The accounting process for newly established businesses is not just a mandatory procedure, but a crucial foundation for controlling costs, complying with the law, and optimizing taxes from the very first year of operation. In the context of continuously updated tax policies and electronic invoices in 2026, many startups that are not familiar with the regulations risk being subject to back taxes and penalties simply for implementing incorrect accounting practices from the outset. Based on current legal documents and practical experience advising newly established businesses, this article will provide detailed guidance on the accounting process for newly established businesses, helping startups operate legally, maintain financial transparency, and achieve sustainable growth.
Phase 1: Establishing the initial accounting foundation and tools
This is the first and most important step in the accounting process for a newly established business.
Digital signatures and electronic invoices
In the context of comprehensive digital transformation in tax management and administrative transactions, a proper understanding of the legal nature, usability, and role of digital signatures is a mandatory requirement when implementing accounting processes for newly established businesses. Specifically:
- Legal basis: According to Clause 6, Article 3 of the Law on Electronic Transactions 2023, a digital signature is an electronic signature that uses an asymmetric key algorithm to verify the identity of the signatory and ensure the integrity of the data message.
- Legal validity: Guidance in Decree 23/2025/ND-CP clearly stipulates that the digital signature of the legal representative or authorized person has the same legal validity as the seal and handwritten signature of the enterprise in civil, economic, and administrative transactions.
- Role: This is a mandatory tool for fulfilling electronic tax obligations, including signing tax returns, signing invoices, and conducting online social insurance and customs transactions.
Electronic invoices (e-invoices):
- Obligation to use: Based on Article 91 of the Tax Administration Law No. 38/2019/QH14, businesses selling goods or providing services must issue electronic invoices to buyers, regardless of the value of each sale of goods or provision of services.
- Registration process: According to Article 15 of Decree 123/2020/ND-CP, businesses register to use electronic invoices through an electronic invoice service provider by completing the Electronic Invoice Registration Declaration Form No. 01/DKT-HDDT. The tax authority will send a notification of acceptance or rejection within 01 working day from the date of receiving the declaration.
- Classification: Newly established businesses are typically subject to using electronic invoices with tax authority codes to ensure maximum transparency.
Note: For service industries (food and beverage, retail), the mandatory use of electronic invoices generated from cash registers, as stipulated in Circular 78/2021/TT-BTC, aims to control actual revenue and protect consumer rights.
Update your bank account information in your business registration details.
Although the 2014 Enterprise Law does not mandate that businesses open a bank account at the time of establishment, in reality, a bank account plays a crucial role throughout its operation. Owning a separate account facilitates payments, ensures transparency of cash flow, and meets the requirements for large-value transactions, especially payments of 20 million VND or more as stipulated by tax laws.
Businesses can contact any commercial bank to open their payment account (an account in the business's name). When opening an account, businesses need to bring the following documents:
- A certified copy of the Business Registration Certificate;
- Certified copies of documents proving the legal representative's status (e.g., appointment decision, company charter, etc.);
- A certified copy of the Decision appointing the Chief Accountant or the Decision appointing the Person in Charge of Accounting;
- Certified copies of the valid Citizen Identity Card, National Identity Card, or Passport of: the legal representative, the chief accountant, or the person in charge of accounting of the enterprise.
- A power of attorney is required if the account is not opened in person by the legal representative.
Within 10 days of opening the account, the enterprise must notify the Business Registration Department – Department of Planning and Investment where the enterprise's head office is located of its bank account information.
Notification can be made in one of two ways: by submitting it directly to the Business Registration Office or by submitting it online through the National Electronic Portal for Business Registration.dangkykinhdoanh.gov.vn).
Initial tax declaration and business license fees
Immediately after receiving the Business Registration Certificate, initial tax declaration and determination of business license fee obligations are mandatory steps to ensure the business operates in accordance with tax laws and to avoid penalties in the first year of establishment. Specifically:
- First-year fee exemption: According to Clause 1, Article 1 of Decree 22/2020/ND-CP amending and supplementing Decree 139/2016/ND-CP, newly established enterprises are exempt from business license fees in their first year of establishment (from January 1st to December 31st).
- Deadline for filing the declaration: According to Clause 1, Article 10 of Decree 126/2020/ND-CP, newly established taxpayers must file the business license fee declaration no later than January 30th of the year following their establishment or commencement of production and business activities.
After completing the initial legal and accounting framework setup, businesses need to move on to the equally crucial stage of selecting a suitable accounting system and establishing an accounting system from scratch. This ensures that financial recording, tracking, and reporting are carried out consistently and in accordance with legal regulations.
