Digital Financial Report (DiFin)
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What is the Digital Financial Report (DiFin)?
The Digital Financial Report (DiFin) is a digital standard with which the German banking industry offers you a modern procedure for the electronic transmission of annual financial statements and income statements without media discontinuity – simple, secure, time and resource-saving.
The submitted annual financial statements or income statement is an essential basis for the credit assessment that financing banks and savings banks are legally obliged to carry out. Until now, you have submitted these documents in paper form or as a PDF by email, even though they have been created electronically. As an important contribution to the digitalization of economic life, the Digital Financial Report (DiFin) is supported by the Federal Government’s Digital Agenda. Further information can be found on the official homepage of the Digital Financial Report.
What’s new with DiFin?
The DiFin procedure is currently in the next stage of expansion to create bidirectional transmission channels. Up to now, the route has only led from the sender (company or business consultant) to the recipient (bank or savings bank). In future, creditworthiness parameters will be sent back from financial institutions in a planned “return channel”, whereby financial institutions will also become senders. In future, advisory sectors and companies will receive credit parameters without media discontinuity and will therefore also become recipients. The DiFin return channel is very advantageous for companies and business consultants, as another manual process is completely digitized.
What advantages does the Digital Financial Report (DiFin) offer you?
By using the Digital Financial Report (DiFin), you are making a key contribution to the German government’s “Industry 4.0” digitalization initiative by the sectors involved in the annual financial statement process in order to ensure that German companies remain competitive in the future.
- There is now only one electronic distribution process for annual financial statements. They will be transmitted to banks and savings banks in the same way as they are already transmitted to the tax authorities and the Federal Gazette.
- The administrative effort involved in handling paper-based financial statements will be eliminated, while electronic data transmission will save time and process costs.
- The error-prone media discontinuity in the transmission of financial statements is eliminated.
- The number of time-consuming and labour-intensive queries is reduced thanks to the standardized process.
- A significant part of the credit process is accelerated. This can shorten the processing time for loan applications.
- The required technology has been tried and tested in practice.
This is why the Digital Financial Report (DiFin) is an important step towards the consistent digitalization of all financial processes within the company.
Will the scope of my financial statement data change? Do I need to provide more information?
No: The scope of reporting and the depth of information do not change compared to the previous submission of annual financial statements. The XBRL standard only affects the technical data transfer, it does not create a new accounting standard. The entire procedure is still based on the individual business relationship between you and your bank or savings bank.
How does the Digital Financial Report (DiFin) work?
Since the 2013 financial year, the tax office has been accepting annual financial statements for tax purposes exclusively as so-called e-balance sheets in XBRL (eXtensible Business Reporting Language) format. Annual financial statements and income surplus statements are almost always prepared using accounting software. Tax consultants, auditors and companies that prepare financial statements have therefore had the technology and expertise to transfer annual financial statements electronically for some time. The Digital Financial Report (DiFin) also uses this tried and tested technical infrastructure.
Is my financial statement data secure?
Banking secrecy and data protection also apply without restriction to the Digital Financial Report (DiFin): As before, your financial statement data will be processed both by your tax advisor or auditor and by your bank or savings bank in strict compliance with all data security and data protection regulations. All statutory and contractual confidentiality obligations also apply unchanged under the Digital Financial Report (DiFin). As before, the responsible persons in your company are the ones who bindingly determine the financial statements and decide who receives your data. By sending it directly to the intended recipient, third parties have no access to the data.
The financial statement data is transmitted directly using a technology that has proven itself in the financial services industry for encrypting and authenticating the parties involved in the transmission process.
Instructions for participating in the Digital Financial Report (DiFin)
In April 2018, the sending and receiving of digital financial reports (DiFin) started throughout Germany. Participating credit institutions can be found on the Digitaler-Finanzbericht.de website. Read the instructions below to find out how you can take part.
for reporting companies
for economic consultants
- Check whether the bank you work with is participating and can receive the digital financial report. To do this, either enter the bank sort code (BLZ) in the eBilanz-Online administration menu under “Extra – Availability check” or take a look at the Digitaler-Finanzbericht.de website.
