Tax Obligations Review and Accounting Standardization

HQ Furniture Company 'HQ,' established in 2017 in District 2, Ho Chi Minh City, specializes in providing domestic and office furniture products for the Ho Chi Minh City market and provinces in the Southeast region. After more than 6 years of establishment and development, the company has fortified its position in the Southeast market, attaining an annual revenue exceeding 100 billion VND.

Despite HQ being operational for over 6 years, the accounting and tax system remains incomplete. Furthermore, the company's internal accounting experiences frequent changes. This has raised significant concerns among the Board of Directors (BOD) regarding the accounting process and the company's tax compliance in the recent past.

The BOD acknowledges the necessity of conducting an examination and review of tax obligations to standardize the accounting and tax system, preparing for the company's future business strategy

TPM's solutions

In response to the concerns raised by the Company's Board of Directors, TPM has initiated analytical procedures to identify key challenges the company is encountering. Specifically:

1. Although the company has fulfilled its declaration and tax payment obligations, there are gaps in the execution, with some errors and a lack of thorough documentation.

2. Inconsistent accounting for tracking product codes has led to errors in determining tax obligations during the calculation of the cost of goods sold, impacting sales operations.

3. Numerous enterprise expenses have not been accurately recorded, lacking proper documentation, making the enterprise vulnerable to expense elimination, tax recovery, and fines.

Comprehending the enterprise's challenges, TPM conducted a comprehensive review of accounting-tax documentation and internal accounting processes. This involved reevaluating the reasonableness and validity of incurred expenses, providing advice on adjustments, and supplementing documentation in accordance with regulations. Additionally, TPM advised the enterprise on standardizing inventory management processes—particularly critical for trading enterprises—across personnel and operational activities

RESULTS

Following the advice and recommendations provided after TPM's review, the business has adjusted and perfected its tax reports and accounting records in compliance with regulations. This minimizes the risk of future backbilling and tax penalties, ensuring the enterprise's financial matters and business operations proceed according to plan and smoothly.

Additionally, the company has taken proactive steps in inventory management, contributing to an enhancement in the efficiency of its business operations.

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