KPO Knjiga Demystified: How to Track Revenue Correctly

Last updated: March 2026. Reflects current requirements under the Zakon o porezu na dohodak građana ("Sl. glasnik RS", br. 80/2002, with amendments) and the Pravilnik o Knjizi o ostvarenom prometu paušalno oporezovanih obveznika ("Sl. glasnik RS", br. 24/2020).

Every Serbian paušalac must maintain a KPO knjiga — the Book of Realized Turnover. It's your only mandatory bookkeeping obligation and the primary document the Tax Authority uses to verify your revenue. Despite being a simple ledger, the KPO generates a surprising amount of confusion. Paušalci routinely record things that don't belong, omit things that do, use wrong exchange rates, and sometimes don't maintain one at all.

This guide covers everything you need to know: what the KPO is, what goes into it (and what absolutely doesn't), how to handle foreign-currency invoices, paper vs electronic format, and the seven most common errors that draw attention from the Poreska uprava.

What is the KPO knjiga?

The Knjiga o ostvarenom prometu (KPO) — literally "Book of Realized Turnover" — is a chronological register of every invoice you issue. Think of it as a revenue log. You record each invoice as you issue it, with basic details: date, description, amount.

That's it. There is no expense tracking, no balance sheet, no profit-and-loss statement. Paušalci are specifically exempt from full bookkeeping — the KPO is the simplified alternative.

The legal basis is the Pravilnik o Knjizi o ostvarenom prometu paušalno oporezovanih obveznika ("Sl. glasnik RS", br. 24/2020) and Article 43 of the Zakon o porezu na dohodak građana.

What goes into the KPO

Each entry in the KPO must contain:

1. Redni broj (sequential number) A running count: 1, 2, 3, etc. Resets to 1 on January 1 of each year. Entries must be in strict chronological order by date of service/invoice. No gaps in numbering.

2. Datum prometa (date of turnover) The date when the service was delivered or goods were supplied. For ongoing services (like a monthly retainer), this is typically the last day of the service period. This date determines which calendar year and which rolling 12-month window the revenue falls into.

3. Description A brief description of the service or goods: "Web development services for Company X, Invoice #2025-047." No need for elaborate detail — enough to identify the transaction.

4. Iznos (amount in RSD) The invoice amount converted to Serbian dinars. If the original invoice is in RSD, record it directly. If it's in foreign currency, convert using the NBS middle exchange rate on the datum prometa (see section on currency conversion below).

That's the entire structure. Four columns. One row per invoice.

What does NOT go into the KPO

This is where most mistakes happen. The KPO records only revenue from your business activity. The following items must never appear in it:

Expenses and costs. You bought a laptop for work? A plane ticket to visit a client? These are not revenue. Paušalci don't track expenses in any official capacity — the paušal system assumes a standardized expense deduction built into the tax formula.

Loan proceeds. If you received a business loan, that's not turnover. Don't record it.

Refunds or reversed transactions. If a client overpaid and you returned the excess, you need to record a storno (reversal) entry, not add the refund as a negative expense.

Interest income. Bank interest earned on your business account balance is not business turnover from your registered activity.

Private income. Salary from an employer (if you're running paušal as a side business), rental income, investment returns — none of these belong in the KPO.

The golden rule: if it's not an invoice you issued for your registered business activity, it doesn't go in the KPO.

Paper vs electronic KPO

You have two options:

Paper KPO (Overena knjiga)

Purchase a physical KPO book from a bookstore or stationery shop (they're sold pre-formatted). Before first use, it must be certified (overena) by the Poreska uprava at your local tax office. Bring the blank book and your rešenje to the tax office; they'll stamp it with your PIB and authorize it for the relevant year.

Paper KPO entries must be made in ink. Corrections require crossing out the error with a single line (so the original remains readable), writing the correct entry, and adding a note with the date of correction. No white-out, no erasing.

Electronic KPO (Elektronska knjiga)

Since 2020, paušalci may maintain the KPO electronically — in a spreadsheet, a dedicated app, or any digital format that preserves the required structure (sequential number, date, description, amount). The electronic KPO does not need to be certified by the tax office.

However, you must be able to produce a printout on demand if the Tax Authority requests it during an inspection. The electronic format should be tamper-evident — using a Google Sheet with version history or a dedicated accounting tool is safer than an editable Word document.

Most paušalci today use the electronic format. It's simpler and avoids the annual trip to the tax office for certification.

