Keeping of Accounting Records
Though out my past 20 years of experience in the Professional Accounting industry, many successful businessmen will have a headache when come across the “Keeping of Records” for the accountants. Many of them just didn’t understand the reason for keeping those tedious, small, easy losing receipts.
There are many reasons for keeping the records. I pick two of them to share with you.
Firstly, it is a statutory requirement. Section 51C of Inland Revenue Ordinance (Cap. 112) states that “…every person carrying on a trade, profession or business in Hong Kong shall keep sufficient records in the English or Chinese language of his income and expenditure to enable the assessable profits of such trade, profession or business to be readily ascertained and shall retain such records for a period of not less than 7 years after the completion of the transactions…”
Secondly, from the business management standpoint, all the financial statements come from these source documents. The better the quality of the records you have, the better the quality of the reports will be, the better the analyzes you can have! It is the era of big data. We are not facing the issue of not having enough information. On the contrary, we are overwhelmed by the information & the challenge is how we handle the information in a more effective and efficient way!
There are a lot of tools we can use for keeping the records. Cloud accounting system is my choice. Take QuickBooks Online (“QBO”) as an example. Every single transaction can store a maximum 25MB of attachments of all kinds of documentary files. I can’t find any other similar software better than it.