1. What are the official requirements of accounting in Hong Kong from the government?
All Hong Kong-incorporated companies are statutorily required by the Companies Ordinance to audit their financial statements on a yearly basis.
These financial statements are essentially accounting documents prepared by a Certified Public Accountant (CPA) on behalf of a business, with the aim of providing financial accountability to the company’s stakeholders. For private companies, financial statements are not required to be filed on public records.
For corporate entities, financial statements are required and must be prepared, in order to comply with the disclosure requirements set out in the Hong Kong Companies Ordinance, Hong Kong’s Financial Reporting Standards, and the Rules of The Stock Exchange of Hong Kong Limited for listed companies.
2. What is cloud accounting?
Cloud accounting is a better way to do accounting work. Unlike traditional accounting solutions, cloud accounting platforms are hosted on remote servers and make data and software accessible online anytime, anywhere, and from any device.
The greatest strength of moving accounting from offline to online is that it allows companies to manage and share access to their financial documents with their team, accountants, and bookkeepers – facilitating collaboration, transparency, and efficiency.
3. How does Cloud Accounting work?
To sum up, cloud accounting means storing and accessing accounting data over the internet and online software instead of one’s computer. Since the software is hosted in a remote server, it does not solely rely on a hard drive therefore it results in a safer choice for accountants or business owners. People can add or adjust data through an online platform with instant updates on all devices. There are also some other very popular usages of cloud computing such as google drive, dropbox, and Apple iCloud.
4. What are the benefits of cloud accounting software?
Software Keep Update
Technology is evolving every day, including clouding software. When you are always able to work with the latest version of the software since they update automatically, you can utilize the latest technologies or features to improve your workflow.
Easy to access
As long as you have an internet connection, you can connect to cloud accounting software anytime. It makes your team greater flexibility in working with your operations.
Reduce manual tasks
Cloud accounting software like Xero usually has integrations or bank feed functions that allow you to import transaction data safely from the bank to your cloud software. It reduces time in manual data entry as well as the reconciliation process.
Generate Reports instantly
Generating financial statements are no longer a problem for cloud accounting users. You can have your financial reports instantly with your software to comply with accounting standards.
5. What are the problems with traditional accounting software?
Huge Storage Cost
With the fact that data need to be stored in a local drive or in physical copies, there are great risks in terms of storage and transfer of data. And once the data is lost, there are huge costs to recover.
Limited people have the access
Since only a few computers have the software, very few people are able to get access to the accounting software which makes accounting work more inefficient in terms of collaboration and transparency.
Not able to adapt company growth
Given the software will not update automatically, the original software may not be able to manage the scaling business. The software then becomes a burden for the company instead of a tool.
6. Which online accounting system do we use?
The FastLane Group utilizes a cloud-based accounting software named Xero. Xero offers businesses a simple, yet powerful, way to manage their finances. Compared with traditional accounting systems or Excel, Xero users can access their business finances wherever they are, collaborate seamlessly with other parties, and can even improve their cash flow through online invoices.
The FastLane Group started its journey with Xero in 2013 and is certified as one of the Xero Advisors and Xero Platinum partners. Our team are Xero experts and can guide you through the benefits of Xero and transform how you do your bookkeeping, run your credit control and even pay your employees. To affirm our position as a leading Xero Partner, the FastLane Group has been awarded the Xero Award for Accounting Partner of the Year 2019!
7. What are some business processes that Xero can improve on?
Business owners who adopt Xero primarily do so because they want to make use of a business tool that will make running their business easier. Xero offers a simpler and more efficient way of managing some of the most tedious business processes out there, such as managing the invoicing of clients.
With Xero, businesses can create template agreements, invoice clients right away while making it easy for them to settle their payments, and even provide business owners with features that will allow them to follow up on any outstanding invoice! By automating many business processes, business owners will have the freedom to refocus their energy on the key revenue-driving activities that will help grow their business!
8. What factors should I consider when transitioning to Xero?
Once you have made the decision to move your business to a cloud accounting system like Xero, you have to take into consideration what this transition would look like. The following are factors to consider that can help smoothen the adoption of Xero:
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Is it necessary to migrate all the financial information of my business?
Many businesses often want to migrate all of their historical data from their old accounting platform onto Xero. However, to the extent that all the financial data of a business is already backed up and accessible, large data migration may not be necessary. Because this is a task that needs to be balanced with time and cost, sometimes it will be best to limit the migration of information to just what a business needs to meet its statutory record-keeping obligations. In these circumstances, it would be best to discuss these issues with your accountant!
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Should you work with a professional accounting firm to smoothen the process of adopting a cloud accounting system?
A common issue that a business experiences when moving to a cloud accounting system is that their financial information may require formatting in order to be successfully imported into Xero. Not only can this task be time-consuming, but it can also be complex. If a business decides to simply migrate its closing balances, a professional accounting firm may not be necessary for the purpose of getting started on Xero. However, if a business decides they want to migrate all its information, then working with a professional accounting firm can guarantee that no complications will arise during this exercise.
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When do you want to complete this transition?
Choosing when to start your business on a new online accounting platform is much easier than you think – depending on your requirements, you can start either on a new month or a new fiscal year. If you don’t need to port all your data over from your old accounting platform, simply bring across your closing balances: it’s a clean break.
