Online Financial Statement Submission Tool

August 20, 2024

25min read

Financial statements are not just documents submitted to banks; they are important reflections of a company’s financial health and management capabilities. With the rapid development and internationalization of Vietnam’s economy, this article aims to provide companies with a comprehensive, in-depth guide, detailing every aspect of financial statement submission, revealing potential challenges, and offering professional solutions.

By deeply understanding and mastering the financial statement submission process, companies can not only meet compliance requirements but also transform this process into an opportunity to improve financial management and optimize business operations. High-quality financial statements can enhance a company’s competitiveness in banks and markets. Moreover, in the Vietnamese market, quality financial reporting practices are also an important foundation for companies to cooperate with international partners and participate in global supply chains.

This article will delve into various aspects of financial statement submission, from data collection and report preparation to final review and feedback handling. Each step will provide in-depth analysis and practical advice. We will share real cases and best practices from the Vietnamese market to help companies identify common pitfalls, improve report quality, and take initiative in communicating with banks.

Whether you’re a financial novice or an experienced CFO, this article will provide you with new perspectives and practical tools to help you reach new heights in financial reporting in Vietnam. Let’s begin our journey into the world of financial reporting experience and explore how to transform financial statements from a routine task into a true driver of business value.

In-depth Analysis of the Financial Statement Submission Process

Preparation Stage: Building a Comprehensive Data Foundation

The quality of financial statements directly stems from the accuracy and precision of their underlying data. In Vietnam, where companies often face complex business environments and changing market conditions, establishing a reliable data collection and processing system becomes particularly important. We delve into how to build such a system in Vietnam’s business environment.

Comprehensive Data Collection: More Than Just a Simple Number Summary

In Vietnam, especially for companies involving multiple business departments or cross-border operations, comprehensive data collection is far more than just a number summary. It requires a sophisticated design and systematic approach to ensure that each data point is accurately captured and correctly understood.

Firstly, establish cross-departmental collaboration mechanisms. In Vietnamese corporate culture, communication between departments may sometimes be limited by organizational structures or traditional behaviors. To overcome this challenge, we recommend implementing the following strategies:

Build a Unified Data Language: In Vietnam’s multilingual environment (Vietnamese, English, and sometimes other languages), ensuring all departments use unified terms and definitions is crucial. Create an enterprise-level data dictionary that clearly defines each metric and business term. For example, the word “revenue” might be understood differently in sales and finance departments. By unifying definitions, data errors due to misunderstandings can be avoided.

Design Customized Data Collection Templates: Considering the potential differences in technical levels among Vietnamese enterprises, designing data collection templates with built-in validation functions is crucial. These templates should:

Use bilingual labels in Vietnamese and English to ensure all employees accurately understand the meaning of each field.
Include automatic calculation and cross-checking functions to reduce human errors.
Set data input range limits to prevent obvious input errors.
Add notes and guidance instructions to explain how to correctly fill in complex fields.

Establish Regular Data Exchange Mechanisms: In Vietnam, due to traditional organizational structures, information flow between departments may sometimes be insufficient. Therefore, we recommend:

Establish a “data ambassador” system, where each department designates a responsible person as the direct contact point with the finance department.

Establish weekly or monthly cross-departmental data synchronization meetings to allow direct dialogue between departments and resolve data discrepancies.

Use collaboration tools (such as Slack or Microsoft Teams) to create dedicated data communication channels, promoting real-time collaboration.

Q1: How to fully utilize ERP systems in Vietnam?

A1: Many enterprises are transitioning from traditional manual bookkeeping to digital systems. In this process, correctly configuring and using ERP systems becomes crucial:

Localization Configuration: Ensure the ERP system adapts to Vietnam’s specific requirements, including: Support for special requirements of Vietnamese Accounting Standards (VAS), such as specific account settings and report formats. Adapt to Vietnam’s tax system, such as automatic calculation and reporting of Value Added Tax (VAT). Support multi-currency processing, especially conversion between Vietnamese Dong (VND) and major foreign currencies like US Dollar (USD).
Integrate External Data Sources: In Vietnam’s complex business environment, relying solely on internally generated data may not provide comprehensive financial statements. Consider integrating the ERP system with the following external data sources: First, bank systems for automatic bank reconciliation. Second, customs data systems, which are crucial for enterprises engaged in import and export businesses. Third, electronic invoice systems to stay synchronized with the Vietnamese tax authority’s system.
Real-time Monitoring and Alerting: Configure the ERP system to provide real-time monitoring and alerting functions, such as: Set up monitoring dashboards for key performance indicators (KPIs) like gross profit margin, accounts receivable turnover, etc. Establish anomaly detection mechanisms that automatically issue alerts when certain indicators exceed preset ranges. Create automatic generation and distribution of periodic reports to ensure management can obtain the latest financial status in a timely manner.

