Feeling overwhelmed by the intricate world of French accounting? You’re not alone. With its unique rules and regulations, it can be a complex landscape to navigate.

This glossary is your key to unlocking the secrets of French finance. Whether you’re a seasoned business owner or just starting out, this resource will help you to understand your financial health, make informed decisions, and ultimately, achieve your business goals with confidence.

• Abattement: A percentage applied by the tax office to your taxable income eg a 30% abatement means that you will be taxed on 70% of your income.
• ABC of Accounting: Not just me, but also all the things that YOU as an entrepreneur need a good handle on to succeed in business in France!
• Actif: The assets your business owns. This includes buildings, tools, vehicles, stock, unpaid invoices and cash (non-exhaustive list).
• Amortissement: The depreciation in value of an asset over a period of time.
• Autoentrepreneur/Microentrepreneur: A structure often chosen by new businesses – can be great to test out an idea, should not be viewed as a long-term solution.
• Apport: The capital brought to a new company by its directors/shareholders. Capital can be in the form of money, tools/materials, and occasionally specialist knowledge.
• Barème Kilométrique: Mileage allowance is often a more advantageous solution than buying a vehicle through your company.
• Bilan Comptable: Document showing the solvability of your business both in the long and short term.It is presented in table format showing assets and liabilities and is accompanied by a Compte de Résultat
• Business Plan: An imperative for projecting your business’s future, usually over 3 years, it should be as detailed as possible. Any bank will request this before lending.
• Cadeaux aux Clients: Yes, it’s perfectly possible to offer gifts to your clients and deduct them as a business expense (conditions apply!)
• Capacité d’Autofinancement (CAF): The ability of a business to repay its loans, to invest and to pay its directors/shareholders. A banker typically requires a CAF of +30% above loan repayment commitments.
• Capitaux Propres/Fonds Propres: The capital that directors have brought to the business plus the profits that have been left in the business.
• Charges Fixes/Charges Variables: Charges fixes are expenses that stay the same regardless of the level of your activity eg your rent. Charges variables are expenses that increase proportionately to the level of activity eg the amount of flour a baker needs to buy.
• Chiffre d’Affaires: Turnover or total sales or total amount invoiced. Attention, this is not necessarily the same as your total incoming.
• Compte de Résultat: Profit & Loss Sheet – a document showing all the incomings and outgoings of your business over the course of the fiscal year.
• Contrôle Fiscal: Tax inspection. These may be random but usually happen when anomalies or irregularities occur in your business management. They inevitably cost money. Best avoided.
• Cotisations/Charges Sociales: Obligatory contributions are paid on all self-employed revenue. These charges are HIGH and often catch out new business owners.
• Couverture Sociale/Protection Sociale: The ensemble of benefits that are funded by your social charges. These include health care, pension, sick pay, and maternity leave.
• Coût de Revient: The total cost of a product/service ie. not just the purchase/production cost but also transport, stockage, (wo)man hours etc. Essential for calculating your profitability.
• CSG/CRDS (Prélèvements Sociaux): Often confused with social charges, these are in fact taxes and are levied on all earned income, investment income and state benefits.
• Dividendes: These are taxable but are not subject to social charges. Conditions for drawing dividends apply and differ depending on the business structure.
• Entreprise Individuelle: A sole trader or ‘personne physique’. You and your business are the same entity. Your business profits are your personal revenue although an option for corporation tax is now available.
• Expert Comptable: Chartered Accountant. Sets up or closes your business and prepares your financial documents each year. Answers questions that you specifically ask. Do NOT expect them to volunteer information – very few see this as their responsibility.
• Immobilisations: Investments (as opposed to expenses). These are bigger ticket items that will be depreciated over time and could be tools, computers, building works, actual buildings etc.
• Impôts sur les Sociétés (IS): Corporation Tax or Company Tax. Just as an individual pays income tax, a company pays corporation tax. Some business structures’ natural default position is to pay corporation tax, others can opt for it if they wish.IS has two different rates and is calculated progressively.
• Liasse Fiscale: End of year tax submissions are prepared and presented, usually by your accountant, to the tax office.
• Marge Brut: Gross Profit = Sale Price – Cost Price.
• Marge Net: Net Profit = Sale Price – Total Cost Price (ie cost price + all other costs eg labour, transport, marketing, a percentage of insurance and all utilities etc).
• Objet Social: The nature of the business’s activity and, therefore, what it is allowed to do. When you set up your business, think not only about what you will be doing in the immediate term but also what you may do in the future and make the objet social as wide-ranging as possible.
• Siège Social: Your business’s address – this could be your own address or a different one.
• Société: Your business and you are two separate entities. When you create a ‘société’, you create a ‘personne morale’.
• Statut Juridique: The structure that you choose for your business eg Entreprise Individuelle, SARL, SASU etc.
• Trésorerie: Cash flow. The ideal is to keep 2 months’ worth of running costs in your current account at any time to avoid a cash shortage.
• TVA (Taxe sur la Valeur Ajoutée): Standard rate is 20% although lower rates exist for certain activities and other activities are exonerated. Any business can opt out of TVA if turnover is below the TVA threshold, but declarations are obligatory above the threshold.
• TVS (Taxe sur les Véhicules de Société): An annual tax due on vehicles bought in the company name. Its rate depends on the kind of vehicle and how much CO2 it produces.

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