If you are looking for bookkeeping services in the Republic of Serbia, and you are not familiar with the domestic legal regulations, how to find the right bookkeeper you will trust, how bookkeeping agencies work and many other interesting things, this is the right text for you.
What is the first step for a foreign Company that decides to invest in the Republic of Serbia?
Assuming that all financial and tax analyzes have been done in advance and that they have shown adequate results, the next step is to establish a Company in the Republic of Serbia (Limited Liability Company and Branch are most often types that foreign investors take into account).
P.S. If you have doubts regarding financial and tax issues in the Republic of Serbia, you can also contact the WTS team that has many years of experience in these areas.
You can send your best accountant or financial expert to the Republic of Serbia and again it is unlikely that he will be able to cope with all the obstacles.
To clarify immediately, the Law is very clear, as well as the procedure for establishing a Company, which you can read more about in our text “Company registration in Serbia”, but there are always linguistic, administrative, cultural and other barriers. You must have watched the movie “Borat”.
This situation is no different from the situation when a Serb would start establishing a Company in your country.
That is why it is good to have someone you can rely on and ask him a question for all doubts.
These are most often local bookkeeping agencies or local experts!
How to find a reliable partner in the Republic of Serbia?
There are several different ways to get the right contacts in Serbia:
- acquaintances
- recommendation
- internet, etc.
… and objectively speaking, you will never be 100% sure that you made the right decision, that is, choosing the right partner, at least not in the beginning.
Trust is the key!
With acts, communication, accuracy and adequate information partner deserves your trust.
Let’s get back to our topic, you have found a partner, established a Company, gained trust in a local partner or not – the next step is bookkeeping services.
Legislation for bookkeeping in Serbia
The basic framework for a setting a system of bookkeeping in Serbia is Law on Accounting.
Legal entities, branches and entrepreneurs shall keep books, prepare, present, submit and disclose financial statements in compliance with the legislation, professional and internal rules.
Classification of legal entities
In term of Law on Accounting, legal entities are classified as:
- micro
- small
- medium and
- large
Depending on the following criteria:
- the average number of employees
- business income and
- the average value of operating assets determined on the day of the drafting of the regular annual financial statement for the business year
All medium and large companies based on the above criterion have the liability for external audit. Also, small companies with revenues higher than 4.4m EUR have the liability of audit.
Mandatory acts, books and statements
Mandatory internal acts for compliance with the rule of accounting in Serbia are:
- “Internal Accounting Rulebook” required by Article 7. of the Law on Accounting that prescribes application of IFRS and contains accounting policies and internal controls system description.
- Local Chart of account
- “Internal Rulebook on the annual inventory of assets and liabilities
Mandatory books include:
- journal,
- general ledger and
- subsidiary ledgers.
Regular annual statements include:
- Balance sheet
- Income statement
- Cash flow Statement
- Another Comprehensive Income statement
- Statement on changes in equity
- Notes to the financial statements
Application of IFRS
IFRS shall be applied for recognition, evaluation, presentation and disclosure of items in the financial statements of:
- small entities – voluntary,
- medium entities – voluntary,
- large entities – mandatory,
- legal entities that have the obligation to compile consolidated financial statements (parent legal entities) – mandatory,
- public companies or companies that are preparing to become public, in accordance with the law governing the capital market, regardless of their size – mandatory.
IFRS for SMEs applies to the recognition, measurement, presentation and disclosure of items in the financial statements of small and medium-sized legal entities.
In addition, medium-sized legal entities may decide to apply IFRS rather than IFRS for SMEs. In that case, medium-sized companies apply IFRS continuously, unless they become a small legal entity in accordance with the Law on Accounting.
For the recognition, evaluation, presentation and disclosure of items in individual financial statements, micro and other legal entities, regardless of their size, shall apply secondary legislation passed by the minister in charge of financial affairs, which shall be based on general accounting principles. That is Rulebook on recognition assets, liabilities, revenues and costs of micro and other entities.
In addition, micro and other legal entities, regardless of their size, may choose to apply IFRS for SMEs or IFRS. In that case, micro and other legal entities, regardless of their size, apply IFRS for SMEs continuously.
For more information on legislation in the Republic of Serbia, you can read our text “Accounting in Serbia”.
Bookkeeping can be organized internally or externally.
Internal bookkeeping
In practice, all large Companies, mainly manufacturing Companies that invest in the Republic of Serbia, establish internal bookkeeping, but not immediately. They usually initially hire agencies that provide bookkeeping services.
Internal accounting has its advantages and disadvantages:
- easier control
- greater availability
- better communication (not always), but also
- greater responsibility
- higher costs, etc.
Since the accent in this text is on bookkeeping services, we will deal with bookkeeping agencies in more detail below.
One of the services provided by WTS Serbia is the optimization of internal bookkeeping (chart of accounts, IAS/IFRS, accounting software optimization, harmonization with legislation…).
External bookkeeping (Bookkeeping services in Serbia)
Micro, small and medium (non-manufacturing) companies that come to Serbia usually decide to hire an external accountant who will provide them with bookkeeping services.
