Hong Kong Bookkeeping Services

Roger Pay
2 days ago
6 min read

Hong Kong Bookkeeping Services Explained

Bookkeeping services in Hong Kong are essential for businesses of all sizes, from startups to established corporations, to ensure they comply with local regulations and maintain accurate financial records. Here's a breakdown of what these services typically include and other important considerations.

Key Bookkeeping Services

Most bookkeeping services in Hong Kong offer a comprehensive range of tasks, often bundled with other accounting and corporate services. These services typically include:

Daily Transaction Recording: Keeping a detailed record of all income and expenses. This forms the basis of your financial records.
Bank Reconciliation: Comparing your company's bank statements with the internal financial records to ensure they match.
Preparation of Financial Statements: Creating key financial reports like the profit and loss statement, balance sheet, and cash flow statement.
Accounts Receivable and Payable Management: Handling invoices, tracking payments from customers, and managing payments to suppliers.
Payroll Services: Managing employee salaries, MPF contributions, and related tax filings (Employer's Returns).
Audit Assistance: Preparing and organizing documents for the mandatory annual audit by a Certified Public Accountant (CPA). Note that the bookkeeping service provider is not the auditor, but they facilitate the process.
Tax Filing and Compliance: Helping with the preparation and filing of Profits Tax Returns and other required tax documents with the Inland Revenue Department (IRD).
Use of Accounting Software: Many providers use modern, cloud-based accounting software like Xero or QuickBooks, allowing for real-time access to your financial data.

Cost of Bookkeeping Services

The cost of bookkeeping services in Hong Kong can vary significantly based on several factors, including:

Business Size and Complexity: A small startup with a low volume of transactions will pay less than a large company with a high volume and more complex operations (e.g., multi-currency transactions, extensive payroll).
Scope of Services: The price increases with the number of services you require. A basic package might just cover annual bookkeeping and tax filing, while a premium package could include monthly management reports, payroll, and advisory services.
Provider Type: Fees vary between freelance accountants, local firms, and larger international firms.

While prices can range widely, some providers offer packages starting from around HK$3,500 per financial year for very small businesses, with prices increasing based on transaction volume and services needed. Monthly or annual packages are common, and some providers may also offer hourly rates.

Accounting Standards and Requirements

Hong Kong has specific accounting standards that companies must follow:

HKFRS (Hong Kong Financial Reporting Standards): Issued by the Hong Kong Institute of Certified Public Accountants (HKICPA), these standards are converged with the International Financial Reporting Standards (IFRS).
SME-FRF & SME-FRS: The HKICPA has also introduced a specialized, simplified framework for Small and Medium-sized Entities (SMEs). This framework is designed to make financial reporting less complex for qualifying businesses.
Mandatory Annual Audit: Almost all Hong Kong companies are legally required to have their annual financial statements audited by a CPA. This audit report, along with the company's Profits Tax Return, is submitted to the IRD.
Record-Keeping: Companies must maintain proper accounting records of all their financial transactions for at least seven years.

For small businesses, it's possible to do your own accounting, but it can become time-consuming and complex as the business grows. Professional services help ensure compliance with all local laws and regulations, freeing up business owners to focus on their core operations.

Fees

The fees for bookkeeping services in Hong Kong can vary widely based on several factors, primarily the size and complexity of your business. There isn't a single standard price, but rather a range of options catering to different needs. Here's a breakdown of the fee structures and what influences them:

Factors that Determine Fees

Volume of Transactions: This is the most significant factor. Bestar categorizes our services based on the number of transactions per month or year. A company with 50 transactions per month will pay considerably less than one with 500.
Frequency of Service: Fees can be structured annually, quarterly, or monthly. Annual packages are generally the most affordable, but they require you to gather all your financial records at the end of the year, which can be a significant workload. Monthly or quarterly services offer more up-to-date financial insights and spread the work (and cost) throughout the year.

