Did you know? Many businesses can’t keep going and are forced to shut down. But why?

Many businesses fail from the start due to poor corporate accounting planning. One of the most overlooked yet critical steps when starting a business is "corporate accounting planning" — a fundamental element that ensures operational and financial stability. More importantly, it plays a key role in shaping the long-term growth trajectory of a business. Many ventures with great ideas still struggle or collapse due to poor financial management — from inappropriate tax structures to the wrong choice of business registration type. A common pitfall is registering a company in an unsuitable legal form. Some businesses register as limited companies without fully understanding the associated tax burdens, legal obligations, or the complexity of setting up an appropriate organizational structure. On the other hand, some entrepreneurs operate as sole proprietors for too long simply because they don’t know how to take the next step — missing valuable opportunities that could be gained by formalizing their business legally. Without proper knowledge of accounting systems and the financial reporting requirements tied to corporate registration, many business owners face penalties from the Revenue Department or are subjected to retrospective tax audits. 

"One of the main reasons is a lack of understanding in accounting and tax planning."

Not having an expert to manage accounting and tax planning is another critical factor. Many businesses try to reduce costs by not hiring a professional accountant or accounting firm. Instead, they assign these responsibilities to family members or general staff, which often leads to issues down the line. A common consequence is the inability to prepare financial statements in compliance with accounting standards or to calculate taxes accurately. Minor errors accumulated over several months can turn into significant tax liabilities, ultimately disrupting business operations. In some cases, these financial missteps result in serious cash flow problems, forcing businesses to halt operations—or worse, shut down entirely—after prolonged periods of mismanagement that have grown too severe to resolve.

Getting Started with Corporate Accounting: What You Need to Know

Before you begin, it's important to understand: What exactly is corporate accounting?

To open a corporate or company account, the business must first be properly registered with the Department of Business Development under the Ministry of Commerce.After registration, it is important to consult with experts such as FDI to determine the appropriate accounting and tax planning strategies that align with the chosen business structure. This ensures minimal operational risk, enables transparent and auditable processes, provides a clear picture of the company's financial position, and supports effective planning for future investments and business expansion.  

Why should you set up a proper corporate accounting system from day one?

Planning the corporate accounting system to ensure smooth long-term operations involves legal compliance, credibility, communication with partners and customers, business expansion, and access to funding and loans from banks. Additional recommendations include:

1. It clearly separates the assets and liabilities between the business and the owner. 

For example, opening a bank account in the company’s or legal entity’s name has clear advantages. It allows separation of income and expenses from personal accounts, making accounting easier to track and more transparent. This also serves as important documentation when applying for loans or income certificates from banks. Opening a corporate bank account means separating the business accounts under a “legal entity” status, which the law recognizes as a distinct person separate from the business owner. As a result, the business’s assets are not mixed with personal assets. In case of debts or legal issues, the owner is not personally liable unless there is intentional illegal conduct. However, this also depends on proper accounting practices throughout the business operations.

2. Comply clearly with laws and tax regulations.

When a business’s revenue exceeds the legal threshold (especially if it exceeds 1.8 million baht per year, VAT registration is required), operating as a juristic person helps ensure proper tax filing and clear documentation structures. This reduces the risk of being subjected to tax audits or penalties from the Revenue Department due to failure to comply with mandatory tax submission regulations.

3. Efficient accounting and tax planning.

Operating as a juristic person allows businesses to claim a broader range of deductible expenses compared to individuals, such as rent, wages, materials, consulting fees, depreciation, and more. These deductions help reduce net profit and, consequently, the overall tax burden. Additionally, tax planning becomes easier, allowing for strategies such as income distribution, asset investment, and the establishment of various reserve funds.

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4. Helps enhance the credibility of the business. 

Clients, business partners, or large organizations—especially publicly listed companies, government agencies, or international organizations—typically require working with businesses that have juristic person status, a taxpayer identification number, and complete accounting and tax documentation, as they are considered more credible and reliable. Additional requirements may also apply when engaging in joint operations. Opening a corporate bank account and operating as a juristic person immediately enhances your business’s professional image in the eyes of others.

5. Easier access to funding sources and business loans.

Most financial institutions are more likely to approve loans for juristic persons than for individuals, as juristic persons can present systematic income records, audited financial statements, and offer greater legal stability. 

6. Ready for Future Business Expansion.

Every business owner hopes to see growth potential, with future plans such as expanding staff, entering international markets, or attracting investors. Establishing proper accounting and tax structures from the beginning is the right approach, as operating as a juristic person allows for clear shareholder structures, defined management roles, systematic financial reporting, and organized dividend distribution—all of which are key factors that investors look for.

In summary, Opening a corporate bank account is not just about “legal compliance”; it is also a way to **elevate your business**, enhancing credibility, transparency, and establishing a solid, secure financial structure to support future growth. 

Key Lessons from Accounting Failures of Many Businesses 

It is the understanding that good accounting is not a “cost” but an “investment” in the long-term sustainability of the business. Starting correctly, gaining proper knowledge, or choosing to consult with experts is always better than facing costly corrections and complications in the future. 

Therefore, if you are starting a new business or already running one but wish to establish a corporate accounting system, the first key priority should be effective accounting and corporate tax planning right from the beginning. 

Contact Us 

• Facebook : FDI Group – Business Consulting
• Line : @fdigroup
• Phone : 02-642-6866, 02-642-6869, 02-642-6895
• E-mail : infojob@fdi.co.th
• Website : www.fdi.co.th