Accounting in Georgia: Bookkeeping Rules and the Monthly Cycle

Every registered business in Georgia files with the Revenue Service every month, whether it is a solo Individual Entrepreneur invoicing one client or an LLC with staff and a VAT registration. What differs sharply, and what most guides skip past, is how much bookkeeping actually sits behind that filing. A Small Business Status IE can run for years on almost no formal recordkeeping. An LLC cannot, from day one. Here is what the law requires, what a normal month looks like, and where we watch people get it wrong.

The gap matters because pricing, risk and the amount of your own time this takes are all downstream of it. Two businesses filing the same monthly declaration can be doing an entirely different amount of underlying work, and knowing which one you actually are is the first thing worth establishing.

What "doing your accounting" actually covers

It helps to separate three things that get talked about as one.

Bookkeeping is the ongoing record of transactions - what you keep and how you keep it, month to month, before anything is filed. Filing is the monthly declaration itself, submitted through the Revenue Service's rs.ge portal by the 15th. Annual reporting is a separate, once-a-year obligation to a different body entirely for businesses above a certain size.

Almost every question we get is really about the first of these, because it is the one where the requirement genuinely changes depending on your structure rather than staying constant. A solo Small Business Status IE might only ever deal with the first two layers. An LLC with employees and a VAT registration deals with all three simultaneously, every single month, plus a fourth every autumn.

Bookkeeping requirements, before any filing happens

The baseline obligation, for everyone, is the tax source document. Article 72 of the Tax Code of Georgia defines it as a written record identifying the parties to a transaction, dated, listing what was supplied and its value - in practice, your invoices and receipts. It must exist in at least two identical copies, one for each party, and it has to be kept for at least three years after the end of the calendar year it relates to.

Past that floor, the requirement scales sharply with structure.

• Small Business Status Individual Entrepreneurs are not required to keep formal accounts of income and expenses at all. Keeping the tax source documents themselves is enough, for as long as the status holds and no VAT obligation has arisen.
• The moment a VAT registration obligation arises - voluntary or mandatory - a Small Business Status IE has to start keeping proper accounts of income and expenses, on top of the tax source documents. The status does not exempt anyone from this once it applies.
• Ordinary Individual Entrepreneurs, without the status, keep full accounts from the start, because expense deductions depend on documented costs.
• LLCs keep full accounts from incorporation regardless of turnover, and above certain size thresholds also file annual financial statements with the Service for Accounting, Reporting and Auditing Supervision, known as SARAS.

SARAS sorts reporting entities into four categories plus a public-interest category, based on assets, revenue and headcount, and the accounting standard that applies moves with the category: full IFRS for the largest, IFRS for SMEs for the two middle bands, and a simplified domestic standard for the smallest, with the option to apply a fuller standard voluntarily. Whichever category applies, the deadline is the same: statements are due by 1 October of the year following the reporting period. We cover the category thresholds and which standard fits which business in SARAS financial reporting.

None of this is optional based on how busy the business is. A quiet LLC with a single shareholder and almost no transactions still sits in a SARAS category and still keeps full accounts, because the requirement is set by the legal form and the size thresholds, not by how much activity actually happened in a given year.

Cash basis vs accrual basis for Individual Entrepreneurs

Cash basis accounting records a transaction when money actually moves - you book the sale when the payment lands, not when you issued the invoice. Accrual basis records it when the transaction happens - the sale is booked when you deliver the work or issue the invoice, whether or not you have been paid yet. Most small businesses instinctively think in cash terms, which is exactly why this trips people up in Georgia.

A Small Business Status IE below the VAT threshold is close to cash basis in practice: with no formal ledger required, what you track is simply what came in and what documents support it. That changes the moment VAT registration applies. The Tax Code's VAT timing rule sets the taxable moment as the earlier of the goods or services actually being delivered, an invoice being issued for them, or an advance payment being received - not the date the client happens to settle the invoice. That is accrual logic, and it applies whether the taxpayer is an IE or an LLC. An ordinary IE without Small Business Status is in the same position from day one, because expense deductions have to be matched to the income they relate to.

