Accounting compliance in Montenegro

Tax Compliance in Montenegro

When you are following our series of articles on opening a business in Montenegro, you already know about the corporate taxes, the process of setting up a company and getting a residence permit. In this article, we will talk about accounting compliance and responsibilities of an accountant and the client.

To the question “What makes an accountant a good accountant?” Jacco Landsmeer, a partner in Ekonomik Accountants d.o.o., one of the largest and highly accredited accounting firms in Montenegro says: “It is all about trust, competence, pro-activity, and tailor-made solutions. Accounting is not a commodity like water, electricity or nowadays your internet connection where the cheapest offer is the best choice; it might actually be the worst choice. A good accountant is a valuable asset and the backbone of the client’s company for many essential topics, so it is crucial to hire competent experienced professionals working in solidly processed and managed accounting firms, having secure software solutions, proper liability insurance and proven references in the market.” To the question “How you can be sure to choose the right accounting firm for your company?” his opinion is straight forward; “There are 4 things to be checked which are essential; first of all check the competency of the people you will work with. Secondly, see if the company offers a solid portfolio of high-end quality services that are essential to your business needs. Check if they can show you satisfied customers that can confirm their professionalism and finally, see if they have described their business processes properly and have enough capacity for a sound execution of your daily operational needs.”

Here we listed the main list of responsibilities of a professional accounting firm and the client;

Main responsibilities of the Accounting Firm

  • The Accounting firm shall provide qualified personnel and all other resources necessary for the execution of the accounting and adherent services, promptly and correctly, in accordance with the Law on Accounting and Auditing of Montenegro, International Accounting Standards, International Financial Reporting Standards and in accordance with other relative legislation.
  • The Accounting firm is required to perform services according to the professional care and high-quality manner that provides maximum protection of Clients interests, in accordance with the applicable regulations and to keep all the information related to the business of the Client strictly confidential.
  • The Accounting firm shall set up an accounting system and implement a standard package of functionalities as part of the accounting software, including the general ledger, sub-ledgers, and non-current assets module.
  • Create an appropriate Montenegrin chart of accounts for the Company, in accordance with IAS standards.
  • Do regular accounting entries into the accounting system.
  • Maintain the journal ledger, general ledger, and sub-ledgers.
  • Make accruals for undocumented expenses incurred.
  • Do monthly reporting; balance sheet, income statement, cost expenses, administrative expenses, financial expenses, funds, and bank statements.
  • Do routine correspondence with the Authorities.
  • Manage travel orders administration; calculation of daily allowances, verification of claimed expenses from a compliance perspective and final calculation of business trips.

Compliance services specified above are done exclusively based on information and documentation provided by the Client and shall not standardly include the following tasks;

Main responsibilities of the Client

  • The client shall supply the data in a timely manner to the Accounting firm in the time that will allow smooth execution of the services. The Client is responsible for the veracity, accuracy, completeness, and accuracy of documentation submitted to the Accounting firm.
  • Creating purchase orders, invoices, preparation of sales invoices, inventory counts and petty cash. The Accounting Firm will not prepare nor change source documents or originating data.
  • Banking administration, bank transfers, and debt collection.
  • The Client shall provide Accounting Firm with the transactional data on a daily, weekly or monthly basis in the form of scanned copies while the originals will remain in responsibility of the Client.

If you need assistance on professional accounting service for your new venture, don’t hesitate to submit your inquiry.