Q2: Why establish a data verification process? What needs attention?

A2: Establishing a data verification process is the last line of defense in ensuring data accuracy. In Vietnam, due to potential language barriers and cultural differences, this step requires special care:

A2.1 Multi-level Verification Mechanism:

Internal departmental verification: Conducted by the responsible department to ensure data integrity and consistency.
Cross-departmental verification: Finance department conducts cross-verification with other business departments. For example, sales data is compared with sales reports from the marketing department.
External verification: Conduct regular reconciliations with customers and suppliers, especially for large or long-term accounts.

A2.2 Use Data Visualization Tools: Utilize tools like Tableau or Power BI to transform complex financial data into insightful charts and dashboards. This not only helps identify anomalies but also aids in presenting and explaining data to those without a finance background.

A2.3 Establish a Discrepancy Analysis Process: When data discrepancies are found, initiate a standardized discrepancy analysis process:

Determine the nature of the discrepancy (whether it’s a calculation error or understanding bias).
Trace the source of the discrepancy (at which stage the error occurred).
Evaluate the impact of the discrepancy (the overall impact on financial statements).
Develop corrective measures (short-term corrections and long-term prevention).

By implementing these in-depth, comprehensive data collection and verification strategies, Vietnamese enterprises can significantly improve the quality and reliability of their financial data. This not only lays a solid foundation for preparing high-quality financial statements but also provides more accurate decision-making support for enterprises, gaining advantages in the competitive Vietnamese market.

Choosing Appropriate Report Templates: Adapting to Vietnam’s Regulatory Environment

In Vietnam’s complex and changing regulatory environment, choosing the correct financial statement template is not only a compliance need but also an important way to demonstrate corporate professionalism. The State Bank of Vietnam and the Ministry of Finance frequently update reporting requirements to adapt to international standards and local economic development needs. Therefore, enterprises need to establish a flexible and responsive system to track and adapt to these changes.

Establish a Regulatory Change Tracking Mechanism: Designate specific personnel responsible for regularly checking the official websites of the State Bank of Vietnam and the Ministry of Finance, focusing on the latest regulatory updates and notices. Subscribe to professional legal and accounting advisory services, such as updates provided by KPMG or PwC’s Vietnam branches, to ensure timely access to professional interpretations of regulatory changes. Participate in industry associations and professional forums, such as activities of the Vietnam Association of Accountants (VAA), to understand how peers are responding to new requirements.

Choose Suitable Templates Based on Enterprise Characteristics: Vietnam’s reporting requirements may vary depending on the nature, size, and industry of the enterprise. Here are some key considerations:

Enterprise Size: Large enterprises typically provide more reports, including detailed schedules and extensive notes. Small enterprises may be eligible for simplified report templates, but need to be aware that they may need to transition to more complex reporting systems as the enterprise grows.
Ownership Nature: Foreign-invested enterprises (FDI) need to use specific report templates that usually contain additional foreign exchange-related information and cross-border transaction details. State-owned enterprises may require additional reports to reflect their public responsibilities and use of state assets.
Industry-Specific Requirements: Banks and financial institutions use templates specifically designed by the State Bank of Vietnam, which include specific risk assessment indicators. Insurance companies need to provide special reports reflecting their actuarial calculations and risk reserves. Listed companies, in addition to meeting bank requirements, need to comply with disclosure standards set by the State Securities Commission.

Balance Between International Standards and Local Requirements: As Vietnam’s economy internationalizes, many enterprises, especially subsidiaries of multinational corporations, face the challenge of needing to meet both International Financial Reporting Standards (IFRS) and Vietnamese Accounting Standards (VAS) requirements.

Establish a dual-track reporting system, using software systems capable of generating reports compliant with both IFRS and VAS. Create reconciliation tables detailing the differences between IFRS and VAS reports, explaining the reasons for these differences. Ensure the finance team is trained to be familiar with both IFRS and VAS, capable of explaining the differences between the two standard reports.

Localization and Customization of Templates: Even when using standard templates, enterprises need to customize to some extent based on their specific situations:

Add supplementary detailed schedules: For example, enterprises operating in multiple provinces may need to analyze revenue and costs by region.
Adjust account settings: Ensure account settings comply with regulatory requirements while reflecting the enterprise’s specific business model.
Add management-required information: Within the limits of regulatory requirements, additional information helpful for management decision-making can be included in the reports.

