BOI After Approval (2): Raw Material Reconciliation — Why Your Import Rights Get "Suddenly Frozen"
Many companies get off to a smooth start with their BOI projects:
But after a period of operation, a very serious problem appears: the BOI system restricts the company's import rights.
In the cases we have handled, more than 80% come down to a single cause: non-compliant BOI raw material reconciliation.
1. What Is BOI Raw Material Reconciliation, and Why Does It Matter So Much?
Put simply, BOI raw material reconciliation (write-off) is proof that the raw materials you imported were actually used in production.
The regulatory logic is: how much was imported, where it was used, how much was produced, and whether the figures are reasonable.
Reconciliation is the final checkpoint in BOI closed-loop management. Without it, the earlier duty-free imports cannot form a complete compliance chain.
2. The Three Core Modules of Reconciliation
Module 1: BOM (Bill of Materials)
The BOM defines the raw material consumption for each product and is the basic data for reconciliation.
The BOM must be clear and accurate, covering all raw materials imported under BOI and their corresponding finished products.
Module 2: Raw Material Movement Records
The company must record:
All three must be consistent. A gap at any stage will make the data impossible to match.
Module 3: Reconciliation Filing
The company must regularly submit the following to the BOI system:
Raw material usage
Finished goods output
If this is not done, the system will flag the company as abnormal and progressively restrict its import rights.
3. Why Do Companies Run into Problems?
No BOM System
Result: the production logic cannot be explained, so reconciliation has no basis.
Finance and Production Data Do Not Match
Result: the accounting records and production issues do not agree, and the data cannot be matched.
Reconciliation Neglected for Long Periods
Result: the system identifies the company as high-risk, and its import rights are progressively restricted.
4. The Most Serious Consequence
When non-compliant reconciliation accumulates to a certain point, BOI import rights are frozen. This means:
Equipment and raw materials can no longer be imported duty-free.
Production is directly affected.
Import duty and VAT previously exempted may have to be paid back.
In serious cases, the BOI privileges may be at risk of revocation.
5. How to Build a Reconciliation System
We recommend that companies set up a three-tier coordinated structure:
| Tier | Responsibilities |
|---|
| Operations (production) | Define material usage logic, establish a standard BOM, and record materials issued |
| Finance (Thai accounting) | Record costs and inventory, ensuring the books match physical stock |
| BOI system | Complete reconciliation filings on schedule, keeping the data loop closed |
Only when all three tiers share information and keep their data consistent can an effective reconciliation system take shape.
6. Z&X Recommendations
Reconciliation problems are, at their core, not operational problems but system problems.
During the BOI operating phase, companies should:
Establish a standard BOM.
Set a reconciliation cycle (monthly or quarterly is recommended).
Provide regular BOI training and Thai finance training.
Assign a dedicated person to handle BOI system operations and reconciliation filings.
Reconciliation is not a one-off task; it is ongoing management that runs through the entire life of a BOI project.
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