There are a large number of bookkeeping agencies in Serbia, in all cities. Of course, one can always single out agencies that provide better and worse services. Isn’t that the case everywhere? Some do their job better than others and vice versa.
The good thing is that the new Law on accounting in Serbia envisages stricter control of bookkeeping agencies as well as the obligation for agencies to employ certified accountants in accordance with international regulations, so the possibility of error and negligence is significantly less.
What services can you expect from a bookkeeping agency?
Depending on which bookkeeping agency you choose, what its scope of work is and how much you are willing to pay, the range of services you will receive also depends.
If you hire WTS Serbia, you can be a user of the following types of services:
- services relate to Company founding
- bookkeeping services, financial operations and other support services
- compliance with IFRS and the Accounting Law
- preparation of internal acts and documentation in accordance with applicable regulations
- implementation of internal procedures and controls
- accurately calculation of employee salaries
- preparation of balance sheets and income statements, cash flows and other reports on a monthly/quarterly/annual level for the needs of management and statutory needs
- IAS 19 services
- preparation and submission of all tax returns and tax balance
- GDPR
- assistance in selecting appropriate employees (HR)
- tax consulting
- transfer pricing services
- business consulting
- education
Here I would like to draw attention to the fact that the goal of listing the services provided by WTS Serbia is not advertising and promoting our company (mostly) but a concrete example of all the services that a serious bookkeeping agency should have in its portfolio.
Fee for bookkeeping services in Serbia
You will agree that it is neither possible nor professional to talk about specific amounts in this section because they are affected by several factors.
What is feasible is to look at the most common way of pricing for bookkeeping and other services.
Having in mind all the services listed above, the fees can usually be:
- fixed (monthly)
- variable
- disposable (one-time fee)
… depending on your specific agreement with the service provider.
Fixed fees are usually agreed upon for the service of bookkeeping, compliance with legal regulations, monthly/quarterly reporting of the Client, etc. and they mainly depend on the number of received and issued invoices, the number of employees, revenues, etc.
Variable fees are represented in the calculation of salaries, payments orders, submission of individual tax returns, etc.
One-time fees are most often related to the establishment of a Company, the provision of transfer pricing services, the provision of various advisory services, GDPR services, the preparation of various contracts, the preparation of final reports (final balance sheet, income statement, cash flow statement, etc.), tax balances, etc.
The above classification is just an example! It all depends on your specific agreement with the bookkeeping agency, on your needs and financial possibilities.
How does the provision of bookkeeping services work in Serbia?
Digitization is in full swing. Information technology is increasingly present everywhere in the world, including in Serbia.
Quite logically, communication between the bookkeeper and the Client takes place electronically, most often via e-mail or specially developed communication programs.
When it comes to submitting the documentation (for recording in business books) to the bookkeeper, this can be done in several ways:
- by mail (or in-person) – a little outdated, but never out of fashion
- by mail (electronic)
- by attaching online (currently the most current)
The bookkeeping agency is then obliged to process all the received documentation, perform all obligations stipulated in the contract and then inform the Client about the work performed.
The state administration in Serbia is mostly automated, access is easy, so you can control the work of your accountant at any time, at least in the segment related to the submission of appropriate documentation to state authorities.
If good communication is established with the bookkeeper and if both the Client and the bookkeeper take their job seriously and in a timely manner, the possibility of error, delay and unwanted situations is minimized.
How to choose the right bookkeeping agency?
Who to entrust bookkeeping? How to be sure that the right choice has been made? What if you made a mistake with your choice?
There is no recipe or formula based on which you will reach the right partner.
When choosing a bookkeeping agency, you should consider the following:
- range of services on offer
- the impression of the first contact with a partner
- initial commitment
- a desire to dedicate to you
- website
- employees
- comments and recommendations from people who already use the services of a particular agency, etc.
You have noticed that the price is not listed. Just as it does not have to mean that cheaper chocolate is the worst, it does not have to mean that most expensive chocolate is the best.
You should definitely look for more offers, consider them well, compare, make additional meetings and make a final decision.
One thing is for sure! Don’t just look at how you get by cheaper, accounting is not something to joke about, and the sanctions prescribed by law are not negligible, be sure of that.
We agreed that the most expensive chocolate does not have to be the best. However, there is one saying in Serbia – “As much money, so much music” (“Koliko para, toliko muzke”). Think about it.
Conclusion for the end of
Our goal is that this text brings you at least a little bit closer to the bookkeeping services in Serbia and possibly helps you choose a partner.
The essence is that bookkeeping services in Serbia do not differ much from everywhere else in the world. Yes, the laws may be different, the culture, the administration, but the essence is the same everywhere.
Make no mistake! Just because you hire someone to help you keep your business books and gives you advice does not mean you won’t have to get involved. Only teamwork and good communication will help you to be fully compliant with the law and to sleep peacefully.
If you want to hire a good partner, you have any doubts regarding bookkeeping, taxes, finance, transfer pricing and other similar areas, do not hesitate to contact us!