Version Control and Transition Process: Establish strict template version control and transition processes to ensure always using the latest and approved templates: Use a document management system, marking each template with version numbers and effective dates. Establish an approval process for template updates, ensuring any changes go through appropriate review and authorization. Conduct regular (e.g., quarterly) template reviews to ensure ongoing compliance with the latest regulatory requirements and enterprise needs.

Q3: Why use report templates? What are their advantages?

A3: Through this systematic and well-thought-out approach to selecting and managing report templates, Vietnamese enterprises can ensure their financial reporting not only complies with regulatory requirements but also accurately reflects the company’s financial position and operating results. This approach not only ensures compliance but also enhances the transparency and credibility of financial reporting. In Vietnam’s extremely complex business environment, such high-quality financial reporting can become an important competitive advantage for enterprises, helping to:

Establish good relationships with regulatory authorities, reducing unnecessary scrutiny and inquiries.
Enhance confidence of investors and financial institutions, potentially lowering financing costs or attracting more investment.
Provide management with more accurate and comprehensive financial information, supporting better decision-making.
Demonstrate professionalism and transparency when cooperating with international partners, promoting more business relationships.
Lay a solid financial management foundation for the enterprise’s long-term sustainable development.

Through this comprehensive and meticulous approach, Vietnamese enterprises can not only meet current reporting requirements but also prepare for future growth and internationalization, maintaining resilience in the rapidly changing global economy.

Precise Filling of Reports: Demonstrating Professionalism in Details

In Vietnam’s complex business and regulatory environment, accurately filling out financial statements is not just a technical requirement but a direct reflection of the enterprise’s financial management level. Let’s delve into how to demonstrate professionalism and insight in this process.

Unified Accounting Policies: As enterprises may face both local and international business, maintaining consistency in accounting policies is crucial. An accounting manual can be established, covering all important accounting treatment methods in detail. In this manual:

Clearly state how each policy complies with Vietnamese Accounting Standards (VAS) requirements.
Provide practical cases illustrating how to apply these policies in daily business operations.
Regularly update to reflect the latest changes in VAS and developments in enterprise business.

Also, organize regular training for the finance team and other relevant departments to ensure everyone understands and consistently applies these policies. Pay special attention to training new employees to ensure they quickly grasp the company’s accounting practices. Conduct a quarterly accounting policy consistency review to check whether various departments and subsidiaries correctly understand and apply unified accounting policies. If inconsistencies are found, take immediate corrective measures and strengthen relevant training.

Precise Handling of Currency Conversion: Due to significant fluctuations in the exchange rate between Vietnamese Dong (VND) and other currencies, accurate currency conversion is crucial. It is recommended to clearly specify the use of exchange rates (such as rates published by the State Bank of Vietnam, commercial bank rates, etc.), and in which situations to use them. Conduct sensitivity analysis for major foreign currency transactions, assessing the potential impact of exchange rate fluctuations on financial statements. Disclose these analysis results in the notes to the statements, demonstrating the company’s active management of exchange rate risks. Try to use financial systems that can automatically update exchange rates to reduce human errors. At the same time, establish manual review mechanisms to ensure the accuracy of exchange rates used by the system.

Provide Explanatory Notes: Due to strict regulatory requirements, detailed notes to the statements are not only a compliance need but also an opportunity to demonstrate the enterprise’s transparency and management capabilities to banks and other stakeholders.

Create a comprehensive note template: Design a comprehensive note template ensuring all necessary information is included. This template can include: summary of accounting policies, detailed explanations of significant accounting estimates and judgments, detailed analysis of major financial statement items, full disclosure of related party transactions, explanations of contingencies and subsequent events, etc.
Narrative analysis: In addition to providing numbers and explanations, include management’s analysis and opinions on significant fluctuations. For example, if sales revenue has increased significantly, not only explain the numerical growth but also analyze the driving factors of the growth change, market conditions, etc.
Industry comparison: In some special industry situations, provide comparative analysis with industry averages. This not only helps banks understand the company’s market position but also demonstrates a deep understanding of industry dynamics.
While not violating confidentiality principles, provide an outlook on future business development. This can include information on known significant contracts, planned expansions or new product lines, etc., demonstrating the company’s growth potential.

Accuracy and Rigorous Checking: In the final stage of filling out reports, comprehensive accuracy and consistency checks need to be conducted.

