Why Vietnam is Increasingly Focusing on Digital Accounting

Digital accounting is predicted to save lots of companies money and time, contributing to larger effectivity for each companies and authorities companies. In gentle of this, Vietnam is more and more specializing in digital accounting because it strives to digitalize its middle-income financial system and entice revenue-generating FDI.

The COVID-19 pandemic has accelerated the shift towards digitalization for a lot of companies not solely in Vietnam however globally. It highlights the significance of expertise and digital transformation to the survival and evolution of companies of all sectors. Of that, additional growth in digital accounting will play a job in modernizing the enterprise setting in Vietnam, which in flip will assist generate income and entice overseas traders.

What’s digital accounting?

Digital accounting refers back to the creation, illustration, and switch of monetary info into an digital format. As a substitute of utilizing a bodily paper and pen, all accounting transactions are carried out electronically.

Digital accounting is carried out on digital accounting programs. Primarily, digital accounting programs permit customers to sync their enterprise financial institution accounts, transactions, and bank cards with the related software program.

The system then syncs all these and transactions circulate into the accounting software program the place they’re separated into completely different classes and accounts. As soon as a enterprise syncs its financial institution accounts and bank cards with the suitable accounting software program, monetary transactions begin to present in a queue and are categorized into numerous classes.

Utilizing such digital accounting programs, an organization can save time and run a monetary report to match prices and income, assessment profitability, verify financial institution and mortgage balances, in addition to predict tax liabilities.

Elementary features {that a} digital accounting system can present embody:

• Invoicing;
• Accounts payable;
• Financial institution and bank card syncing;
• Accounts receivable;
• On-line fee assortment from clients;
• Monetary stories era; and
• Person entry for tax professionals.

Regardless of widespread issues, digital accounting enhances accountants slightly than changing them. By enhancing expertise, digital accounting frees accountants from repetitive duties like compiling, managing, and categorizing information whereas permitting accountants to deal with extra strategic duties permitting for higher determination making.

Totally different approaches to a digital accounting system

A digital accounting system could be achieved via built-in software program options arrange by the corporate itself or via the software program as a service (SAAS) strategy, or via different cloud-based system approaches. Nevertheless, no matter strategy is used, there’ll at all times be versatile platforms out there, which offer digital accounting options at no cost or with upfront charges. 

Digital accounting in Vietnam

Digital accounting has regularly develop into a norm in Vietnam, the place many companies, monetary establishments, and family companies have tried to implement digital accounting into their accounting course of. Nevertheless, there’s nonetheless room for growth and standardization.

The Vietnamese authorities just lately authorized the Nationwide Digital Transformation Program by 2025, with an orientation towards 2030. The initiative will assist speed up digital transformation via adjustments in consciousness, enterprise methods, and incentives towards the digitalization of companies, administration, and manufacturing actions.

This indicators a big effort made by the Vietnamese authorities to convey authorities, enterprise house owners, monetary establishments, and expertise specialists to leverage the potential of digital innovation as a complete, which will even present a big alternative for the nation to enhance and higher implement digital accounting.

Instruments utilized in digital accounting

Cloud expertise

Cloud expertise is what units digital accounting from different standard accounting approaches. Centralizing information administration offered by means of cloud expertise makes it simpler to seize, entry, share and analyze information. Apart from, information are processed in seconds and enterprise house owners may also entry this information to make enterprise selections

AI expertise

Equally, by changing uncooked information into extra manageable codecs and figuring out connections between disparate information sources, synthetic intelligence (AI) can play a supporting function by making information extra digestible and understandable for accountants.

Accountants, for instance, can collaborate with their colleagues from different enterprise models to leverage monetary information to be able to drive innovation, construct provide chains and develop enterprise plans that promote higher progress and productiveness for the companies.

Others

Digital, augmented, and combined actuality applied sciences in addition to blockchain are amongst applied sciences that even have highly effective accounting potential. These could be augmented into digital accounting programs to create provide chain optimization and higher information comprehension.

Vietnam is transferring into e-invoices

One side of digital accounting that Vietnam is transferring into is e-invoices. This yr, an inventory of latest laws and directions are made concurrently by the federal government regarding the use and implementation of e-invoices for enterprises and cooperatives throughout the nation. E-invoices might be obligatory in Vietnam from July 2022.

Significantly, the Ministry of Finance (MoF) issued Round 78/2021/TT-BTC (Round 78) guiding the implementation of e-invoices together with Decree 123.

As a follow-up to Round 78, Vietnam additionally issued Official Dispatch No. 4144 which discusses bill kind numbers, image numbers, serial numbers, and guidances for correction of the issued e-invoices.

The most recent growth displays the federal government’s transfer to reform tax administration and overhaul the casual financial system. E-invoices is not going to solely save time and prices, however will even scale back the executive burden and assist in account reconciliation, minimizing billing frauds, and sustaining transparency.

The advantages that digital accounting has to supply for enterprise house owners when in comparison with standard accounting, could be mentioned in three principal areas: accuracy, accessibility, and higher integration.

Accuracy

When in comparison with the normal, guide system, by which columns needed to be added up, numbers needed to be moved from one web page to the following, and trial stability needed to be manually compiled, computerized programs have dramatically elevated calculation accuracy.

For standard accounting, ought to errors happen, many hours must be spent trying to find and proper them. This difficulty could be resolved utilizing accounting software program.

Final however not least, when counting on an outdated system, the danger of dropping information is considerably excessive. If necessary paperwork are broken or destroyed, the work could should be recreated. Copies of the unique work are attainable however they’re more likely to be expensive and time-consuming.

Accessibility

One other main profit of a digital accounting system is that it supplies you with real-time entry to your organization’s monetary information. Which means that professionals wouldn’t have to be on the workplace or carry their laptops to entry important info.

With cloud-based options, digital accounting software program packages permit staff to log in to the system from wherever and at any time to trace outcomes and information. 

That is notably useful for money circulate administration, funding selections, and tax legal responsibility monitoring particularly after the pandemic as companies lean in direction of a extra hybrid work model.

Higher integration and syncing

One of many largest challenges related to guide accounting programs is poor compatibility with different instruments used within the enterprise. The perfect digital accounting options provide flexibility by way of integration with different enterprise instruments corresponding to the purpose of sale system, payroll, web site order achievement, and extra.

The price of these integrations is commonly zero or negligible. These functions comprise ecosystems of a whole lot of enterprise functions that allow information sharing freely.

Nevertheless, not all accounting software program presents excessive flexibility by way of integrations and two-way information syncing. It’s, subsequently, necessary that enterprise house owners do their due diligence and study their accounting system rigorously earlier than absolutely implementing it into their enterprise ecosystems.