What is internal accounting and what does an internal accountant do?
Internal accounting refers to managing accounting and tax functions within the company through in-house staff. An internal accountant handles daily bookkeeping, invoices, payroll, tax declarations, and financial reporting in compliance with Vietnam Accounting Standards and tax regulations. They also prepare management reports to support budgeting and business decisions.
However, Vietnam’s strict and frequently changing compliance requirements, including e-invoicing and IFRS adoption, make internal accounting resource-intensive and high-risk if not properly managed. As a result, many foreign companies compare internal accounting with an outsource accounting service to reduce compliance risk and improve efficiency.
Getting internal accounting right is critical in Vietnam due to strict accounting and tax regulations. Companies must maintain books in Vietnamese, follow VAS, apply the standard chart of accounts, and meet tight tax filing deadlines. Errors such as late filings or incorrect revenue reporting can lead to penalties, rejected tax deductions, or even licensing risks.
This challenge has intensified with mandatory e-invoicing and the gradual adoption of IFRS from 2025, requiring accountants to stay constantly updated on both local and international standards. Without strong expertise and ongoing support, internal accounting can become a significant compliance burden for FDI companies.
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In-house vs. outsourced accounting: key factors to consider
Foreign companies in Vietnam often face the decision of whether to build an internal accounting team or use an outsource accounting service. Each option has advantages, but the right choice depends on cost, risk, expertise, and business scale.
Cost efficiency is usually the first concern. Maintaining an internal accounting team involves fixed salaries, social insurance, benefits, training, accounting software, and office overhead. These costs add up quickly, especially if multiple roles are required. By contrast, an outsource accounting service allows companies to pay a predictable service fee that is typically far lower than the total cost of running an in-house team, while still receiving professional support.
Staffing and continuity also differ significantly. Internal accounting requires recruiting, training, and retaining qualified staff in a competitive labor market. Turnover or extended absences can disrupt compliance work and increase risk. Outsourcing removes this burden. The service provider ensures continuity by assigning trained accountants and replacing staff when needed, without interruption to reporting or filings.
Accountability and risk management is another key distinction. With in-house accounting, the company bears full responsibility for errors, late filings, or compliance breaches. An outsource accounting service, when properly structured, shifts part of this responsibility to the service provider. Reputable firms commit to compliance, handle dealings with tax authorities, and correct issues if they arise, reducing audit exposure and compliance risk for foreign investors.
Expertise and professionalism further favor outsourcing. Internal teams may require ongoing training to keep up with Vietnam Accounting Standards, tax updates, e-invoicing rules, and IFRS alignment. Outsourced providers specialize in these areas and bring experience from working with multiple FDI clients across industries. This depth of expertise is difficult and costly to replicate internally unless the company is very large.
In practice, large multinational companies with sufficient scale and strong internal controls may choose to maintain in-house accounting, often supplemented by external advisors. However, for small and medium-sized FDI companies, startups, or newly established entities, using an outsource accounting service is usually the more practical and cost-effective solution. It allows businesses to stay compliant, reduce risk, and focus internal resources on core operations rather than regulatory administration.
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What services do outsourced accounting firms provide?
When a foreign company uses an outsource accounting service in Vietnam, the provider typically delivers end-to-end accounting and compliance support in line with local regulations.
First, outsourced firms handle bookkeeping and financial records, including recording daily transactions, managing invoices and vouchers, and maintaining accounting books in compliance with Vietnam Accounting Standards (VAS) and the standard chart of accounts. All records are properly organized and retained for tax inspections and audits.
Second, they manage tax filings and statutory compliance, such as VAT, Corporate Income Tax (CIT), Personal Income Tax (PIT), and other required declarations. The provider calculates tax liabilities, submits filings on time, and handles year-end tax finalization, helping foreign companies avoid late filings and calculation errors.
