Setting up a business is not enough; there are so many other things that you need to make sure to see it continues to run successfully. One amongst them is cash management. Majority of the businesses fail due to inappropriate cash management. Being a business manager you must always keep the cash under control.
It is true that there are banks and funding agencies in Thailand that helps businesses with funds, but then not always the foreign-owned SMEs are eligible for that. Thus, you must have sufficient capital with you.
Well, to minimize capital requirement at regular intervals you can ask for advance for services or take advantage of free credit when possible. On occasions, it is beneficial to offer credit terms, especially when the profit margin is high to absorb all the bad debts.
Financing the Operations
Your business must be capitalized to finance its operations as well as settle all the liabilities. Similarly, it must also comply with the business law that needs a minimum share capital of 2,000,000 Baht per foreign employee.
To keep tab, it is advisable to maintain a monthly cash flow forecast. And for this, take assistance of your accountant or consultant. Apart from this, it is important to be conservative in your planning. Write down all the possible costs and then add margins for any sudden events. Of all, it is extremely important to have an exit plan ready in case your business fails. Additionally, establish your maximum investment in business to avoid over-spending.
Save on Your Withholding Tax
While you transfer money to your Thai company bank account from overseas, you must ask the originating bank to identify it in your limited company’s name. Once the transfer is done, request for foreign exchange document from the receiving bank, so that these funds can be repatriated without withholding tax later.
