3 Types of Accounting Services in China
Like in most places, accounting, compliance, and bookkeeping are the bread and butter of many accounting firms. However, certainly, not all are equal when it comes to the efficiency, accuracy, and risks involved in the services delivered. Some business models even prohibit accounting firms from providing any value-added services beyond the basic accounting and compliance services. This is due to the way China’s accounting industry has developed over the years and the technologies that developed alongside it.
China is unique in a way that it used government-issued tax invoices – fapiaos – as the gold standard for accounting for many years. Fapiaos for a long time were the primary means through which the tax authorities collected tax revenue. They played a leading role in shaping accounting methodology and policies still widely in use today.
In practice, many accountants have been slow to develop their skills beyond the bare minimum fapiao accounting methods. Those who have embraced modern accounting technologies have been able to better collaborate with their clients and provide greater value, similar to that in advanced countries. However, those who have successfully adopted technology into their accounting practice are still few in number.Currently, three types of accounting firms make up the large majority of China’s accounting industry; bare-minimum fapiao accounting firms, manual accrual firms, and cloud-based accounting firms.
