The most important thing for you to know about accounting in Ukraine is that doing it correctly from the start is generally even more important than in most Western economies. There is not a lot of flex in how the authorities view correctness of accounting, and it’s easy to get fined in case of discrepancies. In the past it was common that the tax authorities raided foreign businesses to find some faults in their books and then aggressively fined them, but that is thankfully not happening a lot any more. This is why it is very important, especially as a foreign organization, to make sure that your books are done correctly.
There are a few good reasons for this. The first is the aspect of the correctness of your bookkeeping. If you hire your own accountant, you only get the expertise of one person. They might be a great accountant, but a professional company working in this sphere will have more combined experience and expertise. The second reason is the cost of maintaining your accounting infrastructure. Ukraine is an environment where the laws and regulations concerning bookkeeping change often, and that means updating your accounting software. When you trust a professional accounting company who has the right IT service partners, you can be sure that your accounting is always done with the best tools and is up to the current requirements of the law. Thirdly, in most cases you will want the extra level of control on your Ukrainian business that a professional accounting company can provide. If you hire a local director for the company and have internal accountants, it means you need to trust those persons with your business one hundred percent. Trust is great, but we prefer to add some control to the equation. You can, for example, hire Leinonen to do surveillance and controlling functions only. It means that we keep an eye on your business in Ukraine, making sure that all transactions are up to code and that there is no funny business going on.
In general we can say that accounting in Ukraine is very much similar to accounting in other CIS countries, and that it’s a legacy of how accounting used to be done in the soviet times. Of course it has come a long way since then, but it’s not as modern as in Europe or the USA for example. What it means is that more time is spent doing some tasks manually, which may already be automated in other economies. Additionally, in Ukraine it’s still mandatory to keep accounting records on paper, which means you need to be prepared to arrange your physical archives.
Yes. We recommend to all our clients to keep good control of their new or existing business in Ukraine. In many instances it’s a good idea to have a junior accountant inside the company to take care of daily tasks, but then trust a company like Leinonen to supervise and execute bank transfers, calculate and pay salaries, and to do statutory as well as internal reporting for the company. This way you always have a trusted partner who can tell you exactly what is going on at your company at any given time, and you can be sure that the company is operating according to your values.
The company CEO has to sign all invoices and papers, or the CEO can appoint someone else to do that on their behalf via a power of attorney. Electronic signatures are not valid for accounting purposes in Ukraine.
Unfortunately, these projects are extremely complicated and they involve lots of IT work. Generally it is not advisable to undertake such a project. Many large firms that use their own ERP elect to do double accounting instead because of the costs involved.
We like to agree on a document exchange schedule with the client. We can, for example, exchange electronic documents online to execute operations in real time. As original documents are needed for accounting archives in Ukraine, we can set a courier schedule to deliver those once or twice a month.
Yes, all companies are responsible for delivering their statutory reporting and paying taxes on time, which means accounting is needed. All companies also have to have a designated chief accountant (or an accounting company such as Leinonen designated as chief accountant).
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