- Contact a participating credit institution and have them send you the declaration of participation and commitment (TVE) with your customer number. With this TVE, you agree to the sending of the Digital Financial Report (DiFin) and declare the “material identity” of the annual financial statements you have submitted digitally to your bank. Only then will electronic submissions be legally recognized by the recipient. It is valid until revoked and does not need to be extended.
- If you wish to send financial statements to different banks, a separate copy of the TVE must be sent to each bank.
- If digital financial reports (DiFin) are to be sent by your financial advisor, please send him a copy of the TVE for information purposes and make an agreement with your advisor regarding dispatch.
- Create the digital financial report (DiFin) in eBilanz-Online either as a separate report or create a combined process and use the convenient data transfer from the disclosure, for example. As usual, you will find detailed instructions for use in the user manual.
- At present, you are (still) required to send an annual financial statement in PDF format so that data can be reconciled by the recipient in case of doubt. You can upload this file directly to the report. A signature is NOT required here.
- Clarify with your client whether he is interested in participating or whether he has already been approached by his bank. Check whether your client’s bank is already participating in the DiFin procedure. To do this, either enter the bank code in the eBilanz-Online administration menu under “Extra – Availability check”. Or you can take a look at the Digitaler-Finanzbericht.de website.
- Your client declares to his bank that the annual financial statements you have transmitted digitally are binding with the declaration of participation and liability (TVE) issued by the bank. All your client has to do is enter your law firm as the sender in their TVE in order to authorize you vis-à-vis their bank or savings bank.
- Agree the electronic transmission of financial statement data with your client, if necessary via a corresponding declaration of participation, and ask for the name of your client’s receiving bank with sort code and customer number (recommendation: copy of the TVE). You will need this information for electronic transmission.
- Create the digital financial report (DiFin) in eBilanz-Online either as a separate report or create a combined process and use the convenient data transfer from e.g. the disclosure. As usual, you will find detailed instructions for use in the manual.
- In the initial phase, you are required to send an annual financial statement in PDF format so that the recipient can make a comparison in case of doubt. You can upload this directly to the report. A signature is NOT required here.
Frequently asked questions about the Digital Financial Report (DiFin)
How is data protection guaranteed with the new transmission method?
The Digital Financial Report (DiFin) is based on authentication and encryption technologies that have been tried and tested in the financial services sector.
This ensures reliable protection of the financial statement data during transmission. In addition, special attention is paid to the reliable identification of the sender so that financial statements can only be sent by authorized users.
Do banks require more information with the Digital Financial Report (DiFin)?
No, as before, the required information results from the relationship between the customer and the credit institution. The changes only affect the way in which the financial statement data is transmitted.
Does the new procedure change the liability situation between the tax advisor/auditor involved and the receiving credit institution?
Financial institutions that participate in the Digital Financial Report (DiFin) have made it legally clear that the “economic advisors” are not liable to them for damages caused by negligence or gross negligence that arise exclusively from the special nature of the electronic transmission of financial statements. This means that tax advisors/auditors are not placed in a worse position with electronic submission than is the case with (paper) submission.
Which banks are taking part?
You can find a list of the credit institutions that are ready to receive them on the Digitaler-Finanzbericht.de website.
Which financial statements can be submitted digitally for a credit check?
Participating banks use the core and supplementary taxonomy from version 6.0, in some cases already 5.4.
Which versions are accepted can be seen in eBilanz-Online in the administration menu under “Extra – Availability check” using the bank code.
Does the attached image copy in PDF format have to be signed?
No, in terms of digitization, you can also send the PDF file without a signature. Scanning is therefore not necessary.
What does “material identity” mean?
The information in the financial statements in the attached PDF file and the information recorded in the Digital Financial Report (DiFin) convey the same information about the company’s net assets, financial position and results of operations. The recipients therefore have the guarantee that the digitally transmitted data is “leading” and that the PDF file provided does not need to be printed out.
