The Entrepreneur's Short Guide to Outsourced Accounting Services in Vietnam

Outsourced Accounting Services in Vietnam: A Simplified Guide fo​r Small Business Owners

Running a small business can be quite a journey (some might say, and adventure) full of opportunities and challenges. This applies doubly-so for those venturing into Vietnam's fast-growing market. Keeping track of finances is just one part of accounting. However, one common mistake that first time business owners often make is overlooking legal compliance in Vietnam. This is still an emerging market, and as one can expect, things are seldom black and white, so we've prepared this simple yet deep look into accounting requirements in Vietnam for small business owners, or foreign investors yet unfamiliar with how things work in this part of the world.

Why Small Businesses Need Accounting Services

As a small business owner, you probably already have your hands full—managing operations, growing your customer base, and keeping up with the competition. Adding financial management to the mix can be overwhelming, especially in a country like Vietnam, where tax laws and reporting requirements can be complex and unfamiliar.

​​All small business owners will face the same hurdles:

• Limited Resources - Small businesses often operate with lean teams. Managing accounting in-house can take valuable time away from other critical areas of the business, such as sales, marketing, or customer service.
• Compliance with Local Regulations - Vietnam’s tax system has specific requirements, including filing deadlines, tax declarations, and detailed bookkeeping. Unfamiliarity with these, can lead to a small error or missed deadline, which can then lead to penalties.
• Lack of Financial Expertise - Many entrepreneurs are experts in their field but may not have the financial background to handle accounting complexities. This can lead to mistakes that affect cash flow, profitability, and long-term planning.
• Staying Organized - With invoices, receipts, payroll, and expenses piling up, keeping financial records organized is a constant challenge—especially during tax season or audits.

Key Tasks Performed by Accounting Service Providers

A good solution, at least for the first few years of operations, is to outsource your accounting requirements. As a business owner, you should be focused on growth, and not on admin. Professional accounting services will do this for you, and the good ones will go beyond just crunching numbers—they act as a strategic partner in your business’s success.

• Bookkeeping - Bookkeeping is the foundation of any accounting service. It involves the accurate recording of all financial transactions, including sales, purchases, payments, and receipts (payables and receivables). This ensures your books are always up-to-date and organized, making it easy to track your cash flow and prepare for audits.
• Financial Statement Preparation - Professional accountants prepare essential financial documents such as balance sheets, income statements, and cash flow statements. These reports give you a clear picture of your business’s financial performance and help you make data-driven decisions.
• Payroll Management - Managing employee salaries, bonuses, and benefits can be complex, especially with Vietnam’s labor laws. Accounting service providers handle payroll processing, ensuring accurate payments and compliance with tax and social insurance requirements.
• Tax Declaration and Audit Preparation - Vietnam’s tax system can be daunting for small business owners. Accounting service providers assist with preparing and filing tax declarations, including value-added tax (VAT), corporate income tax, and personal income tax for employees. At the end of the year, the accounting vendor will also help you prepare all the documents required for the annual audit. 

What are some Key Accounting Requirements in Vietnam?

In Vietnam, there are specific requirements that all businesses must adhere to, regardless of size or revenue. One of the most critical aspects is the mandatory maintenance of accounting books and the preparation of financial reports. This is not just a suggestion; it's a legal obligation.

What does this mean for you? It means that whether your business is booming or just starting out, you must keep meticulous records of all financial activities. Failing to do so can result in administrative sanctions. These penalties are not just monetary; authorities might even require you to halt business activities. 

• Mandatory Bookkeeping and Financial Reporting: Businesses in Vietnam are legally required to keep accounting books and prepare financial reports. This is a strict requirement, not optional.
• Administrative Penalties for Non-Compliance: Failure to maintain proper accounting records and prepare financial reports can lead to administrative sanctions. In addition to penalties, authorities may require businesses to retroactively complete the missing records and reports.
• Obligation Regardless of Revenue: Even businesses with no revenue, expenses, or transactions must still keep accounting books and prepare financial reports.
• Opening Accounting Books: Businesses must open accounting books at the beginning of each annual accounting period. Newly established enterprises must open books from their establishment date.
• Chronological Recording: All economic and financial transactions must be recorded in the accounting books in the order they occurred. Accounting books must be maintained continuously from the time they are opened until they are closed.

Key Accounting Services Tailored for Small Businesses

Here’s a detailed look at what accounting services typically include and how they can benefit your business.

• Preparing Accounting Documents - Accounting services ensure that all your financial records are properly documented and organized. This includes creating invoices, processing receipts, and maintaining detailed transaction logs. Accurate documentation is not just a legal requirement but also critical for tracking your business performance over time.
• Managing Payables and Receivables - Keeping track of what you owe (payables) and what’s owed to you (receivables) is crucial for maintaining healthy cash flow. Accounting providers help manage these transactions by:
  • Monitoring due dates for payments to suppliers.
  • Following up on outstanding invoices from clients.
  • Reducing the risk of late fees or missed payments.
• Handling Payroll and Taxes - Payroll management is a time-consuming task, especially as your team grows. Accounting services can handle everything, from calculating salaries and deductions to ensuring timely payments. Additionally, they ensure compliance with Vietnam’s tax regulations, helping you:
  • Prepare and file tax declarations.
  • Claim eligible tax benefits.
  • Avoid penalties for late or incorrect filings.
• Expense Tracking and Cash Flow Management - Monitoring your expenses is essential for keeping your business on budget. Accounting services help track operational costs, identify areas for savings, and provide insights into your cash flow. This enables you to:
  • Make informed financial decisions.
  • Plan for upcoming expenses.
  • Maintain liquidity for unforeseen circumstances.
• Annual Financial Reports - At the end of the fiscal year, businesses are required to submit financial statements summarizing their activities. Accounting professionals prepare these reports, ensuring they meet local standards and regulations. Key components of these reports include:
  • Income statements.
  • Balance sheets.
  • Cash flow statements.

How to Start Outsourcing Accounting Requirements

Partnering with an accounting firm simplifies your finances and ensures compliance. Here’s a streamlined process to get started:

1. Initial Consultation: Discuss your business’s specific needs, financial challenges, and goals. This helps the firm tailor their services.
2. Discuss Needs and Receiving a Quote: The firm provides a proposal outlining the scope of work, deliverables, and costs. Review and negotiate as needed.
3. Sign a Service Agreement: Formalize the partnership with a clear contract that details services, timelines, confidentiality terms, and payment schedules.
4. Implementation and Setup: The firm sets up systems, organizes existing financial records, and integrates workflows for seamless collaboration.
5. Regular Updates and Support: Receive ongoing updates, monthly or quarterly reports, and expert advice to guide your business decisions.

Conclusion

Partnering with a professional accounting service is key to ensuring your business’s financial health and legal compliance in Vietnam. At Jump, we provide tailored accounting solutions that help startups and small businesses navigate the complexities of local regulations, streamline financial operations, and save valuable time. Whether you’re just starting out or looking to expand, we can support you every step of the way. Hopefully, the outline above has been thorough enough to give you a good basis for understanding the reasons why outsourcing your accounting might be a good way for you move forward with your business.

If you’re ready to take the next step, let’s start a conversation about how we can help your business thrive. Reach out to us today to schedule a consultation. We’re here to make accounting easy and effective for entrepreneurs just like you!