This is the regular recording and organizing of all the company’s financial transactions. The said records are gathered daily or monthly from expenses, receipts of sales or deliveries, and bank statements. The aim of bookkeeping in Hong Kong is to have a correct and up-to-date bookkeeping record that is used to file annual returns.
Proper bookkeeping provides a record of the finance source, destination date, description of the transaction, and the amount. Hong Kong bookkeeping involves double entry whereby each transaction is written down twice, first as credit and as a debit on another account to prevent the occurrence of any error.
There are two bookkeeping methods. One method involves paper and pen, and it has been there for as far back as accounting services began. The other method is the use of a computer. This is a modern way of bookkeeping which utilizes a computer.it is believed to improve and simplify bookkeeping which reduces the making of errors. Another advantage is that it reduces paperwork and also it can be backed up online.
In as much as the bookkeeping information is critical to accounting services, a bookkeeper can only do bookkeeping services, but he/she cannot perform accounting services. However, a professional Certified Public Accountant can do both tasks. A bookkeeper only records financial transactions in the company ledger. An accountant turns the ledger details into important projections about the company.
The choice of a competent professional accounting service provider is critical to your company’s success. Look for Certified Public Accountants who comply with the Hong Kong Institute of Certified Public Accountants (HKICPA) regulations. He/she should be one who seeks to understand your company’s business rather than just looking at the numbers. They should have the ability to provide you with all important financial information and documents such as balance sheet and general ledger as opposed to just working on cash and bank statements.
Those businesses that mainly deal with cash transactions are to be very careful to keep all the records of transactions because they are the most vulnerable when it comes to proof of transaction. Examples of these businesses are retailers. And when keeping your books, always make sure you only enter transactions of value because some transactions may not be relevant for recording in a ledger, for example, personal finances.