAS 2 “Inventory Accounting” or the International Financial Reporting Standard (IFRS) 2 applies. These standards require stocks to be measured at acquisition cost or net realizable value, taking into account the lower of the two values. This is important for online stores, which often support a wide variety of products, the prices of which can vary. Also, online stores must account for transportation costs and other related costs that may arise when delivering the goods to the customer.
In addition, online stores often incur costs for sales management software (PTO), licenses and maintenance, which are accounted for in accordance with the standards for fixed intangible assets — IAS 38 or IAS 38 “Intangible Assets”. These expenses can be capitalized and amortized in the event that they meet the requirements for assets within the meaning of accounting standards, that is, if they are expected to bring economic benefits in the future.
For online stores that serve customers both in the country and abroad, it is especially important to correctly account for currency differences. These operations are regulated by IAS 21 “Effects of changes in exchange rates” or IAS 21. If the online store carries out sales in different currencies, changes in exchange rates when making payments can lead to currency differences that must be accounted for.
Online retailers must also strictly monitor tax requirements, as online sales are subject to VAT as defined in the Value Added Tax Act (VAT). Sales to individuals from European Union countries, for example, are subject to a VAT rate that is valid for Bulgaria, while sales to third parties may be subject to other tax requirements, such as the distance sales regime. The changes introduced by Ordinance H-18 also require online retailers to report sales through NRA-approved software and maintain a remote connection with the NRA for automatic data submission. This additional requirement for software aims to ensure transparency and accuracy of reporting, taking into account the specific features of e-commerce.
Unlike physical stores, where sales are registered using cash registers and paper fiscal vouchers are issued, online stores have the option of issuing the so-called “online fiscal voucher”. According to Art. 3, para. 17 of Ordinance H-18, “a person who carries out sales of goods and/or services through an electronic store may register and account for these sales instead of with a fiscal or system voucher through a document for registration of the sale, which is not issued by a fiscal device, when the payment was made in absentia by credit or debit card and provided that that the software complies with the requirements of the regulation.”
This means that an online retailer can avoid physically issuing a fiscal voucher if they use sales management software (PTO) that is approved by the National Revenue Agency (NRA) and that automatically submits sales data to the NRA. The conditions for registration and reporting of these sales, as well as the submission of information remotely, are strictly regulated to ensure accuracy and transparency in online trading.
According to Art. 118, para. 3 of the Value Added Tax Act (VAT) and Ordinance H-18, every online retailer must document and report every sale, regardless of the method of payment. In cases where methods such as postal money transfer or non-attendance payments by bank cards are used, Ordinance H-18 allows partial relief — i.e. not to issue a traditional fiscal voucher, as long as the customer receives a document containing the minimum requisites, such as merchant identification details, description of the goods and the amount of payment. This document can be provided to the client in paper form or in electronic form.
A particularly important feature for online businesses is the obligation to use registered and approved sales management software, according to Art. 1, para. 1, item 7 and item 8 of Ordinance H-18, if sales are automated through an e-shop. The software used must be included in the public register of the NRA and meet certain functional and technical requirements, such as the possibility of automatic and continuous transmission of data to the NRA in real time. The software must also ensure that sales data is stored securely and cannot be altered or manipulated.
The online fiscal voucher or the document that replaces the fiscal voucher in online payments must contain key information such as the name and identification number of the merchant, the name of the good or service, the total amount and the method of payment (Art. 3, para. 1, item 4 of Ordinance N-18). This applies in particular to sales where payment is made by postal money order or by bank transfer, in which cases a fiscal voucher is not mandatory if the minimum information requirements for the customer are met.
These measures significantly differentiate online businesses from traditional physical businesses, which typically require the availability of fiscal devices and the immediate printing of fiscal vouchers at every sale.
According to Art. 3, para. 1 and Art. 7 of Ordinance H-18, failure to comply with the requirements for accounting and documentation of sales, including the lack of approved software, may result in serious penalties from the NRA, with fines varying depending on the nature of the violation. For example, merchants who have not registered their e-shops or do not use approved software can be penalized with fines and, in more serious cases, a temporary or permanent cessation of activity.
Choosing an accountant for an online store or any other type of online business is an essential decision that can directly affect the efficiency and legality of the overall activity. For many entrepreneurs, the question boils down to a dilemma - whether to choose the cheapest accountant or to bet on an option with an optimal ratio of price and quality.
