If you run a small business, some customers may choose to pay with cash, and you're required to accept it.
But once that cash is sitting in your register, what should you do with it?
Danish law sets clear rules for registering, depositing, and using cash, and understanding them helps you avoid sanctions and build trust with your bank and business partners.
Why registration matters
Every cash payment needs to go through your till system. Registering cash accurately means your revenue reflects what you actually earned, which matters if you ever apply for a loan or need to show your bank an accurate picture of your business.
Three ways to use the cash you've collected
Once cash builds up in your business, you have three legal options for handling it.
Deposit it through a cash-in machine. Many Danish banks, including Lån & Spar and Nykredit, use a service from Nokas called "Kontanten" to let you deposit cash directly into your business account. You can find your nearest deposit point and confirm it accepts deposits through Nokas' website, then set up an agreement with them to get started.
Use it for business purchases, within limits. You can pay small business expenses in cash, but Danish law caps how much. As of March 2024, you can receive up to 14,999 kr. per transaction from a customer, and payments to suppliers must stay under 8,000 kr. if paid in cash. Larger supplier payments need to go through digitally, or you risk losing your tax deduction and becoming liable for the supplier's VAT.
Pay yourself. You can also use cash to pay yourself, but how you report it depends on your business structure. In a sole proprietorship, cash withdrawals count as personal income already taxed through the business, so you don't need to run them through a payroll system, though you still need to report your B-income. In an ApS, you're an employee of the company, so any cash salary needs to go through payroll and be reported via eIndkomst, just like any other wage.
Staying on the Bank's Good Side
When you open a business account, you give the bank an estimate of how much cash you expect to bring in. If your actual cash flow ends up higher than expected, tell your bank. Updating that estimate helps avoid unnecessary money-laundering flags and shows the bank you're on top of your business.
Practical Tips for Entrepreneurs
Register every cash payment in your till system as it happens
Keep receipts for all cash purchases so you can claim VAT deductions
Report any supplier payment in cash over 8,000 kr. to Skattestyrelsen via TastSelv Erhverv
Update your bank if your cash income grows beyond what you originally estimated.
Keep your accounting records for at least five years.
In Conclusion
Handling cash correctly protects your business from sanctions and builds trust with your bank and the tax authorities. Whether you're depositing cash, using it for small purchases, or paying yourself, the key is keeping accurate records and staying within the legal limits.
Video series: Cash management in a small company
Do you need help?
If you have questions about banking procedures or documentation, you can always contact Finklusiv for support and guidance.
