Master the Chart of Accounts: A Guide to Circular 133/2016/TT-BTC for SMEs in Vietnam

The accounting account system serves as the fundamental architecture for recording, tracking, and reporting the financial health of any enterprise. In the context of the Vietnamese market, this system is strictly regulated by the Ministry of Finance. Specifically, for Small and Medium-sized Enterprises (SMEs), Circular 133/2016/TT-BTC acts as the definitive framework.

Understanding this structure is not only vital for accountants but also for business owners and developers building financial software solutions for the Vietnamese market. This article provides a comprehensive breakdown of the Chart of Accounts under Circular 133, helping you master the data structure and application of these financial codes.

Asset Accounts: Tracking Business Resources

Asset accounts reflect the value of assets currently owned by the enterprise. In the Vietnamese accounting system, these are logically categorized by liquidity, ranging from short-term (current) assets to long-term (non-current) assets.

Cash and Cash Equivalents (111)

This account category is the most liquid, used to track physical cash stored in the company’s treasury. It is essential for managing daily cash flow and liquidity ratios.

• Vietnam Dong (1111): Records cash on hand in the local currency (VND).
• Foreign Currency (1112): Records cash on hand in foreign currencies (USD, EUR, JPY, etc.). This requires periodic revaluation based on exchange rates.

Cash in Bank (112)

This account tracks funds deposited in commercial banks. With the rise of digital banking and fintech, precise tracking here is critical for reconciliation.

• Vietnam Dong (1121): Demand deposits in VND.
• Foreign Currency (1122): Demand deposits in foreign currencies.

Receivables (131, 133, 136, 138)

This group records amounts owed to the enterprise by customers, partners, or other parties. Managing these accounts effectively is key to optimizing working capital.

• Trade Receivables (131): Tracks money owed by customers from the sale of goods or services.
• Deductible VAT (133): A crucial account for tax reporting.
  • Deductible VAT on goods and services (1331): Input VAT for operational costs.
  • Deductible VAT on fixed assets (1332): Input VAT for capital expenditures (CAPEX).
• Internal Receivables (136): Tracks capital or funds at dependent units (e.g., Working capital at branches – 1361).
• Other Receivables (138): Miscellaneous receivables not classified elsewhere, such as shortages of assets awaiting resolution.

Inventory (151 – 157)

For manufacturing and trading businesses, the inventory group tracks the value of goods and materials. Accurate inventory accounting is the basis for calculating the Cost of Goods Sold (COGS).

• Goods in Transit (151): Purchased goods that have not yet arrived at the warehouse.
• Raw Materials (152): Inputs for the production process.
• Tools and Supplies (153): Items used in operations that do not meet fixed asset criteria.
• Work in Progress (154): Production and business costs currently incomplete.
• Finished Goods (155): Completed products ready for sale.
• Merchandise (156): Goods purchased for resale (retail/trading).
• Goods on Consignment (157): Goods sent to agents or customers but not yet sold.

Fixed Assets (211, 214, 217)

This group tracks long-term assets with high value used across multiple accounting periods.

• Tangible Fixed Assets (211):
  • Tangible Fixed Assets (2111): Machinery, buildings, vehicles.
  • Finance Lease Fixed Assets (2112): Assets held under finance leases.
  • Intangible Fixed Assets (2113): Software, patents, copyrights.
• Depreciation of Fixed Assets (214): A contra-asset account recording the accumulated wear and tear of assets.
• Investment Property (217): Property held to earn rentals or for capital appreciation.

Liability Accounts: Managing Obligations

Liability accounts reflect the financial obligations the enterprise owes to external parties.

Trade Payables (331)

This account tracks amounts owed to suppliers for goods and services. It is the counterpart to Account 131 and is vital for managing accounts payable turnover.

Taxes and Payables to the State (333)

Compliance is paramount in Vietnam. This account tracks various taxes and fees owed to the government.

• VAT Payable (3331): Output VAT collected from customers.
• Corporate Income Tax (3334): Tax on business profits (CIT).

Borrowings and Finance Lease Liabilities (341)

This account records the company’s leverage positions.

• Borrowings (3411): Short-term and long-term bank loans or bond issuances.
• Finance Lease Liabilities (3412): Obligations related to leased assets.

Owner’s Equity Accounts

These accounts represent the residual interest in the assets of the enterprise after deducting all its liabilities.

Owner’s Invested Capital (411)

This reflects the charter capital contributed by the owners or shareholders. It is the financial foundation of the company.

Undistributed Profit After Tax (421)

This account holds the net profit of the business. It indicates the company’s ability to reinvest or pay dividends.

Revenue Accounts (511, 515)

Revenue accounts track the inflow of economic benefits.

• Revenue from Sales and Service Provision (511): The core revenue stream from main business activities.
• Financial Income (515): Revenue from interest, dividends, and exchange rate gains.

Production and Business Expense Accounts (611 – 642)

Under Circular 133, expense tracking is streamlined compared to larger enterprises.

• Purchases (611): Used for enterprises applying the periodic inventory method.
• Production Cost (631): Aggregates costs for manufacturing.
• Cost of Goods Sold (632): The direct costs attributable to the production of the goods sold.
• Financial Expenses (635): Interest payments and exchange rate losses.
• General Administration Expenses (642): Overhead costs such as salaries for management, office supplies, and utilities.

Other Income (711) and Other Expenses (811)

These accounts capture irregular financial events unrelated to the core business operations.

• Other Income (711): E.g., Proceeds from the liquidation of fixed assets.
• Other Expenses (811): E.g., Penalties, fines, or losses from asset liquidation.

Determination of Business Results (911)

Account 911 is a temporary summary account used at the end of the accounting period. All revenues (Class 5, 7) and expenses (Class 6, 8) are transferred here to calculate the net profit or loss, which is then transferred to Account 421.

Conclusion

Mastering the Chart of Accounts under Circular 133/2016/TT-BTC is a prerequisite for financial transparency and legal compliance for SMEs in Vietnam. Whether you are an accountant setting up a ledger or a developer designing an ERP system, precise categorization of these accounts ensures accurate financial reporting.

We hope this overview provides a solid technical foundation for your accounting operations. For complex transactions, always refer to the detailed guidelines in the Circular or consult with a certified chief accountant.

References

1. Ministry of Finance Vietnam: Circular 133/2016/TT-BTC Guidelines for Vietnamese Corporate Accounting System for Small and Medium-sized Enterprises.
2. Thuvienphapluat (Law Library): Detailed breakdown of account systems and financial statements.
3. General Department of Taxation: Regulations on tax reporting and account mapping.