Have you ever considered outsourcing accounting activities as a small business owner in Hong Kong?
It is critical to grasp the significance of accounting and auditing standards if you are conducting business in Hong Kong or plan to do so. This eliminates the dangers of incorrect accounting procedures and tax filings.
Proper accounting is complicated, time-consuming, and requires up-to-date expertise. As a result, many SMEs and start-ups choose to outsource their company’s accounting functions. In this article, 6 benefits of outsourcing your accounting services will be mentioned. First, let’s start with the official Hong Kong standards for accounting.
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Accounting standards in Hong Kong
When recording your transactions as a corporation in Hong Kong, you must adhere to the Hong Kong Financial Reporting Standards (HKFRS) when preparing financial statements. This is not only essential for maintaining accurate and up-to-date accounting records, but it is also critical for submitting correct and timely income tax returns to the Inland Revenue Department (IRD).
Your company’s financial statements must be audited by a Hong Kong-licensed Certified Public Accountant (CPA) and submitted to the IRD, including the Profits Tax Returns.
In Hong Kong, all companies must submit an annual Profit Tax Return and tax computation to the government. After deducting all relevant costs and applying deductions, allowances, and incentives, the tax calculation will show the amount of tax your firm has to pay.
6 Benefits of outsourcing accounting services
The following are some of the advantages associated with outsourcing accounting services hong kong.
- Improve your understanding of your company’s financial performance
With appropriate data, you may make better business decisions based on knowledge. This is especially significant when it comes to your company’s finances and profitability. You can improve your firm’s profitability by obtaining sufficient financial information and analyzing the findings.
An accounting firm not only can assess your company’s financial health and enhance your understanding of the most profitable components of your business, but also identify any warning signals, which are useful in strategic planning such as expansion and prevention of delaying business growth.
- Reduce time and capital to focus on other key business activities
One of the most significant advantages of outsourcing any administrative operation is that you may devote your time and attention to core business activities while still expanding your company. As an SME or start-up owner, you are frequently better off not handling all elements of the business yourself. Especially if you are unskilled in a critical job like accounting. It takes a long time and a high possibility of mistakes.
You can relax by acquiring accounting services hong kong from specialists that handle your bookkeeping and accounting, you can rely on them to keep track of your company’s finances. At the same time, you may focus on what you do best
Besides, it is more expensive to hire accounting personnel to work in-house than to outsource it to a professional firm. You are restricted to a set, high pay if you hire full-time accountants in-house; you must supply equipment, and you are accountable for induction and training programs. Furthermore, there is a time-consuming recruiting procedure, as well as the potentiality that one or more of your accountants could depart the firm at some time.
When you hire accounting services from a professional accounting firm to handle your books, these concerns are no longer an issue. Furthermore, since these businesses frequently have a larger amount of resources and expertise than an in-house staff could possibly provide.
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- Better Cash Flow Management
Every company understands the importance of cash flow management. When an accounting firm is providing accounting services and handling your day-to-day bookkeeping and accounting, it is simple to check the correct cash flow position of the firm at any moment. You can immediately spot a lack of working cash flow and take measures, or see how well it is going in terms of cash flow. Furthermore, the financial flow records assist you in recognizing when your bills and invoices are due so that you may plan your cash flow accordingly.
- Business Plan Preparation
Preparing a business plan is an important first step in the process of starting a new company.
An accounting firm can assist you in writing a solid business plan even before your company is operational. Their financial expertise and advice may help you save money and time from the start. Creating financial projections, including cash flow forecasts, and other reports can make your business plan more professional, realistic, and likely to succeed.
- Coordination with external auditors
Annual financial reports are required of all incorporated firms in Hong Kong. A CPA licensed in Hong Kong must audit the financial statements. It will relieve a burden from business owners since: Outsource the management and formatting of your financial statements to an accounting firm and relieve your burden because:
- It ensures greater tax compliance and financial reporting standards.
- The accounting firm can assist you in managing the auditors and addressing sophisticated accounting issues.
- You would not miss any (tight) reporting deadlines
- Be Tax Compliant
Filing taxes for businesses, whether small or large, might be a difficult and time-consuming operation. Every Hong Kong firm is required to keep accurate financial records in accordance with the IRD’s standards and requirements. Accounting services hong kong by an accounting firm can handle the paperwork and give you a guideline of proper procedures, stay on schedule, and are tax compliant
How FastLane can help
FastLane Group is a CPA and corporate service provider in Hong Kong. We assist businesses in setting up operations in Hong Kong and other countries. To serve our clients, we employ cutting-edge technology.
FastLane is a Platinum Xero Partner and a Certified Xero Advisor, as well as a member of the FastLane Group. We can assist you in making the transition to cloud accounting as painless as possible. To help you get the most out of Xero, we provide a variety of services.
Get a 30-minute free consultation by calling a reputable FastLane consultant.