Accounting Services in Latvia: A Complete Guide for Companies and Self-Employed

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Accounting keeps your numbers in order. It shows where money goes, how much you earn and what you owe. Latvia has clear rules. Every business must follow them. SIA, self-employed, IK and even inactive companies must file reports.
A mistake leads to penalties. A late report triggers questions. Wrong data affects your tax status. This is why companies use professional accounting services. Below is a full breakdown of how accounting works in Latvia.

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What Accounting Services Include in Latvia

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Accounting services cover all daily financial processes. You get full control over documents, reports and taxes. Main tasks:

• invoice processing
• receipt checks
• bank statement reviews
• payroll
• tax reports
• VAT reports
• annual statements
• support with banks and the State Revenue Service
• advice on tax rules

Accurate accounting protects your business from risks and unnecessary costs.

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Who Needs Accounting Services

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SIA

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A limited liability company must submit:
• salary reports
• VAT declarations (if registered)
• corporate tax documentation
• annual statements

Most SIA choose outsourced accounting. It cuts costs and keeps the process stable.

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Self-Employed

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Rules are lighter, but reports are still required. Many self-employed workers hire an accountant when:
• expenses grow
• activity expands
• they work with EU clients
• they buy equipment

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IK

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An IK owner is liable with personal assets. Because of that, precise accounting is vital. Most IK work with professionals to reduce risks.

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Key Accounting Services in Latvia

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Document Processing

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The accountant reviews invoices, receipts, contracts and bank records. Each document must be correct. One error affects the full report.

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Payroll

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Payroll includes:
• gross salary
• taxes
• social contributions
• net salary
• holiday pay
• sick leave pay

The accountant prepares the monthly employer report and payment orders.

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VAT

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VAT accounting includes:
• input VAT
• output VAT
• monthly reports
• EC transaction reports
• VAT adjustments

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Annual Statement

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Every SIA must file an annual statement. Even without activity. The accountant prepares:
• balance sheet
• profit and loss statement
• notes
• supporting records

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Tax Advice

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Tax rules change. A professional explains how new rules impact your operations and prevents costly mistakes.

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Documents for Banks

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Banks request financial proof when you open an account, request credit or confirm turnover. The accountant prepares the needed documents.

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Why Companies Choose Outsourced Accounting

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Lower Costs

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Hiring a full-time accountant is expensive. You pay salary, social contributions and software. Outsourcing removes these expenses.

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Experience

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Outsourced accountants work with many industries. They know how to handle different cases.

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Clear Responsibility

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The contract defines duties and deadlines. You know who is responsible for each task.

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Flexibility

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You pay only for the actual workload. If activity drops, costs drop too.

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What Matters in the Accounting Process

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Timely Submission

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The State Revenue Service sets clear deadlines. Missing them creates penalties.

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Clean Documentation

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Correct structure improves accuracy. It also prevents mistakes in reports.

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Stable Communication

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You send documents on time. The accountant processes them without delays.

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How to Choose an Accounting Provider

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Experience and Reputation

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Check how long the accountant has worked. Review their client list.

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Price

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Extremely low prices signal low quality. A stable service has a balanced rate.

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Contract

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The agreement must define tasks, deadlines, rights and duties.

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Technology

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A good accountant works with digital systems. It improves speed and accuracy.

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Common Accounting Errors in Latvia

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Incorrect Invoices

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Wrong details cause issues with the State Revenue Service.

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Wrong VAT Rates

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Latvia uses several rates: 21, 12, 5 and 0 percent. Wrong choice leads to fines.

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Late Reports

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The system registers every delay. It affects your rating and future checks.

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Wrong Expense Classification

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Misclassified expenses distort your tax base.

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Accounting Changes in 2024–2025

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Digital reporting grows. New requirements apply to companies with EU partners. VAT control becomes stricter. Because of that, demand for professional accounting increases.

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Why the Annual Statement Matters

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The annual statement shows:
• assets
• liabilities
• income
• losses
• financial stability

Banks, investors and partners rely on these numbers.

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When You Need a Professional Accountant

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High Transaction Volume

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More documents means more risks.

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VAT Registration

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VAT creates more reports and more control.

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Work With EU Partners

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Cross-border operations require strict documentation.

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Hiring Employees

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Payroll rules are detailed. Errors lead to penalties.

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Bank Financing

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Banks expect correct and complete reports.

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Cost of Accounting Services in Latvia

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Prices depend on:
• number of documents
• employees
• VAT registration
• turnover
• complexity

Approximate ranges:
• self-employed: 30–70 EUR
• small SIA: 70–200 EUR
• companies with staff: 200–600 EUR
• complex structures: from 600 EUR

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How Outsourcing Saves Money

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No Software Costs

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The provider uses their own systems.

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No Training Costs

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Training and updates are handled by the provider.

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Lower Risk of Mistakes

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Professionals reduce the risk of penalties.

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Access to a Team

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You get support from several specialists, not one person.

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How Daily Accounting Works in Latvia

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Document Collection

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The accountant receives:
• invoices
• receipts
• cash records
• bank statements
• contracts
• delivery notes

The earlier you send documents, the cleaner the reports.

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Document Review

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Each document is checked for:
• dates
• numbers
• VAT rates
• supplier details
• buyer details
• description of goods or services

A small mistake creates bigger issues later. A careful check prevents them.