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How will my team adjust to this change?
The physical change from using one accounting system to Xero is also accompanied by a mindset change for those who will have to use this new system. Business owners need to give their staff enough time to familiarize themselves with Xero by establishing a timeline and providing clear instructions on how to use the platform. Doing so can minimize the occurrence of any accounting issues going forward that arise from a lack of familiarity.
For those who are engaging a professional accounting firm to help facilitate this transition, ask them if they can host any training sessions!
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What other integrations will your business need?
Businesses all have different needs and will use different business tools to address their everyday challenges. Ensuring that all these different tools can work together can often enhance the core capabilities of a business whilst increasing the accuracy of the information utilized. If there is a specific business tool that your business needs, check first to see if it integrates with Xero here. If your desired tool doesn’t integrate, then you can also consider the variety of options found on Xero’s App Marketplace to see if there is a suitable alternative!
9. Does Xero offer additional features to users regularly?
Yes, Xero provides regular updates on the launch of new features on its websites on Xero News. In July 2022, Xero announced its new features that will allow customers to get quick answers and optimize financial analysis, the 3 major features of Xero updates include:
- Streamline financial analysis with additional tools, additional reports and foreign currencies.
- Enhancing customization with personalized presentation, structure of reports and layouts
- Increasing flexibility with standardized and customised reports and additional functions
For more details, read our blog: What You Need to Know About the Coming Changes Of Xero Accounting Software
10. How do we calculate transactions?
We determine the number of transactions per month as the number of transactions conducted in a corporate bank account. This includes all deposits, withdrawals, sales invoices, and business expenses.
At the FastLane Group, we take special care, not to double-count transactions. For example, if a company transfers funds between different bank accounts, we count this as one transaction. We also take into consideration whether the company makes several receipts for one sales invoice, or has similar recurring transactions through merchant accounts (Paypal, Stripe, Payoneer, Neat, etc). Other service providers may not account for such transactions.
If you are unsure of how many transactions your company conducts in any given month, don’t hesitate to reach out to us at FastLane. We can review the necessary documentation to help determine!
11. Why outsource accounting services?
As a small business owner, it’s likely that you’ve taken on the task of bookkeeping yourself in order to stay mindful of your expenses. Most business owners discover that their time is better spent focusing on their goods and services rather than accounting debits and credits as their company expands.
Outsourcing accounting services in Hong Kong allows small businesses and SMEs to access and utilize more resources as compared to relying on in-house accountants. The key benefits of outsourcing accounting services to a professional accounting firm are as follows:
- Save time to focus on other key business activities
- Save money by accessing professional knowledge and avoiding penalties
- Provide a better understanding of the company’s financial performance
- Improve cash flow management
- Seamless audit coordination
You may outsource everything from day-to-day accounts receivables to payables, payroll, transaction coding, accounting, filing your Profits Tax Return, and even financial reporting.
12. Can I handle my own bookkeeping?
Yes. However, it is not recommended. Bookkeeping is an essential part of a business as they are responsible for managing the day-to-day accounts. For business owners who wish to devote their time to business-generating activities, hiring a bookkeeper can ensure that they are able to do so.
According to Xero, without proper bookkeeping, “it would be easy for transactions to go unrecorded, left to pile up until the end of the financial period. Mistakes could be made and important details could be lost or forgotten”. Having a bookkeeper can lighten a load of a business, improving its efficiency.
Parties who require bookkeeping support but are not ready to completely outsource these related roles can consider setting up a Xero system. The FastLane Group’s cloud accounting services get you started with Xero, provide training on the system and manage all receipts you upload onto the platform!
13. What are the key differences between traditional accounting and online accounting?
The following are the 4 major differences between traditional and online accounting:
1. Users
- Traditional accounting: 1 person at a time
- Online accounting: Unlimited for Xero
2. Accessibility
- Traditional accounting: A license is purchased per computer and not conducive to the remote work environments and is unable to access real-time data
- Online accounting: Can access the real-time data at any time and anywhere and using any device including PC, laptop, tablet or smartphone
3. Automation and Data Backup
- Traditional accounting: Little to no automation
- Online accounting: Data is backed up 24/7 by secure and off-site systems. Automation is supported with applications and most bank feeds sync automatically and is easier to complete reconciliation
4. Updates
- Traditional accounting: Updates annually or when migration is forced
- Online accounting: Can be as frequent as every 3-6 weeks and the software is automatically updated across all platforms
14. Should you move your accounting to online accounting software?
Cloud accounting is a smarter, more efficient way to handle your business finances. Cloud accounting solutions, unlike traditional bookkeeping software, are hosted on remote servers and allow information and applications to be accessed from anywhere at any time on any device.
As stated by Marc Benioff, CEO of Salesforce.com, “cloud computing is a better way to run your business”. Moving your accounting work to the cloud is no exception. Businesses that use cloud accounting platforms such as Xero can enjoy increased efficiency through automation functions, increased data security and improved financial control over compliance matters. In addition, cloud platforms are typically designed with scalability in mind, allowing users the ability to pick and choose which functions they want to pay for and utilize.
15. How much does it cost for our accounting services?
We charge accounting services fees based on an hourly rate or a fixed fee per month depending on the number of your company transactions and business complexity. Nothing unexpected will appear on your bills!
