German Corporate Finance: Must Companies Prepare a BWA Every Month?

Many business owners who are new to running a company in Germany or are preparing to start a business there often ask:

Do German companies have to prepare a BWA every month?

Let's cut to the conclusion first:

It is not legally mandatory, but in actual business practice, from the perspective of a company director, the vast majority of companies prepare a BWA every month to better understand their operating performance.

So why is the BWA so important?

1. What is a BWA?

BWA stands for Betriebswirtschaftliche Auswertung, which literally translates to "Business Evaluation Report."

You can think of it as:

An internal management report showing whether the company "made a profit that month, where the money went, and what the cost structure looks like."

2. Is it legally required every month?

• German law only strictly requires annual financial statements (Jahresabschluss).
• The BWA itself is not a legal obligation.
• Note: Not legally mandatory $\neq$ you shouldn't do it in practice.

3. Why do most companies prepare a BWA every month?

• Management needs: A business owner cannot look at financial performance only once a year.
• Early problem detection: It helps spot rising costs, declining profits, or cash flow tightness in time.
• Bank and financing requirements: When applying for loans, credit lines, or financing, banks almost always request the latest BWA.
• Tax advisor routine: Many tax advisors (Steuerberater) handle bookkeeping on a monthly basis and generate the BWA automatically.

4. What does a BWA typically include?

It generally includes:

• Operating revenue (Umsatz)
• Various costs and expenses (Kosten / Aufwendungen)
• Current profit or loss (Gewinn / Verlust)
• Some companies even break this down by department, project, or product line.

5. Who prepares the BWA?

• It is usually generated automatically by tax advisors or accounting staff using accounting software (such as DATEV).
• It is a tool used by management for decision-making, not a document submitted to the government.

Summary in one sentence:

The BWA is not a legal requirement, but in Germany, it is the de facto monthly standard. Not doing it is actually what's abnormal.

If you are starting a business in Germany or managing administrative/financial operations for a company, this is definitely something you should know in advance.