In Hungary, every company is required to have an accountant to remain compliant with regulations. But what exactly can and cannot an accountant do? Should you get one on payroll or can you outsource these tasks? What to watch out for? Read on to find out.
What does an accountant do?
The accountant working for your Hungarian company undertakes various administrative tasks, complete with reporting to the authorities as well as the management. These tasks include:
- Recording incoming and outgoing invoices
- Reporting financial data to the Tax Authority
- Reporting financial data to the managing director
- Submitting annual reports to the Ministry of Justice (public data)
- Alerting the management of changes to regulations so they can keep the company compliant
- Alerting the management of compliance issues
- Payroll administration (not automatic, needs a separate agreement)
Creating invoices is not usually one of the tasks of the accountant. It can be, depending on how the company operates and whether the accountant is in-house or outsourced, but it is not a given. In line with this, you should discuss the invoicing procedure with your accountant.
What does an accountant not do?
There are a number of finance related tasks that are not part of the accountant’s job, so you should not expect them from your accountant. Instead, they can be handled by a (financial) assistant employed at your company. These tasks include:
- Checking whether invoices are valid (that is, they represent actual transactions)
- Creating agreements and delivery confirmations connected to the invoices
- Making bank transfers on your company’s behalf
- Managing your cash
- Communicating with your partners
- Correcting mistakes made by the previous accountant (if this is an issue, the new accountant may ask for a surcharge)
- Storing documents pertaining to previous fiscal years
Should you employ or outsource?
To keep their operation cost-effective, small and medium-sized companies in Hungary usually outsource their accountancy. As the business grows, it might eventually need a full-time accountant focusing all their attention on the company, but until then, outsourcing offers an easy solution for the optimal use of resources.
What to look for when searching for an accountant?
Since every business is different, you should find an accountant whose skillset will match the profile of your company. To give you an idea, here is a list of aspects to consider.
1. License
Chartered accountants are required by law to attend trainings regularly to ensure they are always up to date with regulations and they can provide appropriate services. Whether you are working with a freelancer or with a company, you can check on this online: see the list of licensed accountants here, or the company registry here.
2. Relevant experience
Companies with different profiles require accountants with different skillsets. What is your field of operation? What is your turnover? How many invoices do you issue daily, weekly, monthly? How many employees do you have? Under which tax regime do you pay taxes? The answers to these questions can give an accountant an idea of what you need, so they can decide whether they are the right match for the job.
For example, our team at Helpers Finance usually works with small and medium sized companies that pay taxes under regular taxation (TAO) or small business taxation (KIVA), have a handful of employees, and have a few major clients. However, if this is not you, you can still contact us to see if we can find you a suitable partner.
3. Communication
Since accounting is a crucial aspect of company operation in Hungary, it is essential that you can comfortably discuss relevant issues with your accountant. They should be fluent in English as well as Hungarian, and they should be able to explain Hungarian concepts to the foreign owners, clearly indicating deadlines, responsibilities, and steps to take in order to achieve certain goals. Moreover, they should have a clear policy about how you can contact them and how soon you should expect a reply. Helpers Finance also has considerable experience with all that.
4. Reliability
Being reliable does not mean that you can rely on your accountant with every finance related task. A reliable accountant will tell you clearly when you are asking for something that is not their expertise, and when you need to enlist specialist, e.g. for tax advisory, or managing customs procedures.
At the same time, your accountant needs access to electronic administration on behalf of your company. Through your personal account, you can give them formal authorization to handle the company’s account. You should be wary if the accountant asks for direct access to your personal account; while this takes a few tasks off your shoulder, it poses data security risks for you, so you should avoid it.
Who can be my accountant in Hungary?
Your Hungarian company needs an accountant. It can be anyone with a license, but you should make sure that their skills and experience match your requirements, that you can communicate comfortably, and they are clear about which tasks you can expect them to perform for you.
The Helpers Team provides assistance with every aspect of company formation in Hungary, which includes accountancy as well. This service is listed in our Accounting+ package, but you can also ask for it separately. Tell us about your business, and ask for a tailored quote!