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GUIDANCE ON TAILORING THE ACCOUNTING SYSTEM FOR NEW ENTERPRISES

Tailoring a complete and effective accounting system from the beginning for newly established enterprises is a prerequisite for the smooth running of the business system, fulfilling all management and business plans.

1. The accounting system is one of the key systems in enterprises

It can be said that the accounting system plays an important role in contributing to stabilizing the financial system, building a solid foundation for the development of enterprises. An appropriate accounting system provides all the information needed to:

  • Production support: Maximizing the production of low-cost products (materials, labor, depreciation, etc.)
  • Business support: Categorizing customers, goods, …
  • Financial support: Identifying loans, interest rates, …
  • Administration support: Making reports to analyze cash flow, revenue, profits, …

The ultimate goal of building a solid accounting system is to ensure the system is always stable and efficient throughout the business operation of enterprises.

2. How do you set up the right accounting system to support ongoing business activities?

In order to build a standard and effective accounting system, overcome the shortcomings, enterprises need to follow the order of 3 steps as below:

Step 1: Select the accounting model for the enterprise

The first requirement is that your enterprise must have a business bank account for transactions. Please note that your enterprise will only use this account to make transfers throughout the operation until dissolution.

The next requirement is to decide on an accounting model that is appropriate for the type of newly established business (internal departments /or outsource professional services). Besides that, enterprises also need to select the appropriate support tools (Excel / or the software depending on the size and requirements).

In addition, enterprises need to select an appropriate accounting regime and fiscal year to register it with the State Agency. Enterprises can choose the fiscal year starting from January 1 to make it easier to manage, finalize taxes and avoid unnecessary errors.

Step 2: Establish the process of bookkeeping and document storage

This is the most important part of the accounting system. Documents and invoices will be circulated from other places to the accounting department in a sequential manner to minimize misplacement. The accountants will base on these documents to record the accounting entries incurred.

For example: Enterprises can specify the process of issuing invoices to customers. Invoices issued by an accountant after the goods have been sold will be signed for approval by the director. After that, 1 copy will be sent to the customer, the other two will be stored at the accounting department to make a receipt.

In addition to establishing a process for document storage, it is also important to set up the accounting record. Accounting books of enterprises need to be modeled and numbered for documents in a uniform manner to avoid loss.

Step 3: Prepare periodic reports, update and record all transactions arising regularly

Making regular reports will help owners of enterprises to catch up on the current business situation such as: increasing or decreasing revenue, identifying expenses that are burdensome to find ways to overcome. If your enterprise is looking for an investment, the available reports like this will be extremely helpful.

3. What are the benefits of building an effective accounting system for your enterprise?

Setting up an accounting system with a solid foundation brings many benefits to enterprises, specifically as follows:

Creating an effective accounting system helps enterprises minimize data errors and save time for administrators.

A good accounting system also helps enterprises control the internal and specialize the tasks well.

Another benefit is to provide managers with useful and accurate information that will enable them to find out the causes of profit, loss, cost-distribution structure for evaluating and making effective financial plans.

A solid accounting system also helps enterprises easier to mobilize investment or make loans, because these units will trust more when dealing with enterprises having a clear and transparent accounting system.

In addition, a good accounting system also helps enterprises feel more secure in tax issues.

The above article has mentioned 3 important steps to setting up a complete accounting system for newly established businesses. The financial management – accounting of enterprises requires accuracy and simplicity to make it easy to track and inspect. Therefore, in the process of building an accounting system for your enterprise, should you have any questions,  kindly do not hesitate to contact VNC via Website www.vnc-os.com – Hotline (+84) 902 595 171 – (+84) 28 6670 3100 for direct advice and to learn about our available services.

Best regards.