As China’s economy has been developing rapidly, foreign direct investment (FDI) has also been on the rise in line with the economic growth. Since 2015, the FDI has reached close to 120 Billion USD. While it’s tempting to invest in China, there might be barriers and headaches to manage your business, especially when you want to free yourself from accounting activities and focus on growing your business. Cloud accounting software utilizes the cloud to store accounting data, making financial information accessible to owners and employees anywhere. Your financial advisor and you can access your business data on a real-time basis, making it easier for you to stay focused on what matters most. Companies that might consider taking advantage of the benefits of cloud accounting include the following:
1. Cloud Accounting and Virtual CFO services
In order to run your business well in China, it’s crucial to have a qualified CFO, who is fluent in English, has an in-depth understanding of China business compliance and tax systems, and is able to help you better manage the internal control process. In China, however, it is hard to find a CFO, who can meet all the requirements mentioned above within the usually limited budget of a small business.
However, cloud technology opens up new and profitable opportunities for business owners. With a cloud accounting software, it is possible to hire an experienced and knowledgeable virtual CFO with the cost of a fraction of a full-time CFO. Cloud accounting software enables the business and the financial advisor to share real-time data, making the virtual CFO service feasible and possible. With the virtual CFO, small businesses can keep their financial goals clearly in sight.
2. Convenience and accessibility of a cloud solution
As an expatriate business owner, you might not be able to stay at a specific location for long; you will either travel intensively around for business, visiting clients or other entities and reporting to the headquarter. It is crucial that you can still keep track of the business data and keep an eye on the business operation while you are away from your office. The beauty of cloud accounting software is that it enables you to access your data and work anywhere, anytime. You can use a laptop, tablet or even smartphone, making your time more flexible and valuable. Thus, you are able to really enjoy the process of managing your business.
Traditionally, accounting software is designed for accountants, who have an in-depth understanding of the accounting practice. Therefore, it is hard for any other non-accounting personnel to understand the logic behind it. However, new cloud accounting software brought a new aspect into the traditional accounting field: that of being an accounting software as well as a business management tool. Normally, it is hard to find highly skilled staff who is able to use complicated software like SAP or Oracle without a long training. However, cloud accounting software is different. Besides the accountants, all other staff is able to use it without much training even if they have never used any online enterprise resource planning software or accounting software before. Sales, purchases, and expense claims are all easily and clearly recorded in the system, making the business process transparent and simple. Thus, the business owner is able to have a general view of the corporate operation and financial status, as well as to implement and regulate internal control.
4. Easy to manage expenses (Fapiao)
Doing business in China means to receive and to issue Fapiao, and to track the physical input and output, while the accountant is the one in charge of bookkeeping. When the Fapiao needs to be transferred from the business to the accountant for bookkeeping, there are usually a lot of emails and phone calls to make sure everybody has the same information. With a cloud accounting software, every piece of information is transparent and up-to-date, the business and the accountant are able to compare the actual Fapiao and the information online to make sure everything is accurate, making it easy for you to truly partner with your accountant. In the future, the Fapiao can be imported into the cloud accounting software directly from tax bureau and it will be even easier to monitor input Fapiao receiving and output Fapiao issuing.
5. Work efficiency
A cloud accounting software can reduce costs and improve operations by servicing users more efficiently. The cloud frees up staff from mundane, day-to-day activities, enabling them to spend more time on improving operational efficiency and effectiveness. Traditionally, it always takes a lot of time for staff in different departments or entities to communicate with each other. Business proposals, expense claims or other processes which need to go back and forth to answer queries and provide supporting documentation will take weeks or even months to be settled. With an easy-access cloud accounting software, everyone can view the up-to-date data, making communication less time-consuming. Approvals can be done within a few hours or days even if the managers are not in the same location as the staff, helping move the process forward faster and helping the staff stay focused on what’s most important.
6. Small budget
A cloud accounting software tends to be a more affordable accounting solution than traditional accounting software since upfront costs are lower. Cloud-based accounting programs automatically back up data, which makes this option more secure. Finally, cloud accounting software often functions across different platforms, while traditional accounting software may only work on one.
There is a lot to think about while running a business in China. When you choose the right accounting software, you can avoid the problems and take actions when it matters. If you are having fun with your accounting software, you will be excited to manage your business. Thus, you will be much better in tune with your financial situation and see a better opportunity to grow.
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Richard Hoffmann is a partner at ECOVIS Beijing China. Richard obtained an honors degree in law and worked in Germany, the United States, and China for various prestigious law firms prior to joining ECOVIS. In addition to being a member of the board of ECOVIS International, he is Supervisor for the China business of a respected German company and shares his extensive knowledge to students by teaching commercial law in China at SRH Hochschule Heidelberg. He has published more than fifty articles in international magazines, frequently speaks at high profile events in China and abroad and is often invited as a legal expert by international TV stations. Contact: email@example.com
Ecovis Beijing is the trusted tax and legal advisor to several embassies and official institutions in China. It specializes in mid-sized international companies and is focused on tax & legal advisory, accounting and auditing. If you’re interested in finding out more about tax and legal, don’t hesitate to sign up for our Newsletter, give us a call +86 10-65616609 or contact us directly via firstname.lastname@example.org.