Put a number on it: invoice a client on 28 June for work delivered that day, and they pay on 9 July. Under cash logic, that is July income. Under accrual, and under the Tax Code's VAT timing rule if you are registered, it belongs to June - the month the work was delivered and the invoice issued, regardless of when the money actually arrived. Get the period wrong across a few invoices a year and a monthly declaration and a VAT return can both land on the wrong side of a filing deadline without anyone noticing until a reconciliation catches it.

What a monthly accounting cycle actually looks like

Strip away the specifics of any one business and the cycle is the same shape every month.

1. Gather the month's documents. Invoices issued, invoices received, bank statements, any contracts signed that month, and receipts for cash expenses.
2. Record every transaction. Each one gets entered against the right category, matched to its supporting tax source document, and dated correctly for the period it belongs to.
3. Check for reverse VAT. Anything bought from outside Georgia - hosting, software subscriptions, a foreign contractor - needs the 18% reverse charge calculated, whether or not you are VAT registered yourself.
4. Convert foreign currency correctly. Income and expenses in dollars or euros have to be translated to GEL at the correct rate for the reporting period, which is a routine source of small errors.
5. Prepare the declaration. Everything above feeds into the monthly filing, whether that is a simple turnover declaration under Small Business Status or a fuller return with VAT and payroll lines for an LLC.
6. File through rs.ge by the 15th. The deadline is the same regardless of structure, and it applies in months with zero income as much as busy ones.
7. Pay the tax bill. From a Georgian bank account, once the amount due is confirmed.
8. Keep everything. Three years minimum for tax source documents, longer if a SARAS reporting obligation applies.

For a straightforward Small Business Status IE this is a twenty-minute task most months. For a VAT-registered LLC with employees it is a genuine bookkeeping job, which is the entire reason the accounting profession here prices by transaction volume rather than by entity type.

Common accounting mistakes we see

Most of what goes wrong is not complicated once someone points it out, which is exactly why it is worth listing plainly.

• Skipping the zero declaration. No income in a month does not mean no filing obligation. Penalties for a missed declaration are automatic and do not care why it happened.
• Missing reverse VAT. Foreign software subscriptions and overseas contractors are the two most common blind spots, because nothing about the purchase feels like a Georgian tax event.
• Converting currency at the wrong date or rate. A small, repeated error that compounds across a year of foreign-invoiced income.
• Treating the VAT threshold as someone else's problem. Businesses approaching 100,000 GEL of turnover often keep running cash-basis habits well past the point where accrual recordkeeping is already legally required.
• Discarding documents too early. Three years is the floor, not a guideline, and the habit of clearing out old invoices after a year catches people at exactly the wrong moment - during an audit.
• Mixing personal and business bank activity. Technically permitted for an IE, practically a source of confusion when it comes time to reconcile a year of transactions.
• Filing through rs.ge without support. The portal is in Georgian throughout, and a mistranslated field or a misunderstood prompt produces a wrong filing that looks correct until the Revenue Service flags it.
• Assuming the monthly cycle is the whole obligation. LLCs above the SARAS thresholds have a separate annual filing on 1 October that a purely monthly routine will not catch.
• Backdating or reusing tax source documents. Article 72 requires a dated document made in at least two identical copies at the time of the transaction, not a reconstruction assembled later from memory or a bank statement alone.
• Ignoring the exchange rate on the day it actually matters. Foreign-currency invoices get converted at the rate for the reporting period, not whatever rate happened to be convenient when the bookkeeping was finally done weeks later.

Annual obligations that sit on top of the monthly cycle

The monthly cycle repeats fifty-two weeks a year, but it is not the only clock running. Individual Entrepreneurs and LLCs both have annual filing obligations that close out the tax year, separate from the SARAS financial reporting deadline described above for larger entities. LLCs also carry the corporate tax mechanics on top - since profit is taxed only on distribution under Georgia's Estonian-style model, the annual bookkeeping position depends on what was actually paid out during the year rather than what was earned, which we cover in corporate income tax in Georgia. Every date across the calendar, monthly and annual, is collected in one place in Georgia's tax deadlines.

Doing it yourself vs handing it to an accountant

A disciplined Small Business Status IE with a handful of invoices a month can genuinely run the monthly cycle without outside help - the portal is the main obstacle, not the accounting itself. That changes fast once VAT registration, employees, or a SARAS reporting category enters the picture, at which point the recordkeeping burden and the cost of getting it wrong both rise together. What actually drives the price of outside help, and when it is worth paying for it as a sole IE, is covered properly in accounting cost in Georgia, and the specific rules around invoicing foreign clients and what to keep for how long are in invoicing rules in Georgia.