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Entry Into the Accounting System

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The accountant enters documents into a digital system.
Most companies use:
• Tildes Jumis
• Horizon
• Zalktis
• ERP tools

These systems organize data, detect errors and prepare reports.

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Transaction Classification

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Each entry goes to the right place:
• income
• expenses
• assets
• liabilities
• equity

Correct classification influences profit, tax amounts and the annual statement.

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Why Regular Accounting Matters

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Clear Financial Picture

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Regular updates show how the business performs. You see spending patterns and income trends.

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Better Planning

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Accurate numbers help plan budgets and investments.

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Readiness for Audits

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When documents are accurate, audits do not cause stress.

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Lower Risks

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Regular accounting prevents fines, errors and unexpected liabilities.

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VAT Accounting in Latvia: Detailed Overview

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VAT Rates

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Latvia uses several rates:
• 21 percent
• 12 percent
• 5 percent
• 0 percent

Each rate is tied to clear rules. The accountant chooses the correct one for each transaction.

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Monthly VAT Declarations

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If your company is registered for VAT, you file every month.
The declaration includes:
• sales with VAT
• purchases with VAT
• EU transactions
• corrections, if needed

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Input VAT Deduction

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If expenses relate to business operations, input VAT is deductible.
The accountant checks each case before adding it to the declaration.

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VAT Refund

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If input VAT exceeds VAT on sales, the company receives a refund or carries the balance forward.
The accountant prepares explanations and supporting documents.

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Payroll Accounting

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Registering Employees

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Employees must be registered before they start work. Failure to register leads to penalties.

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Payroll Calculation

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Payroll includes:
• gross salary
• taxes
• social contributions
• net salary
• holiday pay
• sick pay

The accountant prepares the monthly employer report and ensures correct payments.

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Common Payroll Problems

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• wrong tax rate
• errors in working hours
• missing holiday payments
• incorrect sick leave calculations
• wrong social contribution base

Experienced accountants prevent these issues.

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Annual Statement: Complete Breakdown

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Who Must File

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All SIA must file an annual statement.
Even companies with zero activity must file a simplified report.

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What the Annual Statement Includes

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• balance sheet
• profit and loss statement
• notes
• management report (for some companies)

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Why It Matters

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The annual statement shows:
• financial strength
• stability
• debt levels
• growth trends

It affects credit decisions, investor interest and partner trust.

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Annual Errors

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Common problems include:
• mismatched balances
• missing documents
• incorrect classification
• errors in long-term asset values

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Digital Accounting in Latvia

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Online Submission

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All reports go through the State Revenue Service electronic platform. The process is fast and safe.

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Digital Document Storage

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Businesses can store documents digitally.
This saves time, space and resources.

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Automation Tools

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Automation helps:
• reduce manual work
• detect errors
• speed up monthly reporting
• improve accuracy

Modern accounting uses automation in all key areas.

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When a Business Must Switch to Professional Accounting

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High Volume

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More operations increase the chance of mistakes.

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VAT Registration

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VAT accounting is complex. It involves strict deadlines and detailed checks.

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EU Trade

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Cross-border operations require more documentation.

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Employee Hiring

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Payroll rules demand accuracy. Errors lead to penalties.

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Funding and Loans

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Banks require proper statements and stable accounting history.

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Accounting Prices in Detail

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What Affects the Price

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• number of invoices
• number of employees
• VAT status
• industry
• monthly workload
• requirement for management reports

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Typical Price Levels

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• self-employed: 30–70 EUR
• small SIA: 70–200 EUR
• companies with employees: 200–600 EUR
• complex companies: 600 EUR and higher

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How Outsourcing Reduces Costs

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No Salaries and Benefits

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No need to pay a monthly salary, sick leave or holiday pay to an in-house accountant.

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No Software Costs

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The accounting firm provides the software.

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No Training Costs

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The firm handles updates, rules and training.

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Lower Mistake Risk

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Professional accountants reduce financial risks.

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Access to Specialists

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A firm often has several accountants who help with different questions.

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Extended Benefits of Professional Accounting

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Better Communication With Authorities

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The accountant handles questions from the State Revenue Service, banks and auditors.

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Faster Data Processing

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Modern tools speed up monthly closing.

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Better Financial Control

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You understand your numbers. You see which products bring profit and which drain resources.

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Stronger Reputation

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A company with clean accounting inspires trust.

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Accounting services in Latvia provide structure and clarity. They keep your documents clean and your reports correct. They protect you from penalties and unexpected problems. A professional handles daily work, deadlines and legal requirements.
Accurate accounting gives your business confidence and direction. It helps you grow, plan and operate without unnecessary stress.

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Frequently Asked Questions

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1. Do I need VAT registration when starting a business
Only when turnover reaches the threshold or when your activity requires it.

2. How fast can an accountant prepare reports
It depends on document volume. The earlier you send documents, the faster the report is completed.

3. Can I change my accounting provider easily
Yes. You hand over documents and continue with a new provider.

4. Does the annual statement apply to companies with no activity
Yes. Even inactive companies must file a simplified statement.

5. Is outsourcing safe
Yes. The contract defines duties, confidentiality and responsibility.