When you set up a business, you need to keep a record of all the transactions which are done during the course of the business. As time passes, your company would grow and as would the intricacy of managing the revenue and the expenses of the company. Not paying proper attention to the accounting and bookkeeping function may have some alarming results for the company.
With the recent changes in the government of Myanmar and the focus of the government on bringing in more companies to set up and conduct business in the country, there has been an increase in the inflow of numerous companies in Myanmar. With the increasing number of companies, the need for better and accurate accounting and bookkeeping has also increased.
Let’s understand the current scenario of Myanmar and then know the advantages of having precise accounting and bookkeeping services in the country.
The Present Scenario
In recent years, Myanmar has gone through various significant changes, some good some bad, which have affected the economy of the country. There has been a change of government from a military government to a democratically elected government, initiation of a liberalization process in the year 2010, etc. The increased liberalization has led to an increase in the inflow of companies being set up in the country.
The world bank predicts that the economy of the country will grow at a rate of 7.1% per year for the next three years, and the state continues on a growing trend. This increase in the standard of living and the globalization of the country is the reason because of which the businesses and the government are bringing in foreign counterparts which will invest in the various firms in the country or are looking to get listed in the overseas exchange.
Moreover, the much-awaited Myanmar Companies Law 2017 (MCL) was also passed, which came into effect from 1 August 2018. The MCL was initiated with the aim of amending the present business environment of Myanmar. It takes a step further in changing the company registration process in Myanmar and making it more accessible. The MCL also has brought a new electronic platform for company registration called MyCO – Myanmar Companies Online.
As the various industries such as manufacturing, hospitality etc. continue to grow, there is a growth in the need for accounting and bookkeeping services. The increasing inflow of the international companies to the country brings with it the requirement of meeting and maintaining global benchmarks in accounting and bookkeeping.
Myanmar Financial Reporting Standards (MFRS)
The Myanmar Financial Reporting Standards (MFRS) are reporting standards which the companies of the country must follow while reporting the financial accounting data. In 2010, Myanmar Accounting Council (MAC) delivered 29 Myanmar Accounting Standard (MAS) and eight MFRS. The international investors need to be mindful of these MFRS as these closely resemble the internationally known IFRS but are very different in other ways. While preparing the accounts, the investor should keep in mind the various differences between the IFRS and the MFRS.
Benefits of Accounting and Bookkeeping Services
The requirement of Accounting and Bookkeeping Services has dramatically increased in Myanmar as the services provide many benefits to the company. Some of the various advantages which accounting and bookkeeping will provide are given below:
1.Preparing a Budget
Preparation of a budget is one of the most important jobs which has to be done by the management of the company. Forming a budget will help to set priorities of the company and allot resources and funds according to it. Budget planning will also help in preparing for any unplanned event which happens suddenly.
Accounting and Bookkeeping, if done correctly, will not only record and analyse the books of accounts of the company but will also search and provide a remedy in case any mistake or flaw has been found which has occurred previously. The services will also offer security that such errors are not made in the future.
3.Clear Financial Picture
Knowing about the financial health of the company is an essential job of management as well as the shareholder of the company. Preparing the three primary and crucial books of accounts, namely the P/L Account, the ledger and Balance Sheet, will allow both the management and the shareholder to understand the accurate financial picture of the company. It will also enable the management to amend further or modify it to get better results.
4.Well Thought Decision
The process of bookkeeping will gather all the required data, which will then put into an understandable format. This report, when analysed, will help bot the management and the various stakeholders of the company to take decisions which would be beneficial for them in the long run.
In the present time, all the companies take the saying “Time is Money” very seriously. The bookkeeping and accounting services will gather all the required data at a single place, which will significantly reduce the time in analysing the data and making decisions. If a company is not flexible enough, there are chances that the company may not be able to sustain in the competitive business environment.
Due to the various benefits of accounting and bookkeeping services, it is recommended that every company must avail these services. The intricacies in the accounting and bookkeeping of a company will increase with time and then the need for these services. So, when setting up a business in Myanmar, you should always take assistance form to affirm, which will provide all the accounting and bookkeeping solutions of the company.
Business Setup Worldwide is one such firm which can handle the complete accounting and bookkeeping requirement of the company. BSW also provides various other services such as Taxation services and VISA related services. To understand more details about the multiple services offered, do contact us, we would be happy to help.