It is a question that comes to us very often. We will do our best to answer it below.
1/ Job description
Before comparing prices, one should compare the job description. In our field, it is easy to get lured by the promise of a bargain. Most accountants in Vietnam will only “report” what is provided to them. This is probably the main illness of accounting in Vietnam. The job of a tax accountant is not to blindly report and encode what is provided but instead, questions must be asked for each invoice that he or she handles. What is the difference will you say? Well, if you report blindly expenses without asking the questions of deductibility, you will face severe consequences at the first tax inspection. Most of your expenses that you thought would decrease your tax basis will actually be for many reasons (compliance, procedural and/or supporting documents) rejected and you will find yourself paying penalties and late interest due to unpaid Company Income Tax. For instance, is cross-checking bank accounts transactions, and cash transactions with issued invoices something that is in the job description? We understand that tax accounting may not be your cup of tea, so why not choosing a partner that will bring you safety and will allow you to focus on your craft?
2/ Anticipating problems
Preparing a solid accounting has many benefits apart from the peace of mind. It will considerably lower the audit fee at the end of the year as well . If the audit company knows or realized that your accounting has been prepared by non-professionals. The fee for audit and the fee for compliance after audit will be considerably higher. We have seen, several times in the past, companies that could not find a reputable audit firm to sign off their accounts because of their unclear accounting. The audit season (from January to March each year) for PCA is always a relaxed season. The job has been done during the year leaving very little compliance work for the annual report and the financial statements. When the auditors come to our company to audit our Clients’ books, all goes well without issues. It not only peace of mind for our Clients but as well for us. It is all about mitigating long term risks and maximizing our value.
3/ Responsibility issue
The responsibility of the business manager(s)/director(s) towards the shareholders:
It is the duty of the person in charge to look for the best ratio risk/rewards. In terms of accounting it means mitigating exposure and long term risks by choosing the most appropriate party to provide the right service at the right price.
The responsibility of the shareholders towards potential investors:
As a shareholder maintaining proper accounts by reliable service provider will be a key element in case of an exit. Potential buyers will require a due diligence before injecting cash in your business. If your accounting and compliance are not properly prepared, there is great chance to kill the deal or get your share price heavily discounted.
The responsibility of the accountant: it is null. Employees or free-lancers can’t be sued for professional wrongdoing. Even if they can be, what compensation can they provide? Most of the Clients who come to us are required by the Tax authorities to remake their accountant from the beginning as the accounting of this year depends on the accounting of the previous year. Being obliged to “redo” the accounting twice (and therefore pay twice) is common in the industry. Recently, it has been reported that high turnover issues within Human Resources have also become a huge problem in accounting departments of companies, especially startups.
The responsibility of PCA as service provider:
It is total. We work and talk by experience. Theory is mixed with hundreds cases of practice and hundreds years of combined experience. We know things because we do them not only because we learnt them at school. We will be liable with what we say and what do for many years to come. Our cross-industry expertise makes us become an asset to many of our Clients. Working with a company properly registered, whose accountants are properly recognized is always a plus. Our liability and professional insurance policy will cover any wrongdoing and malpractice ensuring a smooth and safe accounting and compliance journey throughout the year. We will be around to face our responsibilities.
As a conclusion, please be cautious when comparing and choosing for a service provider especially for a field difficult to apprehend as accounting and taxation. The factors above and many others that we choose not share here (communication gap, professionalism, lack of degrees and certifications, etc.) motivate more and more companies and entrepreneurs to outsource their tax accounting leaving in their companies only internal bookkeepers.
At the end of the day, you always pay for what you get.
Be well! (and talk to us if all of this make sense to you)