With more services being streamlined, accounting has been no exception and with cloud accounting business owners, shareholders and managers are able to easily access and plan their company’s finances. Foreign companies using cloud accounting in China have overall experienced a large positive impact. Below we explore the benefits of cloud accounting, the challenges unique to foreign companies in China and how businesses can use online accounting to improve their processes.
What is Cloud Accounting?
Cloud accounting encompasses a system that facilitates multiple users to access and securely store data on online or remote servers. By sending data to cloud providers, it undergoes processing, safe storage, and subsequent retrieval. Cloud technology enables businesses to optimize their processes and customize them according to the company’s growth trajectory. The main purpose is to make collaboration and financial reporting easier.
How is Cloud Accounting Different from Traditional Accounting?
Cloud accounting and traditional accounting software differ in terms of accessibility and collaboration. Unlike traditional accounting software, cloud accounting is hosted remotely, allowing you and your team to access files from anywhere instead of being restricted to the office.
With cloud accounting, collaboration becomes easier and more convenient due to multi-user access, and it also reduces the need for excessive paperwork commonly associated with traditional accounting software usage.
What are the Benefits of Cloud Accounting in China?
Access Reports Anytime and Anywhere
Utilizing a cloud-based software program in China allows you to conveniently access your financial data at any time and from any location. Unlike regular software that requires downloads and updates, cloud-based solutions are hosted remotely, eliminating the need for time-consuming installations. For international companies with teams in China, this gives your headquarters quick and easy access to the relevant financial information of your China team.
Facilitate Collaboration Easily in China
Using a cloud-based accounting program in China simplifies collaboration with your accountant. The cloud infrastructure streamlines the generation of reports that your accountant may require from you. Furthermore, your accountant can have direct access to the software, enabling them to retrieve your financial data whenever necessary. With an online accounting program, you have control over the level of access to financial information that you grant to your employees.
Enhance Accounting Accuracy
Cloud-based accounting systems in China offer a reduced risk of accounting errors as all important financial information is consolidated in a single location. By consistently inputting expenses and income and categorizing transactions, you can effortlessly generate precise reports whenever needed and reduce the risk of error.
Unlike using spreadsheets like Excel, you don’t need to familiarize yourself with various accounting practices, formulas, or shortcuts. Simply ensure that you correctly and regularly input your income and expenses to obtain accurate reports. This eliminates the complexity associated with manual calculations and minimizes the chances of errors occurring in your accounting processes.
Real-time Data View
Having your financial data stored in the cloud allows you to obtain a comprehensive and up-to-date view of your current financial situation. This enables you to make well-informed decisions regarding the financial future of your business in China. In contrast, using traditional accounting methods would require manual searching through numerous pages of information to access accounting data reports.
Cloud based accounting empowers you to stay updated on key financial metrics, monitor performance, and make timely strategic decisions. By leveraging the benefits of cloud technology, businesses in China can maintain a competitive edge and respond effectively to market dynamics.
What are the Challenges of Cloud Accounting in China?
Lack of Expertise
In some instances, members of the accounting team in small enterprises in China may lack the necessary expertise to effectively manage cloud accounting tasks. Those who are accustomed to traditional accounting methods may face challenges in navigating the cloud accounting software, thus limiting their ability to fully utilize the software’s features.
In order to address this issue, there are a couple of potential solutions. One option is to provide comprehensive training to your existing staff, equipping them with the knowledge and skills needed to navigate and leverage the functionalities of cloud accounting software.
Alternatively, you may choose to outsource accounting services to a professional provider who possesses the expertise necessary to handle your financial information accurately and efficiently. By outsourcing, you can ensure that your accounting needs are managed by experienced professionals who are well-versed in cloud accounting practices in the Chinese context.
Ensuring Compliance in China
In addition to selecting a cloud accounting solution that aligns with the specific demands and requirements of your business, it is essential for your company to remain compliant with the accounting principles applied in China.
Your business must also adhere to regulations governing the transfer of data and the distinction between data that can be stored in the cloud and data that must remain in-house. These rules serve to uphold the proper management of information within your organization’s cloud infrastructure, promoting order and mitigating any potential legal complications. By following these regulations, you can maintain data integrity and protect the privacy and rights of your company and customers.
According to article 36 of “Standards for Enterprise Accounting Informationization” (Caikuai (2013) No. 20), If the data server is hosted overseas, a backup of the accounting information must be kept in China, and the backup frequency must be no less than once a
month. The accounting data backed up in China should be able to independently meet the needs of the enterprise to carry out accounting work and be adequate for external accounting supervision when the overseas server cannot work normally.
Not Localizing your ERP system
for local auditors it can be difficult to review accounting data in overseas software, so a local copy of the accounting data in a local system such as our ERP system, Kingdee or Yongyou is generally advised to facilitate the audit. Having a localized version allows auditors to easily access and review accounting data when needed. Generally, it is possible to run two types of accounting, one locally in a local system to satisfy local regulations and facilitate the statutory audit, and a second accounting book in the headquarters’ system.
Managing change can be a challenging task, and the transition to a new software system, mindset, or process is no exception. In order to ensure a successful change effort in China, education and effective communication play vital roles. It is crucial to provide comprehensive training and educational resources to equip individuals with the knowledge and skills needed to adapt to the change.
Additionally, effective communication channels should be established to keep stakeholders informed and engaged throughout the transition process.
Appointing an internal or 3rd party facilitator as a project leader can help guide the team through the change, address concerns and resistance, and provide the necessary support and guidance to overcome challenges.
By prioritizing learning, effective communication, and streamlined processes, organizations in China can increase the likelihood of achieving successes in line with the ambitions of a headquarters.
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Best Cloud Based Accounting in China
The Business Central cloud accounting solution provides a comprehensive set of features that fulfill various requirements, including security, reliability, technical support, customer service, and user-friendly interface. Our comprehensive ERP system is locally stored, fully compliant and easy to use with local auditors.
Find out more about the benefits of our cloud-based accounting platform. Click here, request our ERP brochure and begin your journey today!
