Maintaining financial control and governance in China, in line with both local and international best practice is a major challenge for CFOs. PTL Group’s financial experts support its clients whether they already have an entity in China or not, in managing the financial operation in China. PTL Group’s team assists with implementing the head office policies locally and independently, and report directly to the CFO overseas.
PTL Group is not only a bookkeeping and accounting firm, but a trading company that manages the supply chain and financial transactions for more than 200 clients. Our financial and logistics management expertise lies in hands-on experience accumulated over 20 years of managing trade in China.
Our services – your financial governance:
Bookkeeping and Accounting: Managing a business entity in China requires full compliance with Chinese accounting rules (China GAAP), which are different than the accounting rules in other countries (Western GAAP). PTL Group has many years of experience in managing accounting systems and bookkeeping for western companies’ Chinese entities. We provide financial reporting in accordance with Chinese standards, while making all the necessary adjustments to meet the needs of the overseas CFO.
Financial Management, Budget Planning & Control: We operate as your in-house Finance Manager, Financial Controller or Accountant. We provide you with transparent and clear accounting reports.
VAT Refunds and Tax Reductions: Not only does the Chinese financial management system differ from the rest of the world, but the biggest challenge is keeping up with the constant changes to government policy and regulations. PTL Group’s experienced finance department will facilitate your VAT refunds and apply for tax reductions for your business in China.
ERP Management: PTL Group’s team is experienced with implementing and managing various ERP systems (Priority, Oracle, SAP, MFG and others). If required, PTL Group’s team can implement the client’s ERP system in China to manage and record the activity allowing immediate access to the data in China.
Advanced Management Report: Preparation of advanced managerial reports such as yearly budget, P&L, cash flow and other reports as required by the head office.
Tax Planning and Compliance: We help you prepare for local tax audits, in compliance with the latest rules and regulations.
Special Projects: We tailor individual service projects for specific company needs, such as data systems upgrading, due diligence processes, potential fraud investigations, subsidiary auditing and turnaround projects, local entity deregistration and more.
Additional Information on Financial Services in China
Chinese vs. International Accounting Standards
Accounting in China differs from accounting in other countries. In spite of the increased alignment with International Financial Reporting Standards (IFRS), Chinese Accounting Standards (CAS) are still slightly different in some areas. For example:
Specification of rules: Not all reports’ subjects are detailed in the same way.
Fiscal year: In China the fiscal year is always set between January 1st – December 31st. However, according to international accounting standards, the fiscal year can begin at any month from which 12 months are counted.
Time of report: In China financial reports are filled on a monthly basis while, according to the international accounting standards, financial reports are filled on a bi-monthly or quarterly basis.
Currency utilized: In Chinese reports the local currency is presented, and transactions in foreign currency are converted to their equivalent RMB rate. However, according to international accounting standards, financial reports can use any currency of choice.
Did You Know?
The difference in accounting standards usually comes into play when HQ asks the Chinese subsidiary to produce and deliver financial reports. The process of translating CAS documents and adjusting them to the IFRS used at the parent company’s books is called Mapping – and is part of PTL Group’s accounting services in China.
Q&A about Financial Management & Accounting in China
How do Chinese Accounting Standards (CAS) differ from International Financial Reporting Standards (IFRS)?
While CAS has increasingly aligned with IFRS, some differences remain. These discrepancies often require translation and adjustment of CAS documents to fit IFRS standards used by parent companies. Large international companies may use specialized software for this purpose, while smaller businesses often hire local experienced third parties to manage their accounting to ensure compliance with both sets of standards. For more detailed information, you can visit the guide on Accounting in China. Read more about Accounting in China.
What types of bank accounts does a WFOE need to operate in China?
A WFOE needs at least two types of bank accounts in China:
- RMB Basic Account: Essential for daily operations, this account allows for RMB cash withdrawals and is used for making tax payments.
- Foreign Currency Capital Contribution Account: Required to receive capital injections from overseas. Approval to open this account can be obtained from the State Administration of Foreign Exchange (SAFE). Read more: WFOE’s Bank Accounts.
What is the process for opening a bank account for a WFOE in China?
RMB Basic Account: This account can be opened at a local Chinese bank.
Foreign Currency Account: Requires approval from SAFE and can be opened at either a Chinese or international bank. The process typically requires documentation, signatures, and chops of the legal representative. In some locations in China, the presence of the WFOE’s legal representative is necessary. The required documentation includes the business license, the legal representative’s ID, and other registration materials. For more detailed information, you can visit the guides on WFOE’s Bank Accounts.
More information about Financial Services in China
