Every registered company in China needs a way to navigate through the complex and often changing tax & accounting system. One of the most popular options to do this effectively is to use a professional bookkeeping provider in China. Accounting in China has to be compliant with the “China GAAP (General Accepted Accounting Principle), also known as “Accounting Standards for Business Enterprises” (ASBEs) which is a certificate available to Chinese accountants and local accounting firms.
When it comes to tax & accounting in China, all companies have 2 options: Handle accounting in-house and hire one or more certified Chinese accountants OR use a third party tax & accounting provider in China.
In this article, we share the top 5 reasons businesses should consider using a professional bookkeeping provider for their business in China. These include accuracy and compliance, greater expertise, database security, client satisfaction, and better technology and tools. While using cheap bookkeeping services may save costs, a good quality bookkeeping provider may make the difference between success and failure.
As the old saying goes, if something is too good to be true, it probably is!
1. Accuracy And Compliance
Having a good quality bookkeeping service can benefit a business in several ways, starting with accuracy and compliance. A reliable bookkeeping provider in China should ensure that your books are accurate and compliant with the constantly changing finance and tax laws. This not only helps you avoid costly fines and penalties but also reduces the risk of deportation of foreign employees. Moreover, a good accountant can steer your business in the right direction, guiding you smoothly through the regulatory system without any stress.
On the other hand, hiring a cheap bookkeeping provider can lead to non-compliance and mistakes, which can result in severe penalties and fines. In addition, if your accountant makes a mistake, the liability will fall on you, regardless of whether you have trusted them to take care of your tax.
By opting for a cheap bookkeeping provider, you may be risking the accuracy and compliance of your books, potentially leading to costly mistakes that can easily be overlooked. Therefore, it is crucial to invest in a good quality bookkeeping provider that can guarantee accuracy and compliance, rather than choosing a cheaper alternative that could compromise your business.
2. Greater Expertise
Choosing a good quality bookkeeping service can offer numerous benefits for businesses, including access to expertise. A reputable provider should have staff that is equipped to meet the client’s needs and is up to date with the current finance and tax laws. This is particularly important in China, where the requirements for becoming a Certified Public Accountant (CPA) are stringent. A licensed accounting agency that follows these requirements prices its services accordingly, ensuring that clients receive professional and expert advice.
On the other hand, cheap bookkeeping providers may cut corners by hiring inexperienced or underqualified staff to lower their prices and boost their sales. This can be potentially risky for businesses as an inexperienced or underqualified accountant could miss opportunities to lower a company’s tax burden, such as tax rebates, resulting in paying too much tax. It is crucial for businesses to consider the expertise of the bookkeeping provider when making their choice.
Opting for a cheap provider may save costs in the short term but can result in costly mistakes and missed opportunities in the long run. A good quality provider may cost more upfront, but their expertise and experience can save a business money and ensure compliance with finance and tax laws.
3. Database Security
One of the most important considerations is database security. Accountancy firms hold a large amount of private data, including national insurance numbers, tax documents, and direct-deposit information. It is crucial for businesses to choose a provider that has the IT manpower and resources to ensure the protection of their sensitive information. A good quality provider should have an IT department or IT staff in-house to provide standard database security and backup protocols consistently.
In contrast, cheap bookkeeping providers may not have the necessary resources to provide effective database security. They may outsource their IT or lack the human power to ensure consistent backup and security protocols. This can put a business at risk of data breaches, which can result in significant financial and reputational damage.
It is important for businesses to carefully consider the security measures in place when choosing a bookkeeping provider, as the consequences of a data breach can be severe. By opting for a good quality provider with an in-house IT department or IT staff, businesses can have peace of mind knowing that their sensitive data is secure and protected.
4. Client Satisfaction
One of the key advantages of a good quality bookkeeping provider is client satisfaction. It is important to look for established companies with low turnover rates, as these tend to provide consistent, high-quality service. Companies with rapidly changing staff are more likely to have knowledge gaps, questionable management, poor training, or missing internal guidelines, leading to inconsistent handling of client accounts.
New companies or those with a high turnover rate may not have established internal operations, resulting in a lack of follow-through on guarantees and service quality. This can be detrimental to a business, as too many different employees may be engaged in managing their financials, each with their own methods and approaches.
In contrast, a good quality bookkeeping provider will have a stable team of trained professionals who can provide consistent and reliable services to ensure that the financial records of a business are accurate, up-to-date, and compliant with regulatory requirements. This can lead to increased client satisfaction and improved financial management for the business.
5. Better Technology And Tools
Good quality bookkeeping providers invest in the latest accounting and bookkeeping software and tools to help manage and process financial transactions more efficiently. They are aware of the latest technologies and are committed to staying up-to-date with the latest trends to ensure they can provide clients with the best possible service. This can include cloud-based accounting software, which allows businesses to access their financial data from anywhere at any time, and automatic bank feeds that help reduce manual data entry.
Additionally, good quality bookkeeping providers also have access to advanced reporting tools, such as dashboards and financial analytics, which can provide detailed financial insights to business owners. These tools can help identify trends, opportunities, and potential issues early on, allowing business owners to make more informed decisions.
In contrast, cheap bookkeeping providers may use outdated software or lack the resources to invest in technology. This can result in inefficient processes and limited financial insights, leading to inaccurate financial reporting and missed opportunities. Furthermore, outdated software may not be compliant with regulatory requirements, leaving businesses at risk of fines or legal issues.
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