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Accounting: Do It Yourself Or Outsource It?

Accounting: Do It Yourself Or Outsource It?

For most starters, the administration is not a job that they are very much looking forward to. Nevertheless, you must draw up clear accounts and submit a correct tax return every year.

Why is the administration necessary?

A transparent administration is essential for your company. You see how your company is doing financially; it is also the basis of the annual tax return.

If your administration turns out to be incomplete or not converted into a tax return on time, this can lead to hefty fines from the tax authorities.

Grip on finances

Apart from all obligations, a well-organized administration also provides an overview of how your company is doing.

All income, expenses, unpaid invoices, the VAT return, deductions, and profit are all neatly arranged. This allows you to intervene in time when things are unexpectedly going less financially with the company.

"With a well-organized administration, you know how your company is doing."

Do it yourself or outsource it?

It is, therefore, important that you always have a good overview of the administration. This way you can quickly respond to current developments. But are you doing this yourself, or are you outsourcing this job?

First of all: small entrepreneurs and self-employed persons don't need to outsource the administration to an accountant or bookkeeper.

In principle, you can keep the administration up to date yourself, depending on your business situation, financial knowledge, and willingness to learn more about this.

Every company is different

No company is the same. For example, some entrepreneurs have little purchasing and a limited number of clients. Then the administration mainly consists of the invoices sent.

But there are, of course, also companies where this is much more complex. Many purchases and sales and dozens of customers and clients, sometimes even abroad. Then there are different rules, and it is soon wise to call in a financial expert.

Preparing financial statements

The professionals on the Auditing and Advisory team at Fischer & Partners prepare and submit annual financial statements for our client companies and all the supporting schedules that may be required by the Ministry of Commerce.

Thailand requires that a company prepare its annual financial statement in accordance with the generally accepted principles of accounting, issue the statement to its shareholders for approval, and then submit it to the Ministry of Commerce.

At Fischer & Partners, we offer our foreign clients advice and assistance in preparing the financial statement and the required supporting schedules as part of a comprehensive legal and accounting services package. The supporting documentation can involve schedules of expenses, payments, fees, cash receipts, and disbursements.

All companies doing business in Thailand, including partnerships and branches of foreign entities, are required to submit two sets of their audited financial statement and supporting schedules along with their annual income tax return to the Department of Commercial Registration of the Ministry of Commerce within 150 days of their fiscal year-end.

Along with the submission, the company must refer to the Annual General Meeting at which the financial statement and supporting schedules were approved and a list of the company's shareholders at the time of the meeting.

How do I set up accounting?

After you have registered with the Chamber of Commerce at the start of your business, have received a VAT number, and opened a business bank account, you can start setting up a transparent business administration.

In any case, keep the following items separate from each other:

  • Sales invoices

  • Purchase invoices

  • (Cash register) receipts

  • Bank statements

  • Offers / contracts / agreements

  • Time registration

  • Travel expenses

  • Tax assessments (split into sales tax, income tax, and health insurance law)

  • Trip administration

  • agenda

  • Personnel administration

Keep your records safe

You can archive this data in folders or with an accounting package. It does not matter to the tax authorities, as long as you keep everything safe. You have a retention obligation of ten years. So please do not throw away your receipts immediately, but keep them somewhere in a folder.

This applies, among other things, to the debtor and creditor administration, stock administration, purchase and sales administration, bank statements, calendars, and payroll administration.

Please note: you must keep data about real estate (for example, the business premises) for ten years.

"So do not throw away your receipts immediately, but keep them somewhere in a folder."

Choose an accounting tool

Doing your accounting is now very easy by using smart software. There are many different providers on the market, each with specific advantages. A handy alternative for starters who like to keep their accounts quick and easy.

"You can easily link accounting packages to Internet Banking Professional."

Online accounting is suitable for the self-employed person who does not want to keep Excel sheets or shoe boxes with receipts but wants to overview his company's financial position right away. This makes your accounting and VAT return almost automatically.

What is the advantage of an accountant?

Many starters opt for both options. They arrange their accounting themselves via an online package and let an accountant take a look. Some things sometimes go beyond your head—for example, tax issues or questions about write-offs.

For example, starting entrepreneurs have to deal with the self-employed and start-up allowance, SME profit exemption, and all kinds of changing tax conditions. An accountant knows all these rules.

If you want to devote all the time to your business, look for an accountant.

Take advantage of tax breaks.

When you hire an accountant, you usually get the most out of all tax benefits. There are also no additional assessments or fines from the tax authorities. After all, everything has been adequately implemented.

The maxim is therefore not without reason: a good bookkeeper or accountant pays for himself. Another advantage: these are business costs and are consequently deductible, just like VAT.