Cross-checking: Ensure data consistency between various financial statements. For example, the ending cash balance in the balance sheet should be consistent with the ending cash balance in the cash flow statement.
Mathematical accuracy: Use automated tools to check the accuracy of all calculations, especially those involving percentages and ratios.
Logical consistency: Check whether the logical relationships in the reports are reasonable. For example, whether the accounts receivable turnover days match the company’s credit policy.
Historical comparison: Compare current period data with historical data, any significant fluctuations should have reasonable explanations.
Budget comparison: Compare actual results with budget, analyze variances and provide explanations in the notes.

Through this guided and comprehensive approach to filling out financial statements, Vietnamese enterprises can not only ensure the accuracy and compliance of their reports but also demonstrate their financial management professionalism and transparency through rich information disclosure. This not only wins the trust of banks but can also provide valuable insights for potential investors and business partners.

Comprehensive Internal Review: Ensuring Financial Statement Quality

A comprehensive and rigorous internal review process is key to ensuring the quality of financial statements. This is not only to meet regulatory requirements but also an important way to improve the overall financial management level of the enterprise. So how to establish a multi-layered, efficient internal review system?

Establish a Multi-layer Review Process

First stage: Require report preparers to conduct preliminary self-checks using standardized self-check lists; cultivate a “ownership” mindset, making preparers responsible for the quality of their work.

Second stage: Arrange for another peer-level finance person to conduct an independent check. Adopt the “four-eyes principle” to reduce personal bias and oversight.

Third stage: Have experienced senior financial managers conduct a comprehensive review, focusing on key judgment areas and accounting treatments for significant transactions.

Fourth stage: Final approval by CFO or Financial Director, ensuring overall quality and consistency of the report, assessing whether the report accurately reflects the company’s financial position and operating results.

Develop a Comprehensive Audit Checklist

Create a detailed review checklist listing all key check points. This checklist can be based on:

Risk assessment: Identify high-risk areas, such as complex accounting estimates, significant judgment matters.
Internal compliance requirements: Ensure compliance with VAS, tax laws, and other relevant regulations.
Internal consistency checks: Ensure data consistency across various reports.
Industry-specific check points: Set specific check items based on the characteristics of the company’s industry.

For example, the checklist might include: revenue recognition, whether it complies with VAS 14 requirements; inventory valuation, whether the calculation of inventory impairment provisions is reasonable; whether related party transactions are fully disclosed and fairly priced; whether foreign exchange gains and losses are correctly handled and reported in the statements; whether tax treatments consider the latest tax policy changes, etc.

Implement Analytical Procedures

In addition to regular numerical checks, conduct in-depth analytical procedures:

Industry benchmarking: Compare with industry standards or major competitors.
Trend analysis: Compare data across multiple accounting periods to identify anomalies.
Ratio analysis: Calculate and analyze key financial ratios, such as liquidity ratios, asset turnover ratios, etc.
Budget vs. Actual: Compare actual results with budgets, analyzing significant variances.

Q4: The review process seems cumbersome. Are there any tools that can be utilized?

A4: With the advancement of digital transformation, more and more enterprises in Vietnam are starting to adopt advanced technological tools to improve audit efficiency:

Software like ACL or IDEA can be used for big data analysis to identify anomalous transactions.
Develop or purchase software that can automatically execute standard audit procedures.
Use collaboration tools like SharePoint for real-time tracking of the audit process and document sharing.

Q5: Is it necessary to establish a continuous improvement mechanism for internal audits? How should it be optimized?

A5: Internal audits should not be a static process, but should be continuously optimized:

Hold debriefing meetings after each significant audit to discuss findings and areas for improvement.
Regularly update audit checklists and procedures based on regulatory changes, business developments, and past experiences.
Organize regular training sessions to share best practices and common pitfalls identified during audits.

By implementing such a comprehensive and dynamic internal audit system, Vietnamese enterprises can significantly improve the quality and reliability of their financial statements. This not only meets regulatory requirements but also provides a more reliable basis for management decisions while enhancing trust relationships with external stakeholders such as banks and investors.

Submission Stage: Ensuring Material Accuracy

After completing comprehensive preparation and internal review, we enter the crucial stage of report submission. Uploading financial materials requires meticulous management and attention to detail. Below, we will discuss in detail how to improve accuracy and efficiency at this stage.

System Preparation and Account Management

In Vietnam, with the advancement of digitalization, most banks have adopted online submission systems. However, due to infrastructure and network environment limitations, ensuring system stability and security has become imperative.

