Accounting & Bookkeeping: Setting Up Your Finance Function

Accounting and bookkeeping are often discussed separately, but for a growing business the real question is how the two fit together. Who records transactions, who reviews them, who prepares VAT and tax filings, and who answers the auditor? When these roles are unclear, the same work is done twice or not at all, and deadlines under the VAT and SD Act 2012 and Income Tax Act 2023 are missed.

This page is for founders and managers designing their finance function for the first time, or restructuring one that is not working: a new company after incorporation, a business that has outgrown its first accountant, or a foreign investor setting up a subsidiary. It compares options and sets out a practical monthly and annual cycle.

In-house, outsourced or hybrid?

There is no single right model. The choice depends on transaction volume, complexity and budget.

• Fully in-house: suits larger businesses with daily volume and complex operations, but requires a qualified accounts head and backup staff
• Fully outsourced: suits startups, small companies and liaison offices with modest volumes; an external team handles books, VAT, tax and audit preparation
• Hybrid: an in-house assistant handles invoices, payments and document collection, while an outsourced adviser does monthly review, filings and year-end work. This is the most common model for SMEs and foreign subsidiaries

A practical monthly and annual cycle

• Daily: issue Mushak 6.3 invoices, record receipts and payments, file supporting documents
• Weekly: update customer and supplier ledgers, follow up on overdue receivables
• Monthly by around the 7th to 10th: reconcile bank, MFS and cash; post accruals; update Mushak 6.1 and 6.2 registers
• Monthly by the 15th: file the Mushak 9.1 VAT return and pay net VAT
• Monthly or as required: deposit TDS and VDS by the due dates and issue certificates
• Periodically: file withholding tax returns as required under the Income Tax Act 2023
• Year end: close the books, prepare financial statements, complete the statutory audit, hold the AGM, file the RJSC annual return and the company tax return

Controls that keep accounting and bookkeeping reliable

Small businesses rarely need complex controls, but a few basics prevent most errors and fraud. Separate the person who approves payments from the person who records them. Require supporting documents for every payment. Reconcile all bank accounts monthly and have someone senior review the reconciliation. Keep business and personal funds strictly separate. Restrict who can edit closed periods in the accounting software.

These controls also matter to outside parties. Auditors assess them, banks ask about them, and investors look for them in due diligence.

Choosing software and a chart of accounts

Select software that can produce VAT-compatible invoices and registers, handle multiple bank accounts and, if needed, foreign currency. Design the chart of accounts so that it maps directly to the lines in your financial statements and tax return, with separate accounts for items treated differently for tax, such as entertainment, donations, depreciation and expenses subject to withholding. Getting this right at the start avoids reclassification work every year end.

Warning signs your finance function needs restructuring

• VAT and tax returns are prepared by someone who never sees the accounts
• Year-end takes months and the auditor's adjustments are large
• Nobody can quickly answer how much cash the business will have next month
• One person controls every payment, entry and reconciliation

How the process works

1. Map current stateWe document who does what today, the software used and the filings that depend on it.
2. Recommend a modelWe propose an in-house, outsourced or hybrid model with clear roles and costs.
3. Build the frameworkWe set the chart of accounts, monthly calendar, approval rules and document routines.
4. Train your teamWe train in-house staff on invoices, Mushak registers and document handling.
5. Run and reviewWe operate our part of the cycle and review in-house work each month.
6. Year-end handoverWe prepare financial statements, audit file and tax schedules from the year's records.

Typical timeline: Designing and setting up a finance function for a small or medium business typically takes two to six weeks depending on the condition of existing records and the software chosen.

How Tax & VAT Associates helps

• Finance function design with role mapping and written procedures
• Chart of accounts aligned to financial statements, VAT and tax returns
• Compliance calendar covering VAT, TDS/VDS, tax and RJSC deadlines
• Training for in-house accounts staff
• Ongoing monthly review and filings under a hybrid model

Frequently asked questions

Related services

Last reviewed: 6 October 2026. Bangladesh tax and regulatory rules change with each Finance Act, SRO and authority circular. This page is general guidance; confirm current requirements for your case before filing.