Accounting software or managed bookkeeping in Malta: who should keep your books?

01What is the difference between accounting software and managed bookkeeping?

Accounting software is a tool. It stores invoices, bills and bank lines, suggests matches and produces reports. Managed bookkeeping is a service: a firm does the recording, reconciling and reviewing for you. Software records the transactions; it does not own the books. Someone still has to post each item, explain each difference and decide how unusual items are treated.

So the real choice is who does that work each month. There are three common routes. You keep the ledger yourself in software. Your team keeps the day-to-day records and an accountant closes each period. Or a firm keeps the ledger and you supply documents and answers. In every route, someone still has to prepare the year-end accounts, the tax return and any VAT returns, and the law still puts the duty to keep proper records on the business.

02What does Malta law require, whoever keeps the books?

Malta law puts the record-keeping duty on the business itself. Under article 163 of the Companies Act, a company must keep proper accounting records of the money it receives and spends, its assets and liabilities and, if it deals in goods, its stock. The records must show and explain its transactions, disclose its financial position with reasonable accuracy at any time and enable the directors to ensure that the accounts comply with the Act.

If a company fails to keep proper records, every officer in default commits an offence and can be fined up to €11,646, unless they show they acted diligently and the default was excusable. The VAT Act deals directly with relying on someone else. If the Commissioner asks in writing for VAT records and they are not produced within 30 days without a reasonable excuse, they may not be produced later, after a provisional assessment or before the Tribunal or a court. Relying on another person to do a task, or that person's delay or error, is not a reasonable excuse. Whatever route you choose, keep your own access to the ledger and to the documents behind it.

The records can be kept at the registered office or another place the directors choose, open to the company's officers at all times. If they are kept outside Malta, accounts and returns showing the financial position at intervals of no more than six months must be sent to and kept in Malta. Article 19 of the Income Tax Management Act applies to anyone carrying on a trade, business, profession or vocation, including the self-employed and companies, and article 48 of the VAT Act applies to taxable persons established in Malta. The retention periods differ, so keep each record for the longest period that applies to it.

03When can you do your own bookkeeping in accounting software?

Self-managed software can work when activity is simple and someone reliably owns the routine. That person needs time every month, enough knowledge to reconcile and code VAT correctly, and the judgement to ask an accountant when something is unusual. Enjoying spreadsheets is not the test. A dependable monthly routine is.

Take a freelance consultant with one bank account and around a dozen sales invoices a month. They can raise invoices, record expenses and match the bank feed themselves, then engage an accountant for the tax return and any questions. The arrangement breaks down when bank lines are matched without the documents behind them, or when year-end is the first time anyone looks at the ledger.

• A named person posts and reconciles every month, not every quarter.
• Unexplained items are followed up, not parked in a suspense account.
• VAT coding questions and unusual items go to an accountant before the return, not after.
• You know who prepares the year-end accounts and tax return, and by when.

04When is managed bookkeeping the better fit?

Managed bookkeeping makes sense when the books keep slipping, when nobody owns the monthly close, or when several bank accounts, payment processors or entities make reconciliation hard. It also suits owners who would rather spend their time on the business. You still have to send complete documents on time and answer the firm's questions. A firm can only post what it receives.

In A4's bookkeeping service, the invoices and receipts you upload to the portal are read and posted with the source document attached. Every bank, EMI and card account is reconciled to the ledger each month. A qualified accountant reviews the postings and passes the necessary journals, working in Xero, QuickBooks or Sage. A4 keeps the books; it does not sell a software-only plan.

If your books are behind, ask how the catch-up will be handled before monthly work starts. A4 charges each backdated month at the same rate as a current month, and scopes onboarding and opening balances with you before it starts rather than pricing them in advance.

05How do you split the work in a hybrid arrangement?

A hybrid split keeps the day-to-day records with your team and gives the period-end work to an accountant. An administrator raises invoices and posts bills, the owner approves payments, and an accountant reconciles, reviews and closes each month or quarter. It keeps a qualified check on the ledger without handing it over, but only if every task has one owner.

Write the split down as a table of task, owner, frequency and evidence that the task is done. The weak points are the gaps: a document uploaded but never posted, a return drafted but never submitted, a difference each side assumed the other would explain. The same table helps in a managed engagement, because some tasks always stay with you: raising sales invoices, approving payments and answering questions.

06How do the costs of each route compare?

Compare the whole cost of each route, not the headline fee. The software route costs a subscription and your team's time, plus the accountant's year-end and tax work and the cost of fixing errors later. A managed route costs a monthly fee plus the time you spend sending documents and answering questions. A hybrid sits in between: software, your team's time and a review fee.

Put a value on internal time. If an owner spends six hours a month on the books, multiply those hours by what an hour of their time is worth to the business, then add any year-end clean-up. Compare that total with written quotes for the scope you actually need.

For reference, A4's managed bookkeeping starts from €24 a month excl. VAT if you are self-employed and from €49 a month excl. VAT for a company, including one bank account, with the fee set by monthly expenses. Higher transaction volumes and extra bank accounts add to that fee, and VAT returns and payroll are priced as separate lines. All fees exclude VAT. A4's bookkeeping cost guide sets out the full range.

• Software subscription and any add-ons.
• Internal hours each month, at a realistic value.
• Catch-up or clean-up work for past months.
• Year-end accounts, the tax return and VAT returns.
• An audit or review, if your financial statements need one.

07What should you check before you switch?

Ask for the scope in writing. Check which bank, card and payment accounts are covered, whether catch-up months are included, who prepares VAT returns, management reports and year-end accounts, and how fees change as activity grows.

Check access and portability. Whatever route you choose, the business should be able to get a full ledger export and the supporting documents. Agree whose name the software licence is in and what happens to access at the end of the arrangement.

If your financial statements need an audit, ask how the firm keeps audit and accounting work independent. A4 keeps the two independent and will explain how for your case.

• Accounts and payment channels covered.
• Catch-up months and opening balances.
• VAT, payroll, management accounts and year-end: included or separate.
• Software licence: whose name, who pays.
• Ledger export and document access when the arrangement ends.
• How audit and accounting work are kept independent, if you need an audit.