Account Management Considerations: If supported by the bank’s system, enable multi-factor authentication, which is particularly important in Vietnam due to increasing cybersecurity threats. Regularly update passwords; passwords should contain at least 12 characters, including uppercase and lowercase letters, numbers, and special symbols. Implement strict access control policies; only authorized personnel should be able to access the bank submission system. Establish detailed access logs, recording each login and operation.

Other Considerations: Browser Compatibility: Many Vietnamese banks’ systems have specific browser requirements. It’s recommended to maintain multiple versions of different browsers to meet the specific needs of different bank systems.

Network System Testing: Considering the unstable network conditions in some areas of Vietnam, use backup network connections. It’s advisable to test system access in advance before each reporting period begins.

Hardware Requirements: Ensure using computer equipment that meets the bank system requirements. Regularly maintain and update equipment to prevent submission failures due to hardware issues.

Choosing the Correct Report Type and Cycle

Given the complex regulatory environment in Vietnam, choosing the correct report type and submission cycle is crucial. This helps avoid unnecessary errors that could lead to compliance issues and regulatory scrutiny.

Understanding Cycles and Types:

Monthly Reports: Usually include basic balance sheets and income statements.
Quarterly Reports: In addition to basic financial statements, may require cash flow statements and specific financial ratio analyses.
Annual Reports: The most comprehensive reports, usually requiring detailed financial statements, management discussion and analysis, audit reports, etc.

Special Industry Requirements: For example: Foreign-invested enterprises (FDI) may need to provide additional foreign exchange flow reports; listed companies need to comply with additional disclosure requirements from the Securities Commission; specific industries (such as banking, insurance) may have industry-specific reporting requirements.

File Upload Considerations

In the context of Vietnam’s digital transformation, file uploading has become increasingly critical. However, due to limitations in network infrastructure and special requirements of system facilities, this seemingly simple step actually requires careful planning and execution.

File Format and Size Control:

Format Requirements: Most Vietnamese banks require financial statements to be uploaded in PDF format. Some banks may also accept Excel or specific template formats. It’s advisable to create a “format requirements checklist” for each bank, ensuring to check the latest requirements before each upload.
Size Limitations: Vietnamese bank systems usually have strict limitations on the size of uploaded files, typically between 10-20MB. If a report exceeds the size limit, consider splitting large files into multiple files. Ensure each file has a clear title and page numbers for easy understanding by bank reviewers.

Standardized File Naming: In Vietnam’s multilingual environment, unified file naming is extremely important.

Establish standard naming conventions: For example, “CompanyName_ReportType_Date_Version.pdf”, translated as: “ACME_Inc_Income_Statement_2024Q1_v1.pdf”.
Use bilingual naming in English and Vietnamese: Consider including Vietnamese translations in file names to facilitate identification by local reviewers. Example: ACME_Inc_Income_Statement_2024Q1_v1_Bao_Cao_Thu_Nhap.pdf
Version Control: If multiple submissions are required, ensure version numbers are included in file names and keep records of all versions.

Security Considerations During Upload: Use secure connections, ensuring the bank’s upload system uses HTTPS protocol. If an insecure connection is detected, immediately contact the bank’s IT support.

Data Encryption: Consider encrypting sensitive financial data before uploading. Communicate with the bank to ensure they have the ability to decrypt and view the files. Upload Confirmation: Request the system to generate upload confirmation receipts after each upload as proof of submission. Save these receipts as submission evidence.

Post-Submission Verification: If the bank system allows, immediately download the file after uploading and perform an opening test to ensure the file is not corrupted. Randomly select a few pages for content verification to ensure the uploaded file is completely consistent with the original file. Ensure all text and numbers remain clear after uploading, especially small font footnotes and notes.

Audit Focus Points: Enterprise Response Measures

In Vietnam’s regulatory environment, the financial statement audit process is often rigorous. Enterprises can understand this process and be well-prepared, which not only can accelerate the audit progress but also establish good relationships with regulatory authorities.

Vietnamese Banks’ Automatic Check Systems

Vietnamese banks and financial institutions are increasingly adopting automated systems for preliminary audits, requiring enterprises to ensure their statements meet basic technical and format requirements before submission.

Common Automatic Check Points: Ensure correct data relationships between various statements, such as assets equaling liabilities plus owner’s equity. Check whether the correct report template is used, whether the format is consistent, and whether all required fields are filled. Check the logical relationships between certain indicators, such as whether liquidity ratios, asset turnover rates, etc., are within reasonable ranges. Check whether current period data is consistent with submitted historical data, and whether there are any significant differences without prior explanation.