Tips Before Outsourcing Your Accounting Service To China

In China, as elsewhere, large and small companies outsource their accounting work, or even their entire Finance and Accounting (F&A) departments. The reasons are many, and given the fact that accounting outsourcing has developed in a global multi billion industry shows that it makes sense. But there are also risks.  How can we manage these risks in China and what needs to be done before one of your most important work is being outsourced in the largest country of the world?

Needless to say, your finance and accounting work is of uttermost importance. If the F&A department is failing, it is very likely the entire company will go belly up. Nevertheless, multinationals, large SMEs and the pizza shop around the corner all are outsourcing their finance and / or accounting work. There are many reasons why a company wants to outsource its accounting job. Lower costs, faster processes, better technology or optimized workflows are all valid arguments for the c-level management to take this very step.

When it is about outsourcing, accounting services in China might not be the first option that comes to mind. And there are risks that a foreign company needs to consider before taking this step. Here are some tips how to be on the safe side:

Ask the accounting firm to provide you all the papers that are necessary to verify its existence. Ask for:

• Company license (check the validity date)
• Business license (check the validity date)
• Accounting license (check validity and whether the name of the company owner is mentioned on it)
• Education degree of the accountant in charge of your company
• List of clients served in the last two years, including the names and contact details.

Copies of these papers should be chopped with the main company chop. In addition: Ask to see the originals. They won’t be given to you or sent to you, but you could go to the accounting company and verify that the originals exist.

Once you have decided to outsource your accounting task, make regular and irregular checks right in the first days and weeks. Set up meetings with the accountant and don’t just call or send an Email. Meet and discuss face-to-face how it is going, whether there are any problems and, of course, ask for weekly and monthly reports.

It is likely that China’s accounting system is quite different from the one of your home country. But at the end, it is all about accounting and the health of your company. Hence, if you don’t understand why the Chinese accountant has done this and not done that, ask and request an explanation. Make sure the accountant signs off his work and provides you with an audit in English and Chinese language. Note that only the Chinese audit will be accepted by the government. The English version is not legally binding and you shouldn’t rely on it. Therefore, it is important that you use a reliable translator who can verify that the English version is indeed saying the

same as the Chinese version.

For more details visit : www.cbc-bc.com