Lexoffice hidden flaws

Must Know Before Getting A Subscription

Here’s my personal take on the overall quality and functionality of lexoffice.

First things first. lexoffice is a great cloud-based accounting solution. IF - and this is a big if - you do not have that much knowledge and experience in the field of accounting.

AND if - this is a big if as well - you are (closely) working with a tax advisor. Because without a tax consultant who handles your bookkeeping with Datev… I do not see how you could ever have a satisfying experience running the financial side of your business. Here’s why. Let’s get to it!

The Basics

We start with the basics. Language, for example. As this article here is written in English the assumption is you would prefer to handle your accounting with a cloud-based accounting solution, focused on the German market, that supports English language as well. lexoffice, as of 2022, does support German language only. In contrast, one of its competitors, sevDesk supports multiple languages.

The same applies to currencies. In lexoffice you only have EUR as a single currency. For whatever reason. I really cannot understand why. And that sucks. Big time.

Another basic functionality that I (usually) take for granted, is being able to create “manual postings”. At the time of writing this, lexoffice supports just a handful of manual postings such as private car and phone usage, payroll and opening balances. But what if you would like to book the expenses for, say, your office rent directly on a general ledger account - without a document attached to it. And - most importantly - without having a corresponding bank transaction in lexoffice.

Okay, for some that might seem to be far-fetched. But. It happened to me. With a client. Who switched banks and - for whatever reason - did not have a csv of the ‘old’ business account. Meaning, there was no source-file to import bank transactions to lexoffice. And as manual postings can not be created, there is no way to properly “create a dedicated account” or account for it at all.

To make things worse. Going back to the above mentioned office rent example. I decided to upload a document to lexoffice in order to book the rent expense. But, alas, when you use the integrated (manual) function in lexoffice to “match payment” lexoffice automatically puts this on the account for “private withdrawals / private contributions”. You are not able to create and book this on an “offline bank account” or whatever you want to call it. This took me by surprise and is far removed from what I expect from an accounting solution.

Accounting Specifics

Let’s take this a bit further, more nerdy, or more bookkeeping-like. The better your knowledge of accounting, the less I recommend using lexoffice. For multiple reasons.

For example, you can only “access” the PnL accounts - okay, and some, but not all, Balance Sheet accounts.

To give you another real-life example. I saw a bank transaction (yes, some banks can automatically sync with lexoffice, check here if your bank is supported) for a loan. So I decided to book (in lexoffice “categorize”) this on the respective balance sheet account. To find out, to my astonishment, that this account does not exist in the “account overview”. You can post on it. But you cannot see it. It probably can be exported to Datev, that is, to your tax advisor. But I want to see it. I want to check what the balance is. Why would anybody not provide this “feature”?

The next “nifty feature” of lexoffice is that they support about 60 banks that can be connected to lexoffice. But mind the fineprint. At first glance it might appear as if your bank is supported. If you are lucky, you can connect and sync your account with lexoffice. But for some, you cannot pay invoices directly in lexoffice. Which again, is a bummer. You create and maintain all the master data. For instance, you see that a vendor needs to be paid. But this payment can - with some banks - not be triggered via lexoffice. Which is very sad indeed.

One last remark to banks. Let’s say your bank cannot sync with lexoffice. So you upload a csv. To then find out, that in lexoffice these “offline banks” will never show you the actual bank balance directly in lexoffice. This is “reserved for online banks only”.

Then there is one more aspect that really got to me. It is about reverse charge. Which is a complicated topic which we will not get into here. I just want to point out that, what I used to do with other online bookkeeping solutions, is not possible with lexoffice. lexoffice “does not allow you” to modify the chart of account. I mean, you can switch between SKR 03 and SKR 04. But you cannot create additional accounts. Also, you are limited to “reverse charge accounts”. Here’s one example.

Let’s say you hire a freelancer to do “Marketing” for your business. In lexoffice, this has to be put on the account for “services supplied by foreign contractors”. Only when using one of these accounts, the reverse charge will be accounted for correctly when submitting your VAT prepayment via lexoffice. But. Personally. I would like this expense to show up in my marketing account. But “Marketing” is reserved to “German invoices only”, as you can only select 7%, 19% or no VAT. Definitely not the “control over my bookkeeping” as I expected.

The same applies to outgoing-reverse-charge-invoices. You can only create them in lexoffice when subscribing to the highest pricing tier. Which I never did. Or want to do. Maybe then the incoming-reverse-charge-invoices can be handled better. But I highly doubt that.

Conclusion

In my opinion, lexoffice is suitable for absolute beginners in the field of accounting whose bookkeeping is - ultimately and eventually - completely handled by a tax advisor. The more profound knowledge you have, the more - and quicker - you will realize that lexoffice is not customizable and therefore not really adjustable to your specific needs. It just feels limited and lacks functionality. It is convenient, though. Especially if you have a purely German based business, with no foreign currencies and invoices from outside of Germany. If your business is a bit more complex I suggest checking out sevDesk or Accountable.

But why is lexoffice so popular? Am I the odd one out? Or maybe… It is because of affiliate marketing. There are so many people who are actively marketing lexoffice, it is hilarious. Good for them. And me. I am also “affiliated” and have “referred clients” in the past. However, if my clients ask for advice which accounting solution to implement. lexoffice is not that high on the list.