Thai accounting company – Introduction to Thailand’s accounting system

J&E Concierge Pattaya accounting company realized in this article a guide with the most important aspects of Thailand’s accounting. 

Accounting fundamentals are different from country to country. According to your business type, you have to select the most suitable country for it. When it comes to tourism, there are a lot of options for businesses you can develop. All you have to do is to find a country where tourism is truly extended. We already know which one. 

Thailand – a country of beautiful landscapes, welcoming citizens, and sunny beaches. Who would like to visit it? Millions of people travel there annually. So, if you have a business or you plan to register a company in one of the most profitable countries in the world, take action! This introduction to Thailand’s accounting is essential for you to read to know the country’s legislation regarding foreign businesses. 

Our article will guide you through the most important aspects of Thailand’s accounting and more.

To legally operate a business in Thailand, you must know the country’s legislation regarding accounting and not only that. This overview will help you to understand the most important aspects of Thailand’s accounting. For more information and help, do not hesitate to contact J & E Concierge Pattaya. We are a specialized firm offering services for accounting and company registration in Pattaya, Thailand. 

The most important thing you need to know about accounting is that it must be done by every financial structure that operates inside the country. Of course, some entities make exceptions due to their special type of functioning.

Let’s remember which are the 7 business forms existing in Thailand:

1. Partnership – a common agreement between two parties to run the same business;
2. Limited company – a private Thai company based on shareholders, directors, and promoters;
3. Joint venture – a collaboration between two or more parties, that shares both losses and profits of a business;
   
4. Representative office – an affiliated company to a head office;
5. Branch offices – a foreign business structure that operates services in Thailand as a branch;
   
6. International headquarters – a company registered in Thailand that provides special services to associated branches;
7. Regional office – a unit that is responsible for selling to insurance companies. 

 Accounting for a company in Thailand consists of financial records about a company’s financial situation. All registered companies that operate inside the country must follow the accounting requirements and prepare them annually or even more often.

 The period in which a business must prepare its financial records is known as the tax year. The accounting period usually lasts 12 months and ends on 31 December.  Exceptions from this rule are the companies that are newly incorporated or have changed their accounting system. Their accounting period may be less than 12 months.

The companies registered in Thailand can choose monthly bookkeeping or annual bookkeeping. Every company has the right to change the accounting period during the fiscal year. To do so, they must file a request to the Director General of the Revenue Department, and then wait for the approval. 

All that matters is that every company should respect the Thai Accounting Standards of the Institute of Certified Accountants and Auditors of Thailand regarding accountings. The financial records must be as correct as possible and reflect a real image of the company’s expenses and assets. 

Documents needed for financial accounting of a company in Thailand

Accounting and bookkeeping represent vital parts of all Thai companies. There is a list of documents, records, and statements required that must be prepared and presented by the end of every fiscal year. This list consists of the following: 

Accounting journal

This is a record of all the financial transactions of a business. It must be prepared in compliance with the Thailand Accounting Act and Revenue Code and contains all of the monthly transactions proceeded by the company. Generally, to create it, you have to record detailed information about the financial transactions from invoices, purchase orders, receipts, cash register tapes, and other sources. In this way, you can identify the financial transactions that affect your business, pay more attention to your finances, and use debits and credits to record the changes in the general journal.

Statement of accounts

This represents a document that reflects all transactions proceeded between your business and each customer. They are also submitted to the customers to provide them with a recapitulation of the products and services they owe money for. Foreign companies must submit their financial statements to the Ministry of Commerce within 150 days of the accounting period’s end. Then, it must be audited by a certified person.

 Records of payment and receipts

 The payment annual report represents a balance sheet of payments. It is used to record the total amount a given company owes to others. Together with the receipts, they are important parts of the documents required every tax year.

Read more: Special business tax in Thailand

Profit and loss statements

These documents refer to the financial statements that present the revenues, costs, and expenses of every fiscal year. Each of them provides information about the company’s progress or inability to generate profit.

Balance sheets

The balance sheet represents an overview of assets and liabilities, of the profit and loss accounts. This is an important document in accounting for a company in Thailand, that must carefully be prepared at the end of the fiscal year. It also could be requested periodically. Together with other documents, it must be kept at least 5 years afterward.

Records of electronic funds transfer

If your company has effectuated an electronic transfer of money from one bank account to another, it must be registered and presented in documents every time.

Bank statements, including cheque records 

Also known as account statements, bank statements represent documents sent by the bank to the holder monthly. It summarizes all the transactions effectuated within every month. These records in accounting for a company in Thailand, consist of a detailed list of deposits and withdrawals.

Internal or external audit reports

These reports represent audit examinations that result in certifications of the financial statements of an entity. Annual financial statements are written records that ensure the company’s accuracy regarding taxes, financing, and investing purposes. In other words, they present all the business activities and the performance of a company. All these documents need to be written in the Thai language so they can be audited by professional accountants.

They include statements of financial position, profit and loss statements, and cash flow statements.

The financial statement also includes supplementary information about the accountings such as criteria for the preparation of the financial statements, description of the accounting policies, additional information on the balance sheet, income statement, cash flow, and statements of changes in equity.

There is also a set of rules that must be followed when preparing financial documentation. The bookkeeping requirements must be drafted according to the Thai Accounting Standards.

Read more: Thailand accounting company in Pattaya

Accounting of a company is an essential element for businesses in Thailand. It is very crucial to have the financial statements and documents organized and correct. This process may be complicated and stressful mostly if you are not a Thai native speaker and the Thai legislation regarding accounting is not common for you. To ensure everything is done correctly and fast, you better consult a certified accounting company to take care of your financial records.

We are J & E Concierge Pattaya – an accounting company, an experienced team of accountants committed to providing professional services and solutions for foreign investors who intend to open a business in Thailand. We offer company registration in Pattaya and accounting services for businesses operating in Thailand. If you are one of the foreign companies that need help with accounting in Pattaya and Thailand, we are here to help you. We will prepare and submit the required annual documentation, so you won’t have to stress about any complications in your way.

As you can see, accounting for a company in Thailand consists of plenty of complex and time-consuming processes. From monthly bookkeeping to balance sheets and to annual audits, there are a lot of documents you have to take care of, a lot of legalities, and forms to fill. But, thankfully, our qualified team has a wide experience with it. J&E Concierge Pattaya Accounting Company offers monthly accounting services, tax and financial planning, and more.

Therefore, your accounting will stay organized all the time. We are fluent English and Thai speakers both written and spoken, and will inform you about everything you need to know about accounting in Pattaya and Thailand.