Third, outsourced accountants prepare financial statements and management reports, including balance sheets, profit and loss statements, cash flow reports, and statutory financial statements under VAS. Many providers also offer customized reports or IFRS-aligned figures for group reporting purposes.
In addition, outsourcing firms act as a liaison with authorities. They communicate with tax offices during inspections, support audits, and often provide a nominee Chief Accountant, fulfilling Vietnam’s legal requirement without the need to hire a full-time senior accountant.
Most firms also offer bilingual support, preparing English versions of financial reports and explaining accounting and tax matters clearly to foreign management, while ensuring official records remain compliant in Vietnamese.
Finally, a good outsource accounting service provides ongoing advisory support, keeping clients informed of regulatory changes, compliance deadlines, and tax considerations, and offering practical guidance to reduce risk and improve financial management.
Overall, outsourced accounting firms function as an external accounting department, allowing foreign companies in Vietnam to stay compliant, control costs, and focus on core business operations.
Benefits of outsourcing accounting for foreign-invested companies
Many FDI companies in Vietnam choose an outsource accounting service because it offers efficiency, cost control, and stronger compliance, especially for small and mid-sized enterprises.
Save time and reduce costs.
Outsourcing eliminates fixed costs such as salaries, insurance, training, and accounting infrastructure. Instead, companies pay a predictable service fee while accessing a full professional team. In practice, many foreign businesses reduce accounting costs by 35–50% through outsourcing, while freeing management from day-to-day bookkeeping and tax supervision. This allows leaders to focus on core business growth rather than back-office administration.
Fast and accurate workflows.
Professional accounting firms operate with standardized processes, modern software, and internal review controls. Transactions are recorded promptly, reports are prepared on time, and tax filings are submitted accurately. This reduces errors, avoids last-minute compliance risks, and ensures reliable financial data for management decisions.
Ensure compliance and minimize risk.
Vietnam’s accounting and tax regulations are complex and frequently updated. An outsource accounting service continuously monitors legal changes, such as e-invoicing requirements and IFRS alignment, and adjusts processes accordingly. This proactive approach significantly lowers the risk of penalties, rejected deductions, or audit issues. If authorities raise questions, the service provider supports explanations and resolution, giving foreign investors greater peace of mind.
Overall, outsourcing accounting helps FDI companies operate more efficiently, control costs, and stay compliant without building a full internal finance team.
Common risks when using an outsourced accounting service
Despite the benefits, risks can arise if the provider lacks capability or local expertise.
Non-compliance due to outdated knowledge.
If the provider does not stay current with Vietnam’s regulations, filings may be incorrect or incomplete, exposing the company to penalties.
Errors in tax calculation or reporting.
Weak internal controls can lead to miscalculations, underpaid taxes, or inaccurate financial statements, increasing audit and compliance risk.
Communication and language issues.
Poor communication or lack of bilingual support can leave foreign management unclear about financial performance or compliance status.
These risks highlight one key point: the success of outsourcing depends heavily on choosing a qualified, reputable accounting partner with strong local expertise, clear communication, and robust review processes.
Tips for effectively using outsourced accounting services
Outsourcing accounting can deliver strong results if it is managed properly. The following tips help foreign companies get the most value from an outsource accounting service while avoiding common issues.
Define the scope of work clearly.
Before starting, clearly agree on which tasks the service provider will handle, such as bookkeeping, tax filings, payroll, financial statements, and representation during tax inspections. A detailed scope of work avoids misunderstandings and ensures no compliance tasks are overlooked.
Clarify filing responsibilities and digital access.
Vietnam’s tax and invoicing system relies on electronic filings and digital signatures. Decide in advance whether the service provider will submit filings on your behalf or only prepare documents for internal submission. Responsibilities for managing the digital signature and e-tax accounts should be clearly stated to prevent missed deadlines or control issues.
Request regular reports and updates.
Agree on a reporting schedule, such as monthly or quarterly financial and tax summaries. Regular reports help management monitor performance, identify issues early, and stay informed about tax positions. Consistent communication also strengthens transparency and trust.
