Accounts receivable and
Payable management
Outsource Accounts Receivable And Payable Management in Thailand
Effective Accounts Receivable Management (A/R) and Accounts Payable (A/P) is crucial for maintaining a healthy cash flow in any business. In Thailand, with its unique financial landscape and regulations, it becomes even more critical. AO is committed to providing you with comprehensive insights into A/R and A/P management specific to Thai businesses.
Understanding the nuances of Accounts Receivable Management and A/P management in Thailand, especially in the context of local tax laws and business practices, can help businesses operate more effectively.
Importance in the Thai Context
The Thai government places stringent rules on accounting and tax reporting. Failure to effectively manage A/R and A/P can result in financial penalties and even legal complications. Therefore, maintaining accurate records and timely collections/payments are critical.
Key Steps in Accounts Receivable Management and Accounts Payable Management
Invoice Management
Thai law mandates that all invoices can be issued in the Thai or English language only and must comply with the stipulated Tax Invoice/Receipt format. Failure to precisely follow the compliant format and details will render the Tax Invoice/Receipt invalid and risk the related expense to be deemed non-deductible by Thai Revenue Department Officers.
This format includes: error-free registered spelling of both seller and buyer Tax ID number, correct spelling of entity name, address and specified disclosure of either head office or branch, exact description of goods or services name, quantities and amounts, exact sequential tax invoice numbering and dates of issuance. Also, VAT must be accurately calculated, and both the correct percentage and amount displayed.
Record Keeping
Proper bookkeeping is essential. Both A/R and A/P must be diligently recorded in accordance with the Thai Accounting Standards.
Payment Schedules
For A/R, businesses should have a robust collection mechanism. For A/P, they should schedule payments efficiently to take advantage of any early payment discounts and to avoid any penalties.
Tax Compliance
Especially for A/P, withholding tax implications need to be considered. This tax varies by service and failure to comply can result in financial penalties.
Challenges and Solutions:
Fluctuating Exchange Rates
Thailand has a significant number of international transactions. A/R and A/P management should factor in exchange rate fluctuations.
Local Banking Norms
Understanding local bank fees, transfer charges, and lead times can help in better cash flow management.
Alan Lonie
Executive Chairman
Point Of Contact
Alan has more than 30 years of professional accounting and management experience. He has been based in Thailand since 2002, working in senior financial roles with multinational businesses before co-founding Asia Accounts, which merged with AO in January 2025. He is a fellow member of the Association of Chartered Certified Accountants (FCCA), holds a first-class (honors) BSc from the University of London, and an Advanced Diploma in International Taxation from the Chartered Institute of Taxation. He is also a Xero Certified Advisor.
The Most Frequent Questions
In Thailand, AR and AP management involves following local accounting standards and tax regulations, including withholding tax and VAT compliance.
Thai businesses must maintain meticulous records in accordance with Thai Accounting Standards and tax laws, which include proper invoicing and document management.
An AR/AP accountant in a Thai company is responsible for invoicing, keeping track of payments and collections, and ensuring tax compliance.
If you have more questions?
Managing an AR team in Thailand involves setting clear collection targets, understanding local regulations, and using software tools compatible with Thai financial systems.
The AR workflow in Thailand involves invoice creation, record-keeping, setting collection schedules, and ensuring timely collections in compliance with local regulations.
For AP management in Thailand, consider local withholding tax regulations, VAT implications, and adherence to Thai Accounting Standards.