Phase 2: Choosing an accounting method and establishing a bookkeeping system.
Businesses must notify or adopt an appropriate accounting system from the very first accounting period. This choice directly affects the chart of accounts and financial statement formats.
- Circular 200/2014/TT-BTC: Applicable to all types of businesses. This is the most comprehensive accounting system, requiring detailed accounting of type 6 accounts (621, 622, 627) for cost calculation and mandating the preparation of a complete set of financial statements including 4 main forms. Large businesses or those with foreign direct investment (FDI) often prioritize this option to ensure international consistency.
- Circular 133/2016/TT-BTC: Specifically for small and medium-sized enterprises (SMEs) according to the standards in Law No. 04/2017/QH14 on Supporting Small and Medium-sized Enterprises. This system simplifies the process by eliminating intermediate cost aggregation accounts (using account 154 directly), and offers more flexible financial statement templates, suitable for the personnel capabilities of startups.
- Circular 99/2025/TT-BTC: This is the latest document guiding the application of digital accounting for innovative startups. This circular allows businesses to record transactions based on electronic transaction evidence extracted directly from the software system without necessarily printing traditional paper documents, and also updates new accounts related to intellectual property and risky investments.
Establishing a System of Documents and Accounting Ledger Formats
Based on Article 26 of the 2015 Accounting Law, enterprises have the right to choose the form of accounting books that suits their specific production and business characteristics and their level of technological application.
- Principles of Document Construction: According to Article 16 of the Accounting Law, accounting documents are the sole legal basis for recording transactions. For new businesses, it is essential to immediately establish a document flow process: from requesting payment, approval, creating vouchers (receipts, disbursements, inventory, and sales), signing and approval to recording transactions. From 2026 onwards, the digital transformation era encourages the use of electronic documents with digital signatures to ensure security and transparency.
Common types of notebooks:
- General Journal: The most common and easiest to implement in accounting software. All transactions are recorded in chronological order before being transferred to the General Ledger.
- Journal – Ledger: Suitable for very small businesses with few transactions, allowing you to track account changes directly on a single journal entry.
The accounting system must ensure continuity and must not be altered (if it is a paper ledger) or must have a record of edit history (if it is an electronic ledger) to facilitate tax audits and inspections by the Tax authorities, as stipulated in Article 27 of the 2015 Accounting Law.
Phase 3: Monthly and Quarterly Business Processes
After completing the legal framework and accounting system, businesses enter the phase of periodic accounting operations. This phase involves tax declaration obligations, labor management, and regular monitoring of business results, requiring accountants to follow the correct procedures and deadlines to minimize the risk of tax arrears and administrative penalties. Specifically, this phase includes the following:
Value Added Tax (VAT) Declaration
Filing Value Added Tax (VAT) returns is one of the key tax obligations in the accounting process of newly established businesses. It requires businesses to correctly determine the filing period, the tax calculation method, and fully comply with current regulations to avoid the risk of tax arrears and penalties. Specifically:
- Filing period: Newly established businesses file VAT returns quarterly as stipulated in Point a, Clause 1, Article 9 of Decree 126/2020/ND-CP. After 12 months of operation, the business may consider switching to monthly filing if revenue reaches the prescribed threshold.
- Calculation method: Choose either the deduction method (Article 10 of the Value Added Tax Law) or the direct method (Article 11 of the Value Added Tax Law).
See details: Instructions for filing VAT returns.
Personal Income Tax and Insurance
In addition to tax obligations to the State, newly established businesses need to pay special attention to taxes and mandatory obligations directly related to employees, including personal income tax and insurance contributions as stipulated by current regulations. Specifically:
- Registering tax identification numbers for employees: Based on Article 33 of the 2019 Tax Administration Law, businesses are responsible for registering tax identification numbers (TINs) for their employees.
- Insurance Contributions: According to the Social Insurance Law 2014 (and updated documents 2025), businesses make contributions to the following funds: Social Insurance (17.51 TP3T), Health Insurance (31 TP3T), and Unemployment Insurance (11 TP3T) based on the employee's insurance contribution salary.
Estimated Corporate Income Tax (CIT)
Provisional tax payment obligation: According to Clause 3, Article 1 of Decree 91/2022/ND-CP (amending Decree 126/2020/ND-CP), the total amount of provisional corporate income tax paid for four quarters must not be less than 80% of the corporate income tax payable according to the annual tax settlement. If underpaid, the enterprise must pay late payment penalties calculated on the underpaid amount.
