AP & AR Management

AP/AR management is the day-to-day operational discipline of processing vendor invoices (AP: calculating withholding tax, issuing WHT certificates, scheduling payments) and customer invoices (AR: issuing tax-compliant invoices at the correct tax point, tracking overdue amounts, managing collections). It is distinct from bookkeeping (which records completed transactions) and treasury (which executes approved payments).

Above approximately 10 combined AP + AR invoices per month, dedicated AP/AR management typically pays for itself through: (a) e-WHT savings of THB 100,000–200,000 per year on qualifying vendor payments, (b) input-VAT credit preservation through correct PP 36 filing, and (c) reduction in AR bad-debt losses through structured collection before the 2-year statute of limitations closes.

Under Revenue Code Section 65 Bis (9) and Ministerial Regulation No. 186 (B.E. 2534), a bad debt is deductible only when: it was previously included in taxable income, genuine collection efforts have been made and documented, and for debts above THB 500,000 per debtor, court action has been initiated (unless legal cost exceeds the debt). Aged receivables alone are not enough — the deduction is procedural.

Under Revenue Code Section 78, the tax invoice must be issued at the tax point — the earliest of delivery of goods, completion of services, receipt of payment, or issuance of tax invoice. For a typical B2B sale on net-30 terms, the invoice must be issued at delivery, not when the customer pays. Late or back-dated invoices invalidate the buyer's input-VAT credit and trigger surcharges.

Ministerial Regulation No. 389 reduces WHT to 1% (from 3–7% standard) on hire-of-work, royalties, professional services, property rentals, and prize payments — if the payment runs through the e-WHT system at a participating Thai bank. In force through 31 December 2025. For a company paying THB 5 million/year in sub-contractor services at 3% WHT, e-WHT saves THB 100,000/year. Setup takes 2–3 weeks; Plizz handles it as part of onboarding.

PP 36 is the buyer's obligation to self-assess and remit 7% VAT on services purchased from overseas providers — Google Ads, Meta, AWS, Microsoft 365, foreign consultants, royalties to a parent. The buyer files PP 36 by the 7th of the following month (15th with e-Filing extension), pays the 7%, then claims it back as input VAT on the next PP 30. Failure forfeits the input-VAT credit and triggers surcharges.

For trade-debt receivables, the statute of limitations is 2 years from the due date under CCC Section 193/34. After 2 years, the legal right to sue is extinguished even if the debt is genuine. Plizz flags any AR over 18 months and recommends formal demand action before the 2-year cliff.

Standard rates under PND 54 are 15% for royalties and 5–15% for services and management fees. Treaty reductions (Thailand has 61 DTAs) typically bring service-fee WHT to 0–5% for qualifying treaty-resident recipients. Treaty claims require a Certificate of Residence from the foreign tax authority before payment — without it, full domestic WHT applies.

Bookkeeping records what's already happened. AP/AR manages open paperwork before it becomes a ledger entry — vendor invoices awaiting verification, customer invoices awaiting payment, WHT certificates awaiting issuance. Above ~10 invoices/month combined, separate AP/AR catches errors before they hit the books and prevents WHT certificates from being missed.