Prices

Here are some general price ranges (in HKD) you can expect to see:

For very small businesses/startups (low transaction volume, < 10-30 per month):
- Annual Bookkeeping: Can start from as low as HK$3,500 - HK$5,000 per financial year. This includes a full year's bookkeeping and preparation of unaudited financial statements.
- Monthly Bookkeeping: Packages for this level range from HK$1,000 - HK$2,000 per month.
For small to medium-sized enterprises (SMEs) (moderate transaction volume, 50-200 per month):
- Annual Bookkeeping: Packages start at around HK$8,000 - HK$15,000 per financial year, depending on the exact number of transactions.
- Monthly Bookkeeping: Expect to pay between HK$2,000 - HK$5,000 or more per month for a comprehensive package that includes monthly reports and other administrative tasks.
For larger businesses or those with complex needs:
- Pricing is custom and based on a detailed quote. Packages can start from HK$5,000 per month and go significantly higher.

Additional Cost to Consider:

One-Time Services: Bestar also offers project-based or one-time services, such as setting up your initial accounting system or catching up on historical bookkeeping. These are priced separately.

How Bestar can Help

Hiring a professional for bookkeeping services in Hong Kong is highly beneficial for businesses of all sizes. While it might seem like an added expense, the value we provide often outweighs the cost, helping you save time, money, and stress in the long run.

Here's how Bestar can help:

1. Ensures Regulatory Compliance and Avoids Penalties

Hong Kong has a specific and strict regulatory framework for companies, including the Companies Ordinance and requirements from the Inland Revenue Department (IRD). Bestar is well-versed in these rules. We ensure:

Accurate Record-Keeping: All financial records are maintained according to the Hong Kong Financial Reporting Standards (HKFRS) or the simplified SME-FRF/SME-FRS.
Timely Filings: We help you meet important deadlines for submitting Profits Tax Returns, Employer's Returns, and other required documents.
Mandatory Audits: We prepare your financial statements and records for the annual audit, a legal requirement for most Hong Kong companies. We can also serve as a liaison with the auditor to handle any queries.
Staying Updated: The financial and tax landscape can change. Bestar stays up-to-date on the latest regulations, ensuring your business remains compliant and avoids costly fines or legal issues.

2. Saves Time and Allows You to Focus on Growth

Bookkeeping is a time-consuming administrative task that takes business owners away from their core responsibilities. By outsourcing these services, you can:

Reclaim Your Time: You can dedicate your energy to strategic planning, product development, sales, and client relationships—the activities that actually grow your business.
Increase Efficiency: Bestar has streamlined processes and use specialized accounting software (like Xero or QuickBooks) to handle transactions quickly and accurately.
Reduce Administrative Burden: You don't have to worry about managing a full-time in-house accountant, including the costs of salary, benefits, training, and office space.

3. Provides Valuable Financial Insights for Better Decision-Making

Bookkeeping is more than just data entry; it's the foundation for understanding your business's financial health. Bestar helps you transform raw data into actionable insights:

Generate Key Financial Reports: We prepare accurate and timely financial statements, such as the profit and loss statement, balance sheet, and cash flow statement.
Analyze Performance: By analyzing these reports, we can help you identify trends, pinpoint areas of profitability, and spot potential red flags.
Improve Cash Flow Management: We can help you track accounts receivable (money owed to you) and accounts payable (money you owe), ensuring you have a healthy cash flow to cover expenses and plan for the future.
Support Strategic Planning: With a clear picture of your finances, you can make informed decisions about hiring, investments, and business expansion.

4. Maximizes Tax Savings

Tax laws can be complex, and it's easy to miss out on potential deductions or exemptions without professional guidance. Bestar can:

Identify Eligible Deductions: We ensure all legal business expenses are properly recorded and claimed to reduce your taxable income.
Plan for Tax Efficiency: We can provide advice on structuring your finances to minimize your tax liability legally.
Ensure Accuracy: We handle the tax computation and filing, giving you peace of mind that your returns are accurate and free of errors that could lead to an audit.

5. Reduces the Risk of Errors and Fraud

Even a small error in bookkeeping can lead to a domino effect of inaccuracies, causing major headaches during tax season or an audit. Bestar provides:

Accuracy: Our expertise and use of double-entry accounting methods minimize the risk of human error.
Impartiality: Bestar provides an objective review of your finances, helping to detect any irregularities or potential fraud.
Organization: We ensure all your financial documents are meticulously organized and stored, making them easy to retrieve when needed.