Foreign-currency invoices: the conversion rule

If you invoice in EUR, USD, or any other currency, you must convert the amount to RSD for your KPO entry using the NBS official middle exchange rate (zvanični srednji kurs) on the date of turnover (datum prometa).

Example: You issue an invoice for €2,500 with a service date of October 15, 2025. The NBS middle rate on October 15 is 117.35 RSD/EUR. Your KPO entry records 293,375 RSD (2,500 × 117.35).

A few important points:

• Use the middle rate (srednji kurs), not the buying or selling rate.
• Use the rate on the datum prometa, not the date you issued the invoice (if different), not the date the client paid, and not the rate your bank applied during conversion.
• The difference between the NBS middle rate and the rate your bank actually applies when converting the incoming payment is called a kursna razlika (exchange rate difference). This difference is irrelevant for KPO purposes.
• If the NBS didn't publish a rate on that specific date (weekend or holiday), use the rate from the last business day before it.

Storno entries: correcting or canceling invoices

If you need to cancel or correct a previously recorded invoice, you make a storno entry in the KPO. This is a new line with the next sequential number, referencing the original entry, with a negative amount.

Example:

• Entry #23: Invoice #2025-023, October 10, Web development for Client X, 250,000 RSD
• Entry #24: STORNO of Entry #23, October 15, Cancellation of Invoice #2025-023, -250,000 RSD

If you're correcting the amount rather than canceling entirely:

• Entry #24: STORNO of Entry #23, -250,000 RSD
• Entry #25: Corrected Invoice #2025-023-R, 230,000 RSD

The 7 most common KPO mistakes

Based on forum discussions, Tax Authority inspection reports, and questions from the paušalci community, these are the errors that cause the most problems:

Mistake 1: Recording expenses

The KPO is income-only. No office rent, no equipment purchases, no travel costs, no subscriptions. Paušalci occasionally start recording expenses "just in case" or because they think it will help at tax time. It won't — and it confuses your revenue total.

Mistake 2: Recording bank-to-bank transfers

Transferring 200,000 RSD from your business account to your personal account is not revenue. It's your own money moving between your own accounts. Recording it inflates your apparent turnover and can push you closer to (or over) the revenue limits.

Mistake 3: Using the wrong exchange rate

Three common sub-errors here:

• Using the bank's conversion rate instead of the NBS middle rate
• Using the rate on the payment date instead of the service date
• Using a rate from a random currency converter website instead of the official NBS rate

Mistake 4: Not converting foreign invoices at all

Some paušalci record EUR invoices as-is: "€3,000" in the amount column. The KPO must be in RSD. Every foreign-currency amount must be converted.

Mistake 5: Breaking chronological order

KPO entries must be in strict chronological order by service date. If you issue Invoice #50 on March 15 and Invoice #51 on March 10 (for a service delivered earlier), the KPO must record Invoice #51 first (March 10) and Invoice #50 second (March 15).

Mistake 6: Not maintaining the KPO at all

Some paušalci — particularly those with only a few invoices per year — simply don't keep a KPO, assuming it's optional or that their bank statements are sufficient. The KPO is mandatory.

Mistake 7: Forgetting to certify a paper KPO

If you use a paper KPO, it must be certified by the Poreska uprava before first use each year. An uncertified paper KPO is treated as if no KPO exists. The electronic KPO avoids this problem entirely.

KPO and tax inspections

During a poreska kontrola (tax inspection), the inspector will typically request:

1. Your KPO knjiga (paper or electronic printout)
2. Copies of all invoices referenced in the KPO
3. Your bank statements for the same period

The inspector cross-references these three sources. Invoices should match KPO entries (same dates, same amounts after conversion). Bank statement deposits should correspond to invoiced amounts (allowing for exchange rate differences and payment timing).

The best defense during an inspection is a clean, chronological KPO that matches your invoices exactly.

Key takeaways

1. KPO records only income from your business activity. Never expenses, transfers, loans, or personal income.
2. Four columns: sequential number, service date, description, amount in RSD. That's it.
3. Foreign invoices must be converted to RSD using the NBS middle exchange rate on the service date.
4. Electronic format is easier — no certification needed, no trip to the tax office. Just ensure you can produce a printout on request.
5. Chronological order is mandatory. Sort by service date, not invoice number or issue date.
6. Never modify existing entries. Use storno (reversal) lines for corrections and cancellations.
7. The KPO total is your official revenue for limit calculations. Keep it accurate and you'll never be surprised by a Tax Authority inquiry.