Periodic financial reporting services in Vietnam

In the context of an increasingly developing economy and increased competition in the market, effective financial management is a key factor determining the success of a business. Financial reporting is not only a tool to honestly and transparently reflect the financial situation and business results, but also the basis for businesses to come up with appropriate strategies. However, the preparation of financial reports requires high accuracy, expertise, and compliance with legal regulations. Therefore, financial reporting services have become an effective solution for businesses, especially small and medium-sized enterprises, to optimize time, cost, and quality assurance. Viet An Tax Agent will bring you periodic financial reporting services to help businesses manage their finances more effectively.

What are financial reportings?

Financial reportings are a system of information related to finance in a specific period of time of an enterprise, presented in accordance with accounting regulations, regulations, and standards. That way, businesses will provide information about assets, fairy lines, capital, debts, revenues and expenditures,..,

Financial reportings apply to all fields and types of enterprises in accordance with the provisions of Vietnamese law. All enterprises are obliged to prepare and submit financial reportings accurately and on time, in accordance with the provisions of the Law on accounting and statistics

What does the financial reporting consist of?

Income Statement

An earnings statement presents a summary of a business’s revenue, assets, and profits over a specific period of time. This report is the most scrutinized of the various reports, because it shows the financial performance of an entity. Income reportings are presented in a certain order, from general to detailed, making it easy for readers to grasp the financial situation of the business

Balance sheet

The balance sheet presents an overview of the assets, liabilities, and equity of shareholders in a business on a specific date. It can be used to check the liquidity of a business. The balance sheet is divided into two parts:

• The asset section includes everything the business owns, including current and fixed assets
• The liabilities and equity portion includes all that the business owes and what is owned by the business owner

Cash Flow Statement

The cash flow statement presents a comprehensive view of a business’s cash flows related to operations, finance and investment in an accounting period, divided into three main activities:

• Business activities: Reflecting cash inflows and cash outflows related to the production and business activities of the enterprise, such as collecting money from sales and providing services, spending money on purchases, paying salaries, paying rent,…
• Investment activities: Reflecting cash inflows and cash outflows related to the purchase, sale, liquidation of fixed assets, investment in subsidiaries,…
• Financial activities: Reflecting cash inflows and outflows related to borrowing, repaying debts, and issuing shares,…

Explanation of financial reportings

This is an item that is directly attached to the financial reportings, analyzing the data and information presented in the above 3 reports. The explanation of the financial reportings is a narrative of information according to accounting regulations and standards, which must be presented in an honest manner, showing the information and grounds for making the selected financial reportings and accounting policies,…

Report on business results

A statement of business results (also known as income statement, profit and loss statement) is a financial statement that reflects the situation and results of business operations of an enterprise in a specific accounting period. This report provides information on revenue, expenses, profit and loss of the business, helping managers, investors, and stakeholders assess the business situation of the business

Report changes in equity

The change in equity statement represents the change in equity in a given period in the most concise and specific way. Accordingly, equity can increase or decrease: Increase arising from the owner’s investment and net profit increase in the period, decrease due to the owner’s withdrawal of capital or from the net loss in the period

The report on changes in equity provides information about changes in the company’s equity during the period, thereby helping users of financial reportings to better understand the source of equity and the financial situation of the business

Purpose of financial reportings in Vietnam

According to Article 97, Circular 200/2014/TT-BTC, the objectives of financial reportings include:

• Providing information on the financial situation, business and cash flow of the enterprise, meeting the management requirements of business owners, State agencies as well as the useful needs of users in making economic decisions. Financial reportings must also provide information on assets, liabilities, equity, revenue, production and business expenses, profit and loss, and division of business results,…
• Provide other relevant information in the “Explanatory to the Financial Reportings” for the purpose of further explanation of the indicators reflected in the General Financial Reportings, the applied accounting policies to record arising economic operations, prepare and present the financial reportings.

Subjects of submission of financial reportings

When preparing financial reportings, accountants must clearly determine which accounting regime their business belongs to so that they can apply financial declaration accurately, avoiding possible errors

Pursuant to the provisions of current Vietnamese law, the accounting regime for micro-enterprises will be applied according to Circular 132/2018/TT-BTC or Circular 133/2016-TT-BTC; while the accounting regime for small and medium-sized enterprises will be applied according to Circular 133/2016/TT-BTC.

In which:

• Micro-sized enterprises are defined as enterprises that pay corporate income tax according to the method calculated on taxable income and the method according to the percentage method on the turnover from the sale of goods and services
• Small and medium-sized enterprises (including micro-enterprises) are identified as enterprises in all fields and all economic sectors in accordance with the law on support for small and medium-sized enterprises, except for State enterprises and enterprises owned by the State with more than 50% of charter capital. public companies in accordance with the law on securities, cooperatives and unions of cooperatives in accordance with the Law on Cooperatives.

Thus, the declaration and submission of financial reportings of enterprises must comply with the following provisions:

• Micro, small and medium-sized enterprises can apply to submit annual financial reportings according to Circular 133/2016-TT-BTC
• Particularly for large enterprises, the submission of annual financial reportings will be applied according to Circular 200/2014/TT-BTC

Benefits of using year-end financial reporting services

When using the periodic financial reporting service of Viet An Tax Agent, customers will obtain the following significant benefits:

• Effective cost savings: Significant savings in salary costs when hiring an accounting department
• Optimize Corporate Income Tax costs: Viet An Tax Agent will be responsible for advising businesses when preparing financial statements in the most favorable way
• Ensure timely submission of reports: Viet An Tax Agent will be responsible for ensuring the timely submission of financial statements and take responsibility for all data handled by Viet An
• Accuracy of book figures is guaranteed: With a team of experienced accountants, Viet An Tax Agent ensures that accounting data will be processed and presented correctly

Documents to be provided when using periodic financial reporting services in Vietnam

• Output and input VAT invoices used for tax declaration in the fiscal year
• Contracts and invoices for sale of goods and services
• Enterprise invoices that have been issued erroneously, canceled and withdrawn in the declaration period
• Contracts that have collected and paid but have not yet issued invoices or received invoices in the declaration period
• Documents of payment of charges, fees and other documents without VAT
• Salary table and ID card information of each person as a basis for PIT finalization
• Documents of social insurance payment for employees
• Bank account reportings for 12 months of the fiscal year
• The previous year’s balance sheet as a basis for declaring the balance at the beginning of the current year
• Loan and debt repayment documents arising in the declaration period
• Confirm year-end debts with suppliers and customers

Duties of Viet An Tax Agent when performing periodic financial reporting services

• Collect invoices and book vouchers from previous years (if necessary) from the enterprise
• Income from the circular applied when preparing financial reportings as well as the method of depreciation of fixed assets being implemented
• Review the submitted VAT returns, make additional and adjusted declarations (if any)
• Review the books and documents, classify what is a reasonable cost/unreasonable cost
• Preparation of CCDC allocation table, prepaid costs
• Check the cost of salary, salary on which social insurance premiums are paid and the number of employees participating in paying social insurance according to C12. Advising businesses on taxable and non-taxable allowances to optimize costs for businesses
• Accounting of outgoing invoices, inputs, and reviewing debts on separate accounting software
• Discuss with the enterprise about receivables, liabilities, interest expenses and related party transactions (if any)
• Responsible for accounting bank deposits in accordance with the bank’s sub-books
• Carry forward at the end of the period, as a basis for completing the financial reportings
• Print books and arrange documents to be transferred to the customer

If you have any difficulties or questions related to the periodic financial reporting service, please contact Viet An Tax Agent for the most specific advice.