Ensure bilingual support and clear communication.
For foreign investors, English reporting is essential. While official submissions are in Vietnamese, request English translations of financial statements, tax reports, and official notices. Make sure you have English-speaking contacts at the firm to ensure smooth communication and full visibility over your company’s finances.
By setting clear expectations and maintaining open communication, foreign companies can build a reliable partnership with their outsourced accounting provider and ensure long-term compliance and efficiency.
Choosing a reputable accounting service provider in Vietnam
Selecting the right provider is critical when using an outsource accounting service in Vietnam. While many firms offer accounting and tax support, service quality, compliance capability, and reliability vary significantly. A poor choice can expose FDI companies to compliance risks, penalties, and operational disruption.
Check licensing and professional credentials.
Accounting services are regulated in Vietnam. Always ensure the provider is properly licensed by the Ministry of Finance and employs qualified professionals such as certified accountants or chief accountants. Working with a licensed firm confirms that the provider is legally authorized and accountable.
Prioritize experience with FDI companies.
Choose a provider with a proven track record serving foreign-invested enterprises. Firms experienced with FDI clients understand common challenges such as VAS compliance, tax inspections, bilingual reporting, and parent-company requirements. References, case studies, or long-standing market presence are strong indicators of reliability.
Assess service scope and technical capability.
A reputable outsource accounting service should offer end-to-end support, including bookkeeping, tax filings, financial statements, nominee Chief Accountant services, and audit coordination. Providers with modern accounting systems, e-invoicing setup experience, and familiarity with Vietnam’s e-tax portals can ensure smoother onboarding and ongoing compliance.
Evaluate communication, transparency, and pricing.
Clear communication and bilingual support are essential for foreign investors. The provider should explain issues clearly, respond promptly, and provide regular updates. Fee structures should be transparent, with no hidden costs. Extremely low pricing is often a warning sign, as a single compliance error can cost far more than any short-term savings.
Taking the time to evaluate providers carefully will significantly improve the success of outsourcing. The right partner does more than process numbers. They safeguard compliance, reduce risk, and support informed decision-making.
How InCorp Vietnam can help with outsourced accounting
Choosing the right outsource accounting service provider is one of the most important decisions for FDI companies in Vietnam. InCorp Vietnam accounting services offer comprehensive support designed specifically for foreign-invested businesses navigating the country’s regulatory environment. As part of the InCorp Group, a leading corporate services firm with a strong regional presence and a long track record of assisting international clients, InCorp Vietnam helps clients manage their accounting and compliance obligations efficiently and reliably. InCorp Vietnam+1
InCorp Vietnam’s team handles the full spectrum of accounting tasks, from setting up your accounting system and e-invoice/e-tax portal registrations to daily bookkeeping, statutory reporting, and tax filings. They ensure that your books are maintained in compliance with Vietnamese Accounting Standards (VAS) and local tax regulations, helping you avoid penalties and compliance risks that can arise from incorrect or late filings.
In addition to routine accounting, InCorp provides value-added services such as nominee Chief Accountant provision, VAT and CIT compliance, and year-end financial statement preparation, all tailored to the needs of foreign companies. Their bilingual team communicates in English and Vietnamese, offering translated reports, clear explanations, and regular updates so that foreign management always understands the company’s financial position without language barriers.
Beyond accounting operations, InCorp Vietnam also delivers tax advisory and compliance services, helping clients stay ahead of regulatory changes, optimize their tax positions, and handle interactions with tax authorities smoothly. This strategic guidance empowers FDI firms to focus on core business growth while leaving complex financial and tax responsibilities to trusted experts.
With a strong reputation for transparent service, a broad suite of accounting and tax offerings, and experience supporting thousands of clients across Asia-Pacific, InCorp Vietnam can be a reliable partner for FDI companies looking to outsource their accounting with confidence.
