Sole trader books in Republika Srpska: simple or double entry, and how long to keep them

A sole trader (preduzetnik, a natural person registered for independent business) in Republika Srpska keeps business books in one of two ways: simple bookkeeping on a cash basis, or double-entry bookkeeping. Since 1 January 2026 double entry has been governed by the new Law on Accounting and Audit. This text covers sole traders only. A registered farm household and a company have different duties (see the article on choosing between farm household, sole trader and company).

In short

• Simple bookkeeping means an income book, an expense book, a fixed-assets book and a book of receivables and payables. A small entrepreneur (mali preduzetnik, who pays the flat tax) keeps only a turnover book.
• Double-entry bookkeeping (journal, general ledger, subsidiary ledgers) is the trader's own choice. It becomes compulsory when collected income in the last tax period exceeded the amount set by a rulebook. For now that amount is 500,000 KM.
• You do not need an accountant for simple bookkeeping. With double entry, the financial statements must be prepared by a licensed person.
• Accounting documents are kept for at least five years. The journal, general ledger and subsidiary ledgers are kept for at least ten years.

Who it applies to

All sole traders, including those who rent out rooms or sell products as a registered trade.

A small farmer (a farm holder entered only in the Register of Agricultural Holdings, with annual income up to 50,000 KM) is not a sole trader. Their income is not assessed from business books, and they pay tax as a flat amount (Article 27, paragraph 1 and Article 27a of the Law on Income Tax).

What to do

1. Decide which system you will use. You move to double entry by your own decision. Without that decision, you keep simple books.
2. Simple books: keep an income book, an expense book, a fixed-assets book (with an inventory list) and a book of receivables and payables. At the start of each book write your name, JIB, JMB, address, trade name and type of activity. Books are kept separately for each tax year. If you have more than one registered activity, keep separate books for each.
3. Record income when you actually receive it and an expense when you pay it. The book must show daily turnover.
4. A small entrepreneur keeps only the turnover book. For the conditions of that status and the amount of tax, see the article on income tax.
5. Double entry: the books are opened on the day the activity is founded or on 1 January, and closed at the end of the tax period. You set the number and content of subsidiary ledgers in an internal act. Tell APIF and the Tax Administration about your choice. Each year you prepare a balance sheet and an income statement. Sole traders classified as micro and small entities submit only these two statements; larger ones submit additional reports. APIF does the classification.
6. Keep every document your entries are based on (invoices, bank statements, contracts, payroll lists). Enter data only on the basis of an authentic document.

Deadlines and amounts

• Threshold for compulsory double entry: the amount is now set by a rulebook of the Minister of Finance, not by the law itself. Until a new rulebook is adopted, the earlier Pravilnik o sistemu dvojnog knjigovodstva kod preduzetnika applies, with a threshold of 500,000 KM of collected income. Check the amount with the Tax Administration before you decide.
• The duty to keep double-entry books starts with the first accounting period after the tax period in which the threshold was exceeded.
• Notice of choosing double entry: to APIF by the deadline for the annual financial statement, and to the Tax Administration by the deadline for the annual tax return. If you are just starting your activity, notify both within 30 days of starting. If you already gave this notice before 1 January 2026, you do not have to repeat it.
• If you chose double entry yourself, you can give it up only after five tax periods.
• Annual financial statements under double entry go to the register by the last day of February for the previous year.
• Retention: simple books and records are kept for at least five years from the due date of the tax obligation or return they relate to. With double entry, documents are kept for at least five years, and the journal, general ledger and subsidiary ledgers for at least ten. The period for books runs from the end of the business year they relate to. Payroll lists and financial statements are kept permanently. Other regulations may set a longer period for particular documents.

Who may keep the books

You do not need to hire an accountant for simple bookkeeping. You can keep double-entry books yourself or entrust them by contract to a sole trader or company registered for accounting services. In every case the financial statements are prepared by a person licensed as a certified accounting technician or certified accountant. Even when someone else keeps the books, the documents are stored at your business premises or with the person who keeps them.

Where to go

• Poreska uprava Republike Srpske (Tax Administration of Republika Srpska), contact
• Agencija za posredničke, informatičke i finansijske usluge, APIF (Agency for Intermediary, IT and Financial Services)

Laws and sources

• Zakon o računovodstvu i reviziji Republike Srpske (Službeni glasnik RS 115/25), Articles 6, 15, 16, 17, 18, 40, 41, 42
• Pravilnik o sistemu dvojnog knjigovodstva kod preduzetnika (Službeni glasnik RS 45/16 and 124/22), threshold of 500,000 KM
• Pravilnik o sadržaju i načinu vođenja knjiga i evidencija (Službeni glasnik RS 98/15), Article 11
• Zakon o porezu na dohodak (Službeni glasnik RS 60/15, with later amendments), Article 27
• Zakon o dopunama Zakona o porezu na dohodak (Law Supplementing the Law on Income Tax, Službeni glasnik RS 112/23, in force since 1 January 2024), Articles 27 and 27a
• Zakon o poreskom postupku Republike Srpske (Službeni glasnik RS 78/20), Article 19, point 6