The first year is for building the system, not for fixing things afterwards
In most businesses we are brought in to put right, the problem did not start with an intention to do anything wrong. It started in the first year, when everyone was busy finding customers and the accounts were postponed again and again. By the time the financial statements were due, all that was left was a pile of incomplete documents and figures nobody could explain.
The single most useful fact is this: a company's accounting duties begin on the day it is registered, not on the day the first income arrives. Once you understand that, the order of the remaining tasks becomes much clearer.
This guide is written for business owners who have just registered a company, or are about to, and want to know what the first year will involve.
This guide is general information about the accounting duties of Thai juristic persons. It is not an accounting or tax opinion for any particular business, and it does not state rates or numerical thresholds, because those details are updated from time to time and should be confirmed with your bookkeeper or adviser on the date you actually act.
Three duties that run side by side
New business owners often think of "doing the accounts" as one job. In fact it is three separate matters, handled by different people and on different timetables.
One — keeping the books. This means recording every transaction that actually happens, completely and correctly. It is monthly work and the foundation of everything that follows. If this layer is incomplete, there is nothing for the layers above it to work with.
Two — filing periodic returns. There are monthly and annual cycles, depending on which obligations the business has: whether it is registered for VAT, whether it withholds tax, and whether it has employees. The important point is that these cycles keep running even in a month with no transactions.
Three — closing the annual financial statements and the audit. At the end of the accounting year, the financial statements must be prepared, examined by a licensed auditor who gives an opinion, and then submitted by the deadline.
The three are linked in a chain. A month's work left incomplete becomes financial statements that cannot be closed, and financial statements that cannot be closed become a late filing.
Who may do what, and why they must be different people
This is what confuses new business owners most, and it is not an area in which to economise.
The bookkeeper prepares the business's accounts and financial statements and must have the qualifications the law sets. A juristic person must have a bookkeeper, however small the business is.
The licensed auditor examines the financial statements that have been prepared and gives an opinion on them.
By law these two roles must be held by different people. The reason is straightforward: if the same person both prepares and checks, they are checking their own work, and the auditor's opinion means nothing.
When choosing an accounting firm, the questions to ask are who will be the bookkeeper and who the auditor is, not only the monthly price.
Four things to do in the first month
Most of the first year is decided in the first month, and all four of these can be done at once, without waiting for income.
1. Separate company money from personal money
Open a bank account in the company's name and use it only for the company's receipts and payments. If you have a card for spending, keep that separate too.
It sounds minor but it matters most. Once money from two pockets is mixed, proving which transactions belong to the company becomes guesswork, and it cannot realistically be done after the fact. A business that separates from day one and a business that separates at year-end take many times longer to close the financial statements.
2. Tell suppliers to issue documents in the company's name
Once registered, the company is a juristic person separate from its owner, so the documents supporting its expenses must be issued in the company's name, with complete details.
In practice, first-year owners often keep buying as they did when they were an individual and end up with receipts in their own name for the whole year. The result is that many real expenses cannot be used as fully as they should. The fix is to tell regular suppliers from the beginning, not to chase corrections later.
3. Set up a way of keeping documents that you will actually follow
It does not need to be complicated. What you need is a fixed place for incoming and outgoing documents, and a regular schedule for sending them to the bookkeeper.
The method that always fails is "keep everything and send it all at once at the end of the year", because documents get lost along the way and, when it is time to close the financial statements, nobody remembers what each item was.
4. Put the whole year's filing calendar where everyone can see it
Ask the bookkeeper to list which returns your business has to file, on which cycle and in which month, and keep the list in the same place your team can see.
This is an hour's work that prevents a year of problems, especially for businesses with irregular income, which often assume that a quiet month means nothing needs to be done.
The mistakes first-year businesses make most often
Assuming no income means no filing
This is the most expensive misunderstanding. A company that has not yet started operating still has to keep accounts, close its financial statements and submit them by the deadline. These are known as nil financial statements, and leaving them undone because "we haven't done anything yet" is the most common cause of penalties among newly registered companies.
Taking company money out without documents
Many owners still think company money is their own money, which in law it is not. Withdrawing money without supporting documents creates a balance in the accounts that has to be explained later, and it is the point that gets questioned in an examination.
There are proper ways, such as paying a director's salary or another documented arrangement, but they must be set up correctly from the start, not arranged after a whole year of withdrawals.
Choosing an accounting firm on monthly price alone
The cheapest price usually means only recording the documents that are sent in, with nobody pointing out what is missing or looks unusual. For a first-year business that does not yet know what it does not know, the saving in fees is usually far smaller than the penalties or the cost of fixing things later.
The questions to ask are: who is the bookkeeper, who is the auditor, which cycle are documents sent on, and will anyone raise it if documents are missing.
Not checking what your own duties are
Each business's duties differ. They depend on whether it is registered for VAT, whether it has employees, whether it makes payments that require withholding tax, and what type of business it runs. Assuming "we'll do what other companies do" is the source of both doing too much and doing too little.
When you realise a past year was not done
This happens more often than you might think, and it is not something that cannot be fixed.
What to do is deal with it as soon as you know, not wait until next year, because each missed period has to be fixed separately and the longer it is left, the more complicated and expensive it becomes.
Start by gathering the documents you have, such as bank statements, receipts and payment records, and contracts. Then ask the bookkeeper to assess which periods are missing and what must be done, in what order. Incomplete documents are normal in cases like this and work can continue with them; they are not a reason to postpone any further.
Short summary
- Accounting duties begin on the day of registration, not the day income starts.
- The bookkeeper and the auditor are separate roles and must be different people.
- A year with no income still requires closing and submitting the financial statements.
- What an owner can do that helps most is to separate company money from personal money and have documents issued in the company's name.
- Filing cycles keep running even in a month with no transactions.
- If you know which period was missed, deal with it as soon as you know.
If you are about to register a company, or have registered but are unsure what you need to do, talk to our accounting team to set up the system from the start instead of fixing things afterwards.