The honest way to decide is to price your own time against the fee. Twenty minutes a month of uploading documents is a different proposition from a Saturday afternoon lost to a Georgian-language portal error, and the second scenario is where most self-managed accounts actually end up once turnover picks up. Structure matters here too - if you are still deciding between an Individual Entrepreneur and an LLC in the first place, our Small Business Status and LLC registration services both start with a conversation about which one actually fits before either gets registered.

Most of our clients hand the whole cycle to us the moment it stops being twenty minutes a month, and we take on the liability for a filing error as part of the package rather than leaving it with the client who trusted us to catch it.

Monthly Accounting

We record the transactions, calculate reverse VAT, file to the Revenue Service before the 15th, and tell you what to pay and when. Priced by transaction volume, not by entity type.

See what it costs

Key takeaways

• Every registered business files monthly through rs.ge by the 15th, including zero-income months, regardless of structure.
• Small Business Status IEs need only keep tax source documents until a VAT obligation arises, at which point full accrual-style bookkeeping becomes mandatory overnight.
• Tax source documents must be kept for at least three years; SARAS financial statements, where they apply, are due by 1 October of the following year.
• The most expensive mistake is assuming the 1% rate means no bookkeeping at all - the rate and the recordkeeping requirement are separate questions.
• Reverse VAT on foreign purchases and currency conversion errors are the two most common recurring mistakes we see.

Frequently asked questions

Do I need an accountant if I have Small Business Status?

You need the monthly filing regardless of who does it, but many solo IEs manage the recordkeeping themselves while turnover is low and simple. The calculus changes once a VAT obligation, employees or a more complex client mix enters the picture.

What is the difference between cash and accrual accounting in Georgia?

Cash basis records a transaction when money moves; accrual records it when the transaction happens, regardless of payment timing. Small Business Status IEs below the VAT threshold operate close to cash basis in practice, while VAT-registered businesses and LLCs are legally required to use accrual timing for VAT purposes.

Do I have to file a declaration in months with no income?

Yes. A zero-income month still requires a declaration by the 15th, and the penalty for missing it applies whether or not there was anything to report.

What is reverse VAT and why does it matter for bookkeeping?

If you buy a service from outside Georgia - hosting, software, a foreign contractor - you owe 18% Georgian VAT on that purchase, even if you are not VAT registered yourself. It has to be calculated and declared as part of the monthly cycle, and it is one of the most commonly missed obligations.

How long do I need to keep invoices and receipts?

At least three years after the end of the calendar year the document relates to, under the Tax Code's tax source document rules. Businesses with a SARAS reporting obligation should plan to hold records longer, since an audit can reach back further than the tax minimum.

What accounting standard does my business have to follow?

It depends on your SARAS category, based on assets, revenue and employee count. The largest businesses use full IFRS, the two middle categories use IFRS for SMEs, and the smallest use a simplified domestic standard, with the option to apply a fuller standard voluntarily.

When is the annual financial reporting deadline?

For businesses with a SARAS reporting obligation, statements are due by 1 October of the year following the reporting period. This sits separately from the monthly Revenue Service filings that every business handles year-round.

What happens if I file late or get something wrong?

Late filing triggers automatic penalties from the Revenue Service. On our accounting packages, liability for a filing error we make sits with us rather than the client, though that does not cover errors caused by documents we were never given.

Can an accountant take over from my current provider?

Yes, and it is routine. Taking over means reviewing what has already been filed, correcting anything that needs it, and picking up the rs.ge access going forward.

Do Individual Entrepreneurs need to keep a general ledger?

Only once they lose the simplified treatment - an ordinary IE without Small Business Status, or a Small Business Status IE once VAT registration applies. Below that, tax source documents are sufficient on their own.

How much does accounting cost in Georgia?

Pricing generally scales with transaction volume rather than entity type, starting from a low monthly figure for a simple Individual Entrepreneur and rising for VAT-registered companies with employees. The full price bands and what drives them are set out in our accounting cost guide.