Accounting support when a business enters the market: our practical experience.

When a new enterprise enters the market, it seems that you can ignore the accounting service - they say that the volumes are not large, I can handle it myself. This is the biggest misconception. 

It is important to select competent specialists at the very start of your business, who will help and guide, advice and monitor the correct and timely submission of documents. In addition, the legislation is changing, and the forms and procedures for the submission of documents are changing as well. All this must be constantly monitored to ensure proper accounting of business.

Today we will talk about what accounting support usually consists of when a business enters the market and what it’s worth considering in the process.

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What accounting-related questions most often arise at the start of a business?

At the start of the business, one may face a lot of questions, including: 

  • What taxation system to choose?
  • Will all market participants be able to sell their goods/services?
  • What documents do I have to register when starting a business? 
  • Which permits do I need? 
  • Where should I apply and what are the time limits?
  • In what form should reports be kept and submitted? 

This is just the tip of the iceberg and a small part of the questions that we hear from our Clients. Needless to say about the cases, when all permissions and certificates have been obtained, but deadlines for submitting reports and paying taxes have been missed. Here, you are charged with the first fines.

Let’s talk about the case from our practice. We were contacted by a sole proprietor, who by that time had already registered and paid the initial taxes. The sole proprietor made some pauses in its business activity, during which he simply forgot to pay taxes, as well as submit reports. Due to late payment of taxes and submission of reports, he was removed from the single tax group, and knew nothing about this. Accordingly, the sole proprietor had to pay another amounts of taxes and submit completely different reports.  

When he asked us for accounting support, the situation was deplorable. We helped to make correcting reports, letters for accepting taxes, calculate taxes correctly and define fines. Did you know that if you personally impose the fines, they are significantly lower than those of the inspection bodies? 

This case demonstrates the importance of continuous accounting and development of the initial strategy of your business.

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Obtaining the required documents

Once you have decided on your market entry strategy, you will need to obtain permit documents. Of course, all documentation will depend on the type of your business and strategy. 

Here are some examples of what an accountant can advise you on. We give only some examples, because it is impossible to elaborate on the nuances of all business models within one material. If you have any questions or would like to get information concerning your business scheme, don’t hesitate to contact us.

For example, you are a retailer and you plan to work with a cash payments. In most cases, you will need to register a cash register. The algorithm for working with it, regardless of whether you have a hardware or software-based cash register, is as follows: 

  • It must be duly registered; 
  • You must conclude an agreement for the maintenance of hardware-based cash register; 
  • You shall submit an application to the tax office for the cash register registration; 
  • You must obtain a certificate of reservation of the cash register number, and on the basis of this certificate, introduce it with fiscal memory and seal the device; 
  • After the launch of the cash register, you must submit daily and monthly cash register “internal” reports to the tax authorities.

If you want to trade in excisable goods, you must take into account the mandatory minimum prices and submit monthly reports.

Registration of employees. It applies to anyone who is going to hire employees. You should keep in mind the mandatory submission of your employment report. It shall be filed before the employee starts working.

Accounting policy. This is also a quite broad issue concerning most  business activities. It is important to correctly create an order on accounting policy, to establish a structure for accounting of income and expenditures. You must correctly allocate the costs to form the net cost of goods/services, because in addition to direct costs, there are also fixed costs (rent, salary, etc.).

Tax optimization of foreign business in Ukraine. It is, in fact, a whole separate block of questions and frequently arising problems, which require more than one material to be properly scrutinized. In general, non-residents usually use the accounting outsource services in order to understand all the nuances of registration of documents and services necessary to start a business. 

It is necessary to choose correctly the form of the foreign representative office, register current accounts in the bank, get the necessary electronic keys.  Besides, it is necessary to decide on the type of taxation schemes that non-resident can apply for and learn about the legal restrictions.

You should study these and other nuances before starting your business.

We will help you understand all the peculiarities of your activity, the specifics of the business and choose the best accounting support.

If you want to provide your business with quality accounting and direct personal forces to the development of your business, don’t hesitate to call us.

Publication date: 27/04/2020

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