Although low prices can be attractive, especially at the beginning of the activity, choosing the cheapest accountant is not always the most correct decision. The cheapest services often do not provide the necessary quality, attention to detail or in-depth knowledge in the specific needs of online businesses. A competent accountant should have experience with the specific requirements for documenting and reporting sales, including registering the e-shop with the NRA, as well as the specifics of using sales management software and remote data submission to the revenue agency. If these requirements are not met correctly, the risks of errors that can lead to fines, penalties or administrative problems increase significantly, and the fines themselves often grow in geometric progression.
Choosing an accountant for an online business is most correctly carried out when the principle of balance in the price offered and quality of service is applied, which is usually expressed in a higher level of professionalism and personalized service. Such an accountant will be more familiar with the specific regulatory and tax requirements for online businesses and will be able to assist with the preparation of the necessary documentation, including with the registration and use of approved sales management software, which is mandatory for many e-shops. An experienced specialist will also be able to offer useful advice on optimizing taxation and costs, as well as improving accounting processes and reporting in accordance with best practices.
In addition, choosing a competent accountant with an optimal price-quality ratio can also be a strategic investment. A qualified accountant will monitor changes in legislation and notify the business owner of the need for changes or updates in accounting. This can save money and effort in the long run, especially when it comes to complex tax cases or specific cases, such as cash on delivery sales and other online payments that have special reporting requirements.
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Choosing an accounting firm for an online business is an important element in achieving financial transparency, legality and efficiency in the management of commercial activity. The location of the accounting office today plays an increasingly minor role in the successful service of online businesses, as digital technologies allow secure and convenient remote work. This is where Elan Consulting stands out as the leading choice for online entrepreneurs, regardless of where they are located in Bulgaria.
Elan Consulting offers high quality accounting services based on a thorough understanding of the specific needs of online stores and businesses in a digital environment. The team of the company is familiar in detail with the requirements of Ordinance H-18 and the peculiarities of accounting in online commerce, including the rules for sales management software, the registration of the e-store in the NRA and the reporting of various types of payments such as cash on delivery and non-attendance card payments. The competent service of “Elan Consulting” helps clients to comply with all regulatory requirements and maintain full legal order of their activities.
Even when the clients are not based in Sofia, Burgas or another of the main offices of “Elan Consulting”, the company provides high-quality remote service. Through digital channels for communication and exchange of documents, Elan Consulting accountants offer secure and fast access to documentation, reports and consultations in real time. This flexibility allows clients to focus on developing their business while a professional team is responsible for financial reporting and tax obligations.
In addition, “Elan Consulting” provides its clients with unique and innovative price calculator for accounting services, which allows online merchants to easily calculate the approximate cost of accounting services according to the needs of their business. The calculator is a valuable tool that provides transparency and facilitates the informed choice of the optimal package of services. Customers can count on a combination of professionalism, reasonable prices and personalized support tailored to the specifics of online commerce.
Working with an online accountant from Elan Consulting is easy, convenient and fully adapted to the needs of modern online businesses. The team of “Elan Consulting” uses proven and secure remote service technologies, which allows efficient work regardless of the location of the client. The entire process is designed to make it as easy as possible for clients in filing documents, correspondence, and tracking accounting and tax issues.
The submission of documents to “Elan Consulting” takes place through secure electronic channels. Customers can send their invoices, reporting documents, bank statements and other financial data electronically, through secure file platforms that guarantee the integrity of the information. Depending on the client's needs, Elan Consulting offers different options for document exchange — from cloud platforms to email communication with encryption, which gives customers the peace of mind that their data is protected.
Correspondence and communication with an online accountant from “Elan Consulting” is carried out through various channels — telephone, email and video calls. For questions that require more detailed discussion or personal consultation, clients can schedule a video meeting where they will receive personalized advice and guidance related to the specifics of their business. In case of any questions or the need for clarification, the accountants of Elan Consulting are available and respond in a timely manner to provide their clients with full support in the management of financial reporting.
Elan Consulting also maintains electronic archives that allow clients to access reports and tax documents at any time. Thus, online business owners can easily view past reports, tax returns and other documents that are needed for current business planning and decision making.
