SME Accounting Obligations in France 2026: Complete Business Accounting Guide

The accounting obligations for SMEs in France are defined by the French Commercial Code (Art. L.123-12 et seq.) and the General Accounting Plan (PCG). In 2026, they vary according to business size (micro-enterprise, SME, ETI) and include keeping regular accounts, preparing annual accounts and, since the e-invoicing reform, new data transmission obligations.

This exhaustive guide covers all obligations for each business size, document retention periods, e-invoicing and penalties for non-compliance.

Keeping regular and truthful accounts

Every business subject to the actual tax regime (corporate tax or income tax in the BIC or BNC category by option) must keep regular accounts according to Article L.123-12 of the Commercial Code. This obligation is based on several principles:

1. Chronological recording: each operation must be recorded in chronological order, with the date, amount and counterpart mentioned
2. Truthfulness: entries must faithfully reflect the economic reality of operations
3. Permanence: accounting methods must be applied consistently from one financial year to the next
4. Documentation: each entry must be justified by an original document (invoice, contract, bank statement)

Accrual accounting vs. cash accounting

The distinction between these two methods is fundamental :

Accrual accounting (mandatory for corporate tax subjects) :

• Revenue and expenses are recorded when acquired or incurred, regardless of the payment timing
• Unbilled invoices and invoices to be issued must be recorded at year-end
• Most comprehensive method, giving a true picture of results

Cash accounting (possible for certain activities) :

• Revenue and expenses are recorded upon receipt or payment
• Simpler, suitable for micro-enterprises and liberal professionals under income tax
• Does not give a true picture of results in case of significant timing differences

Practical consequences: a business under corporate tax cannot use cash accounting. An SCI under corporate tax must keep accrual accounts.

The journal (livre journal)

The journal records, in chronological order, all operations carried out by the business. It must be kept daily and contain no blanks or crossings out.

Formal requirements:

• Pagination and greffe (commercial court registry) stamp
• Conservation for 10 years
• Paper or digital format accepted, provided it is unalterable

Minimum content per entry:

• Date of operation
• Supporting document number
• Debit and credit amount
• Description of operation
• Assigned account number

The general ledger (grand livre)

The general ledger is the transcription of all journal entries into individual accounts. It allows verification of each account's balance.

Elements to find:

• List of all accounts with their debit and credit movements
• Balance of each account at each date
• Traceability of each operation from the supporting document

The inventory book (livre d'inventaire)

The inventory book lists the assets and liabilities at the balance sheet date. It must be prepared annually and contain:

• Inventory items (inventory, receivables, payables)
• Depreciations applied
• Provisions made
• The year's result

The inventory book must be signed by the director and kept for 10 years.

Annual accounts

Annual accounts comprised three mandatory documents:

The balance sheet:

• Assets: fixed assets, current assets, prepaid expenses
• Liabilities: equity, provisions, debts
• Shows the financial position at the balance sheet date

The income statement:

• Expenses: operating expenses, financial expenses, exceptional expenses
• Revenue: operating revenue, financial revenue, exceptional revenue
• Shows the formation of results (profit or loss)

The legal notes (annex):

• Supplementary information to the balance sheet and income statement
• Information on accounting methods used
• Information on commitments and off-balance sheet items

Thresholds for simplified presentation (qualifying as "micro" or small entities):

• Total balance sheet < €4M
• Turnover < €8M
• Workforce < 50 employees

Small businesses may present simplified annual accounts.

Micro-enterprise (no accounting required)

Self-employed individuals under VAT exemption (micro scheme) have no accounting obligations, except:

• Keeping a revenue book (for BIC)
• Keeping a purchase register (for BNC if threshold > €82,800)
• Keeping supporting documents

Exception: micro-entrepreneurs who exceed the VAT exemption thresholds move to the simplified or normal actual regime with full accounting obligations.

Small employer (no standard-format annual accounts)

Businesses qualifying as small businesses according to the following thresholds:

• Total balance sheet < €4M
• Turnover excl. VAT < €8M
• Workforce < 50 employees

Obligations:

• Full accounting required
• Simplified annual accounts permitted
• Filing accounts with the registry (mandatory)
• Partial publication in Bodacc (thresholds to check)

SME (normal accounting)

Businesses qualifying as SME according to:

• Total balance sheet < €50M
• Turnover < €50M
• Workforce < 250 employees

Obligations:

• Full accounting
• Standard-format annual accounts
• Management report (mandatory except for exemption)
• Filing accounts with the registry
• Publication in Bodacc

ETI and large businesses

Intermediate-size enterprises (ETI) and large businesses have enhanced obligations:

• Consolidated accounts mandatory
• Corporate governance report
• Extra-financial performance declaration (DPEF) beyond certain thresholds
• Legal audit by a Statutory Auditor (CAC)

Legal periods by document type

Electronic archiving: what rules?

Electronic archiving is permitted under conditions:

Requirements:

• Unalterable and indelible format (PDF/A, structured XML)
• Certified timestamping
• Guaranteed integrity (digital fingerprint)
• Accessibility throughout the retention period

FEC (Accounting Entries File): must be kept in CSV or XML format for 10 years and be transmittable to the tax authority upon request.

The ongoing reform

France is implementing mandatory e-invoicing for all VAT-registered businesses. The implementation schedule is as follows:

Accepted invoice formats

The invoicing circuit

1. Issuance: the issuing business generates an invoice in structured format
2. Transmission: the invoice goes through a PDP (Partner Dematerialisation Platform) or the public portal (Chorus Pro for public sector)
3. Reception: the recipient receives the invoice via their PDP
4. Conservation: both parties keep the invoice for 10 years

Dematerialisation Platforms (PDP)

PDPs are private operators approved by the administration that transmit invoices between businesses. In 2026, several dozen PDPs are approved. The choice of PDP is free for businesses.

Definition and obligation

FEC is a standardised computer file containing all accounting entries for a financial year. It is mandatory for:

• All businesses subject to corporate tax
• Businesses subject to income tax in the BIC category by option

Format: CSV or XML file, in accordance with the administration specifications.

FEC contents

FEC must contain for each entry:

• Journal code (description)
• Entry date
• Supporting document number
• Supporting document date
• Account number (7 digits)
• Entry description
• Debit amount
• Credit amount
• Document identifier (to link lines)

Retention and transmission

Retention: 10 years, in unalterable format

Transmission to administration: FEC must be transmitted to the tax authority upon request as part of an audit. In case of audit, the production deadline is generally 30 days.

Penalties: in case of absence or irregularity of FEC, a penalty of €5,000 may be applied, without prejudice to the adjustments related to the substance.

Failure to keep accounts

Failure to keep regular accounts constitutes a tax offence penalised by:

Failure to file accounts

Non-filing of annual accounts with the commercial court registry exposes to:

• A civil fine of €1,500 to €3,000
• Mandatory insertion in Bodacc
• Refusal of access to public procurement

E-invoicing violations

From September 2026, failure to receive electronic invoices will be penalised by:

• A penalty of €500 per invoice not received in the correct format
• A risk of rejection of expense deductibility for the recipient