Foreign-owned companies can change accounting providers in Indonesia, but the handover needs a clear cut-off between the outgoing and incoming provider to prevent gaps in the company’s accounting and reporting.
Establish the Accounting Position and Handover Cut-Off
Before the handover, the company should establish the last completed accounting period by the outgoing provider and identify any unfinished work. This can include bank reconciliations, receivables and payables, fixed-asset records, intercompany balances, and outstanding accounting adjustments.
The company also needs to decide who will complete any open accounting period. If the outgoing provider stops work partway through a month, responsibility for recording the remaining transactions, completing reconciliations, and closing that month should be assigned before the new provider takes over.
Transfer the Accounting Records and System Access
The handover should include the information needed to continue the company’s accounting in Indonesia. This can include the general ledger, trial balances, chart of accounts, financial statements, bank reconciliations, receivable and payable schedules, fixed-asset register, and supporting documents. These records should also preserve the accounting structure established when the PT PMA began operating.
Where accounting software or a cloud platform is used, the company should also establish who controls the account, administrator access, and underlying accounting data. If access depends on credentials held by the outgoing provider, this should be resolved during the handover.
Changing accounting providers in Indonesia? Contact MAP Resources Indonesia at info@mapresourcesindonesia.com to discuss the transition
Previous closing balances and accounting system data should be transferred in a format that the incoming provider can use. Financial statements alone may not contain enough information to continue detailed reconciliations or trace individual balances.
Reconcile the Accounting Records with the Tax Position
The accounting records transferred to the new provider should be checked against the company’s previously filed tax returns, tax payment records, and supporting tax data. Tax balances in the ledger may relate to VAT, withholding taxes, corporate income tax, and other amounts already reported or paid.
Where accounting balances do not agree with previously reported tax information, the difference should be identified rather than simply carried into the new accounting period. The handover should also identify tax-related adjustments that have been calculated but not yet recorded in the accounts.
Where accounting and tax were handled by different providers, the handover should include enough tax information to explain the balances recorded in the accounts.
Preserve Overseas Group Reporting During the Handover
An Indonesian subsidiary changing accounting providers may still need to meet overseas headquarters requirements for group chart-of-account mappings, reporting currency, monthly templates, consolidation adjustments, intercompany reconciliations, and reporting deadlines.
Need continuity between Indonesian accounting and overseas group reporting? Contact MAP Resources Indonesia at info@mapresourcesindonesia.com
Existing intercompany balances should be carried forward and reconciled with the corresponding balances recorded by overseas group entities.
Verify the First Closing Period with the New Provider
At the first month-end close, opening balances should carry forward correctly, while bank accounts and key balance-sheet accounts should reconcile with the records received from the previous provider.
Tax-related and intercompany balances should also be checked, particularly where outstanding items were identified during the handover. Any differences inherited from earlier periods can then be separated from transactions recorded after the new provider took responsibility.
For companies with overseas reporting requirements, the first closing period should also confirm that the new provider can produce the required management or group reports within the existing reporting timetable.
Changing Accounting Providers with MAP Resources Indonesia
MAP Resources Indonesia supports foreign-owned companies changing accounting providers in Indonesia. Contact us at info@mapresourcesindonesia.com.
