Choosing accounting software in Luxembourg

The short version. Accounting software usable in Luxembourg has to pass four tests: hold the PCN 2020 standard chart of accounts, produce VAT returns in the structure the eCDF platform expects, generate a compliant FAIA audit file when the Registration Duties, Estates and VAT Authority asks for one, and keep records usable for ten years. Most general-purpose tools sold into Luxembourg fail at least one of the last two. Put these four questions to a vendor before you sign, not afterwards.

The scene repeats itself. A director picks an appealing invoicing tool, often French or American, often cheaper. Two years later the AED asks for a FAIA file and nobody can produce one. Out come the entries, rebuilt by hand, an export cobbled together in a spreadsheet, and the accounting firm bills hours nobody budgeted for. The software was not bad. It simply was not Luxembourgish.

Which accounting software should you choose in Luxembourg?

Accounting software suited to Luxembourg must natively handle the PCN 2020 standard chart of accounts, produce VAT returns in the eCDF format, export a FAIA audit file on request from the tax authority, and guarantee ten-year retention of records. Those four requirements, not the length of the feature list, decide whether a tool is usable in the Grand Duchy.

Test 1: the PCN 2020 standard chart of accounts

Luxembourg mandates a standard chart of accounts, and it resembles neither the French plan nor a freely configurable analytical structure. Software that lets you "set up accounts however you like" is not compliant, it is merely flexible. The right question to a vendor is not "can we configure a chart of accounts?" but "do you ship PCN 2020 preloaded, and do you maintain it?".

The difference is anything but theoretical. Without a standard chart shipped and maintained, every new company starts from a handcrafted setup, annual accounts do not generate in the structure expected at filing, and any handover to another firm turns into a project.

Test 2: eCDF filing, not just "a VAT summary"

Almost every package can produce a VAT summary. Far fewer can produce the return in the structure and nomenclature the eCDF platform expects, with the right boxes and the right taxable bases per rate. In practice, that gap is measured in hours of re-keying per quarter.

Ask for a demonstration on a realistic data set containing at least one intra-EU transaction, one import and one exempt supply. That is where tools fall over, not on a domestic invoice at 17%. We cover how the platform works and the applicable calendar in our article on Luxembourg VAT returns.

Test 3: the FAIA export, where most candidates break

This is the test that eliminates the most contenders, and the one nobody thinks to run at purchase, because it only matters during an audit. FAIA is the computerised audit file the AED can require from a business keeping computerised accounts. It has a defined format and an expected structure, and it cannot be improvised the night before an inspection.

Three vendor answers should worry you: "we can export to CSV", "our local partner handles that", and "no client has ever asked us for it". None of the three means the software produces a FAIA file. The only acceptable answer is a demonstration of the export, on data. We set out the procedure and the pitfalls in our guide to exporting FAIA from Odoo.

Test 4: ten-year archiving, and access after you leave

Accounting records must be kept for ten years in Luxembourg. That obligation sits with the business, not with its vendor, which is exactly what makes the exit clause decisive. Ask the question plainly: if I cancel my subscription in three years, in what format and for how long can I retrieve my data, entries and attachments included?

Answers vary enormously between models. Some SaaS vendors cut access at term and offer a paid extraction within a limited window. Others hand over a complete, usable database. Across ten years of legal obligation, that gap is not a contractual detail, it is a risk.

Accounting package or ERP: where the line sits

An accounting package records what happened. An ERP runs what is happening, and the accounting follows from it. As long as your business fits into a few dozen invoices a month, a good compliant accounting package is plenty, and we say so readily to directors who consult us too early.

The case for switching arrives when you start re-keying. Stock tracked in a spreadsheet and invoiced elsewhere, expense claims travelling by email, a CRM disconnected from invoicing: at that point each extra tool adds a layer of copying, and therefore of errors. That is when a single foundation starts paying for itself, a subject we cover in our Odoo for Luxembourg SMEs guide.

The question almost nobody asks

You are about to choose a tool, then choose an accounting firm. In nearly every case the two never speak. Your firm works in its own software, you work in yours, and somebody bridges the gap each month by export, by email, or by re-keying. That is the invisible cost of how most Luxembourg SMEs are set up, and it appears on no invoice.

Removing it is the choice we made. We deploy your Odoo, configured for PCN 2020, Luxembourg VAT and the FAIA export, and then we keep your books inside it. No monthly export, no double entry, no version of the truth that shifts depending on where you look. Your bank feeds and supplier invoices post continuously, and you read your position in real time rather than the following spring. No conventional accounting firm touches your ERP; no integrator keeps your books. The fixed fee starts from €325 per month, all in, with the licence and configuration included in the engagement.

When this model is not the right one

Let us be honest about the limits. If you are attached to a strong industry-specific package, if your sector imposes a vertical tool, or if you have just invested in a recent solution that passes all four tests, switching makes no sense in the short term. We will tell you that at the first meeting rather than sell you a migration. Equally, a complex multi-jurisdiction holding structure or an operation with unusual volumes belongs somewhere other than with us.

Frequently asked questions

Which accounting software is compliant in Luxembourg?

Software is usable in Luxembourg if it handles the PCN 2020 standard chart of accounts, produces VAT returns in eCDF format, exports a compliant FAIA audit file and allows records to be kept for ten years. These four criteria matter more than the breadth of features.

Will French software work for a Luxembourg company?

Rarely as it stands. The chart of accounts, the VAT nomenclature and the audit file all differ. Some vendors offer a Luxembourg localisation, others do not. Insist on a demonstration of PCN 2020, the eCDF format and the FAIA export on real data before committing.

What is the FAIA file and why must my software produce it?

FAIA is the computerised audit file the Registration Duties, Estates and VAT Authority can require from a business keeping computerised accounts. Software that cannot generate it leaves you rebuilding it by hand during an inspection.

Do I need an ERP or just an accounting package?

A compliant accounting package is enough as long as your business generates no re-keying between tools. Once stock, sales, expense claims and invoicing live in separate systems, a single foundation becomes cheaper than the sum of the copying.

Is software included when an accounting firm keeps the books?

It depends on the model. Most firms work in their own tool and leave yours to you. At Advena the books are kept in the Odoo we deploy for you, and the tool is included in the fixed fee from €325 per month.

Further reading

• Odoo in Luxembourg: is it the right ERP for your SME?
• The FAIA audit file in Luxembourg: generating it from Odoo
• Luxembourg VAT returns: filing frequency, eCDF and deadlines
• Accounting firm in Luxembourg: the complete guide for an SME
• What an accounting firm costs in Luxembourg: fixed fee, hourly rates and hidden extras

Why Advena?

We are both the integrator that configures your management system and the accounting firm that keeps your books inside it. That means one system, no re-keying between invoicing and accounting, and figures you can read in real time. A fee announced up front from €325 per month, a named account manager, and no invoice outside the monthly fee. We will tell you plainly if your current software already does the job.