Phase 4: Financial reporting and year-end tax settlement
Year-end financial reporting and tax settlements summarize all accounting and tax activities of a business during the fiscal year, and serve as the basis for tax authorities to assess the level of legal compliance. Understanding the deadlines, required documents, and reporting requirements will help businesses minimize the risk of tax arrears and penalties, and ensure financial transparency. Specifically, businesses should note the following:
Deadline for submitting settlement documents
Based on Point a, Clause 2, Article 44 of the 2019 Tax Administration Law, the deadline for submitting annual tax return documents is as follows:
- The deadline for filing annual tax returns is the last day of the third month following the end of the calendar year or fiscal year. (Usually March 31st).
Financial Statement File
Compliance with Vietnamese Accounting Standards (VAS) and the regulations in Article 29 of the 2015 Accounting Law is required, including: the Balance Sheet, Income Statement, Cash Flow Statement, and Notes to the Financial Statements.
Risks and Penalties for Administrative Violations
Accountants need to be familiar with Decree 125/2020/ND-CP regulating administrative penalties for violations related to taxes and invoices:
- Late filing of tax returns: Fines ranging from VND 2,000,000 to VND 25,000,000 depending on the length of the delay (Article 13).
- Capital contribution violations: Based on Article 47 of the 2020 Enterprise Law, members must contribute the full amount of capital and the correct type of assets as committed within 90 days from the date of issuance of the Business Registration Certificate. If the capital contribution is not fully contributed, the interest expense corresponding to the deficient capital contribution will be disallowed when calculating corporate income tax according to Circular 96/2015/TT-BTC.
Conclude
Establishing proper accounting procedures for newly established businesses from the outset not only helps startups fully comply with legal regulations but also creates a foundation for financial control, optimizes tax costs, and minimizes risks during future audits and settlements. In the context of constantly updated tax policies and accounting regulations, proactively reviewing and standardizing accounting records according to a set roadmap is a key factor in ensuring stable operation and sustainable business growth.
If you're in the startup phase and not yet confident in implementing a professional accounting and tax system, consulting with MAN – Master Accountant Network, with its team of highly specialized accounting and tax experts, will help you save time, costs, and avoid unnecessary mistakes. A properly designed accounting process from the very first year is a crucial step in preparing your business to raise capital, expand operations, and increase its reputation in the market.
Contact information MAN – Master Accountant Network
- Address: No. 19A, Street 43, Tan Thuan Ward, Ho Chi Minh City
- Mobile/Zalo: 0903 963 163 – 0903 428 622
- Email: man@man.net.vn
Content production by: Mr. Le Hoang Tuyen – Founder & CEO MAN – Master Accountant Network, Vietnamese CPA Auditor with over 30 years of experience in Accounting, Auditing and Financial Consulting.
Frequently Asked Questions (FAQ) about accounting procedures for newly established businesses
Is it mandatory for newly established businesses to hire an accountant right away?
Hiring an in-house accountant isn't mandatory from the start. However, businesses must still fulfill their tax filing obligations, maintain accounting records, and prepare financial reports as required by regulations. For small startups, using a full-service accounting firm is often the most cost-effective solution and reduces the risk of legal errors.
In the first year, before any revenue is generated, is it necessary to submit financial statements and tax returns?
Yes. Even without revenue, newly established businesses must still prepare and submit annual financial statements and corporate income tax returns (if applicable) on time. The lack of revenue does not mean they are exempt from reporting obligations.
Which VAT declaration method should newly established businesses choose?
Most startups should use the deduction method to claim input VAT deductions, especially when they have significant initial investment costs. The direct method is only suitable for small businesses with few input invoices or specialized operations.
Which startup expenses are most likely to be disallowed during corporate income tax settlement?
Expenses without legitimate invoices, cash payments exceeding the prescribed limit, expenses not related to production and business operations, or interest expenses corresponding to insufficient capital contributions as committed are all at risk of being disallowed during the final settlement.
What are the accounting and tax implications of failing to contribute the full registered capital on time?
This has a direct impact. If the capital contribution is not fully paid within 90 days, the business must adjust its charter capital, and the corresponding interest expense for the shortfall will not be deductible when calculating corporate income tax.
Other services
- Auditing: Auditing Services, Construction Auditing Services, Financial statement audit services
- Accounting and Taxation: Tax accounting services, Tax report, Transfer Pricing Advisory. Tax Accounting Services, Tax reporting services, Transfer Pricing Service, Affiliate Trading Service
- Legal aspects: Work permit services, Business registration certification services, Investment Certificate
- Other: Transfer Pricing Service, Affiliate Trading Service, Business Operations Consulting Services
MAN Editorial Board – Master Accountant Network
