According to Ms. Vu Thi Binh - Director of Binh Vu Enterprise Management Consulting and Training Co., Ltd., during her work process, she often encounters seven risks related to cash and bank deposits of businesses, especially small and medium-sized enterprises.
Virtual cash
Books record that businesses have a lot of cash, but in reality they do not have it or only have very little left.
This situation may stem from businesses recognizing that they have contributed capital in cash to match the registered charter capital. In addition, there are expenses that businesses have spent but not recorded in books due to lack of documents or sensitive expenses. There are even cases where dividends have been distributed but not recorded to avoid paying personal income tax.
Ms. Binh said that when businesses need to borrow from banks but still have a lot of money in the books, businesses may face the risk of not being recorded corresponding loan interest expenses.
Regarding the handling method, for virtual capital contribution, businesses can carry out procedures to reduce charter capital, then reduce the corresponding cash fund.
For the expenditures, she recommends that they still need to be recorded so that the amount on the books matches the reality. Any expenditure that does not meet the conditions for deduction when calculating corporate income tax should be removed when tax finalization, at target B4.
Cash is negative on the books
Ms. Binh explained that in reality, the fund cannot be negative because when money runs out, there is no money left to spend. However, this situation can still occur in the accounting books.
The reason is that businesses do not regularly track cash funds or business owners self-collect and spend, confusing personal money and business money. There are cases where business owners self-spend from personal accounts but cannot track the corresponding part in the accounting books.
The solution is to separate the director's personal account from the business account, and at the same time keep records continuously. When the fund is almost used up, if there is a loan or borrowing, it is necessary to prepare corresponding dossiers and documents; if contributing additional capital, procedures to increase charter capital are carried out.
Business owners use personal accounts to collect and spend
This is a situation Ms. Binh often encounters, especially in small and medium-sized enterprises.
Expenditures from personal accounts can lead to cash fund risks as in the above case. With revenues, there are cases where money from sales and service provision is transferred to personal accounts instead of company accounts.
Ms. Binh noted that if these revenues are kept outside the business books, when the tax authority checks the personal accounts of business owners, there may be risks of being considered for tax evasion.
She recommended separating personal accounts from company accounts and clarifying records and documents of revenues and expenditures.
Not taking full bank statements and supplementary books
Regarding cash and bank deposits, there are cases where accountants do not take full statements and bank sub-book. Lack of monitoring and comparison may cause the data in the books to deviate from the actual amount at the bank.
According to Ms. Binh, this is a technical accounting issue. The way to handle it is to collect complete statements, bank sub-book and periodically compare them.
The content of the money transfer transaction cannot be identified
For example, a sales business does not issue an invoice, but customers still transfer money to the company's account. Or there is a mistaken transfer transaction that the business cannot identify the transferor.
In reality, these amounts of money may be suspended in books, and the handling method has not been determined.
To limit this situation, Ms. Binh recommends issuing full invoices when selling goods and providing services, then comparing them with transferred money. Businesses also need to monitor bank account details to promptly handle unusual transactions.
Transfer money back and forth between company accounts and personal accounts, usually director's accounts
According to Ms. Binh, when the company lacks cash flow or when the business has surplus money, some small and medium-sized enterprises often transfer money back and forth between the director's account and the business account because they believe that it is still the business owner's money. However, it is necessary to distinguish between legal entities and individuals, separating the company account from the director's account.
Ms. Binh also mentioned the case of businesses making loans to directors at 0% interest. According to her, the tax authority has issued an official letter stating that borrowing money from directors at 0% interest is an abnormal transaction and the tax authority has the right to set taxes.
Therefore, when borrowing or borrowing, businesses need to complete dossiers and documents, ensure loan interest and contract terms in accordance with regulations. She also mentioned that when cash flow is in shortage, businesses need to carry out procedures to increase charter capital according to regulations.
Having a bank account but not reflected in the books
Ms. Binh said she has encountered this case in practice. The cause may be due to errors by the accountant or the enterprise proactively keeping the account out of books. Both cases make the data unclear and opaque. If intentionally kept out of books, the enterprise may also face legal risks.
