Small business owners who wish to set up a company in Thailand need to have at least the basic knowledge of accounting and bookkeeping, especially regarding the accounting compliance laid down by the Accounting Act, Civil and Commercial Code, and other relevant laws in the country. This will take up a tremendous amount of resources for a small business.
Fortunately, small business owners can improve their accounting by following the following tips and best practices.
Separate personal and business expenses
Creating a dedicated corporate bank account for savings and checking saves business owners a considerable number of working hours when it is time to tally the deductible business costs. Business owners should learn and get used to utilizing different bank accounts for personal and business purchases. In case they are contributing capital to their business out of their assets, they should make sure they document everything.
Also, by maintaining a dedicated corporate bank account and business credit card, business owners can protect their assets from legal liabilities due to business debts, particularly if they own a limited liability company.
Track each expense
Small business owners in Thailand should make it a habit to categorize their expenses and track their cash flow to make sure they can maximize tax credits and write-offs. The amount can add up pretty quickly, and they can easily run out of money.
They should utilize their business credit cards for every purchase to not end up with a wallet filled with unsorted paper receipts. Moreover, they can earn cash back and rewards for their spending.
Record income correctly
Business owners can easily lose track of their sales, revenue, and loans. Hence, they should keep tabs on all their incoming cash flows to avoid underpaying their taxes and facing penalties. Similar to expenses, their accounting techniques will determine the proper time to record income.
Automate accounting function with reliable accounting software
Accounting software is an excellent tool suitable for any small business. Small business owners can freely restrict access to the software; they can use it on their own or offer secure access to their accountant or bookkeeper. Accounting software can also store copies of invoices and checks the users have paid.
Freshbooks and Quickbooks are some of the popular accounting software in Thailand. Nevertheless, there are also several other decent accounting software on the market. Business owners should pick one that is best suited to their business needs.
Anticipate major expenses
Apart from the main expenses, business owners should set aside some budget for expected major expenses, including equipment replacement, computer upgrades, and tax deadlines. A greater amount of capital expenses usually come up during the slower months. Therefore, business owners should plan to prevent a cash-flow crisis.
Follow up on receivables and invoices
Successful submission of an invoice does not always result in a successful payment. They should also avoid wasting hours sifting through their profit and receivables listing by revisiting vendors who have yet to pay them.
To increase the chances of getting paid early, business owners should send their invoices right after completing a job. They should follow up with the customers with friendly reminders as the deadline gets closer. They may also utilize an early payment discount to motivate their customers to pay faster. Making online payments available and utilizing cloud-based accounting software can also help automate the process for them.
Consider hiring an accounting professional
Hiring a professional accounting services agency in Thailand can create a huge difference, even if the business owners hire it for a few hours a week or month. For instance, a competent accounting services firm is proficient in accounting and tax regulations, thereby ensuring the company stays compliant with corporate law in Thailand and protects it against tax violations and errors.
Accounting service Thailand also helps make the various legal processes easier, both for the business owner and company. Apart from tax filing, a professional accounting Thailand provides a wide range of other beneficial services, including company incorporation, corporate and personal tax consulting, payroll, company audits, visas and work permits, and business licenses services.
Generally, the rates of accounting services in Thailand depend on three major factors, including the average accounting transactions each month, services the company needs, and its complexity.
Before hiring an accounting firm, business owners should check their competency by asking specific questions related to their business. For instance, if the business owners have or intend to set up a software company, they should ask the firm about the industry’s specific laws.
For many small business owners, handling accounting and finance is the most daunting aspect of running a business. Their inability to keep their accounting in check may cause their company to face dire financial difficulties in the future. Small business owners who struggle to manage their accounting should follow these helpful tips and best practices to improve their accounting management.