What would you expect from your Accountant?
The stories that are reported to us by our Friends and Clients are also the most unfortunate. If you have ever met a friend whose company lives long enough to reach the first tax inspection, you know what we are talking about here.
This industry is an easy place to grab money from unexperienced Clients. Most of companies, at least at first, are always looking for the cheapest service available believing in some kind of magic. This is where trouble starts. Most of the unregistered accountants in Vietnam run a worry-free activity which is called being “your accountant” but in the facts, the job only consist in handing over the required-by-law declaration(s) and report to the Government but rarely caring about what is inside those.
We call this non-value-added accounting, and you do not need an accountant for that job! That accountant, sometimes a private person, will perform as if everything was “great” until the first tax inspection comes.
At that moment, companies must pay the price for penalties, fines and malpractice, our approach of accounting at PCA Company Services is quite different and combines accounting, taxation, legal and audit altogether.
Here are the reasons:
1/ They do not know how to do. They usually are junior accountants and do not really know what they are doing. Bookkeeping are most often wrong; accounting procedures and the famous Vietnamese GAAP for Generally Accepted Accounting Principles are unknown because of how this industry works. It is easy to fool around everyone especially the business owners who are new in the game.
2/ In accounting, the report of today will greatly depend on the report of yesterday meaning that if something was not done properly in 2016, that error will be carried forward until today. There is no way to fix the accounting unless you redo everything. Accountants do not like that because they like to earn fast money, remember?
3/ In Vietnam, it is common practice because Vietnamese business owners manages their accounting like that. They agree on malpractice and wrongly accounted expenses for instance because they will look for the settlement with the tax. That strategy is adopted by many business owners in here. The company has great turnover but is losing enormous amounts of money. When the tax inspections come, they will calculate everything that is wrong, and the settlement will be somewhere between 1/2 and 2/3 of the proposed fine given by the inspectors. Those amounts can of course vary.
4/ They have no idea what compliance is and how important it is in the Vietnamese system. Compliance is too often put aside but it is truly the heart of any businesses. It has to be managed by professionals together with the company management and with the accountants and tax advisors. Did you know that you VAT invoices had to go with a proper offer, contract, acceptance/liquidations minutes to be receivable by the tax department? Most of accountants nowadays do not even know what the rules are to redact the description/narrative on a VAT invoice. Please feel free to ask yours and compare his/her reply to our article. Choosing the easiest way is often the best way for those individuals at the detriment of the business owners who do not see anything until the end.
5/ They are afraid to be reported to the tax authorities.
6/ They do not want to be responsible, return their fees and compensate for their malpractice. Often the liability built up for years amounts to tens of thousands of USD.
As a result, there is a 100% chance they will not pick up your phone calls anymore and totally stop all forms of communication with you. Your beloved ex-accountant has run away leaving everything behind.
Not all the accountants are like that, fortunately. Usually, accountants of larger enterprises are much more serious and take responsibility for their actions, but business owners cannot afford those higher-level accountants.
What we offer at PCA Company Services is accountability and responsibility on a silver platter at a fraction of the cost of internalizing those services. The choice is logical, it is economical, and it is safe.
Vietnam is not your typical Western country when it comes to accounting and legal: a lot of laws and practices are subject to interpretation. If you wish to be successful at the most efficient pace, using the least resources, you will have to partner with people who are on the field and deliver genuine solutions that will be accepted. Most of lawyers do not know the reality of businesses and fabulate a lot, about a lot of things to charge the extra fees. Often, they only rely on their title but not so much on their knowledge and understanding.
At PCA Company Services, we believe in combining practices, our attorneys for instance have deep accounting knowledge and our accountants and CPAs always work with our legal advisors to confirm their knowledge and receive another pertinent point of view. That is the reason why our Consultants are so knowledgeable. How would do otherwise? An effective piece of advice requires pragmatism and multi-dimensional analysis that most single discipline service provider just cannot produce. At PCA Company, we will always go for the right and long-term option, not the quick fix. So that we will be and remain accountable and responsible for everything we say, everything we write and everything we do!
Be logical, everything you read above is just made of common sense!
The PCA team.