China is a challenging yet potentially enormous market for businesses to enter, and one of the best ways to do so is to use the gateway of Hong Kong. With a simple, low tax system and a host of other business-friendly features, it can be a good area for foreign companies to base their operations if they are trying to enter Asian markets, including not only China but also Japan, South Korea, and Southeast Asia.
However, the process of starting to do business there is still plagued by some of the same challenges that companies encounter when entering any new country. One of these is a difference in accounting standards and practices. Fortunately, there are local services that can handle the accounting for a company’s Hong Kong operations. This short guide will explore why businesses should consider using them.
1. It reduces costs
Outsourcing to a third-party firm usually helps businesses by giving them access to accurate accounting services at a significantly lower price than hiring a qualified accountant to work exclusively for them. This is because external accountants often charge based on the amount of work that the company needs done. They do not get paid for unproductive time like a salaried employee does. If a company only needs a yearly report produced, then that is all they will pay for if they outsource.
Ultimately, the goal of any business is to make a profit, so keeping costs down is very important. However, it’s not just about saving money on costs. That saved money is then free to be invested into areas which help the company grow, such as researching new products or buying new equipment.
2. It gets you the benefits of modern tools
Developers often charge businesses a small fortune for software packages, and there is no doubt that software plays an essential role in modern accounting practices. That means that companies will have to pay up if they want to prepare their accounts in-house. Alternatively, they can let a local accounting firm pay for the software and do their accounting for them.
Many modern accounting tools use statistical techniques or machine learning to spot patterns and trends in companies’ finances. The companies can still benefit from this even if they outsource their accounting. They just need to agree with the accounting firm to share the insights. This might cost a little more, but this information can be very valuable.
3. Fewer compliance issues
Different accounting standards and regulations are some of the things that make doing business overseas very challenging. Preparing accounts is often complex, and governments tend to be quite unforgiving when it comes to errors. Mistakes made due to ignorance or completely by accident are sometimes mistaken for fraud.
Dealing with local accounting experts who deal with accounts in their country every day can be a much safer option than trying to go it alone.
Conclusion
The money and time you save by letting the locals handle accounting means that you can focus on important things like improving customer service and making better products. It’s also a much safer way of doing business in Hong Kong, since it can help you avoid mistakes and investigations by regulators or other government bodies.
