Case Study : Integrated Accounting Between Hong Kong and China

Integrated Accounting Between Hong Kong and China

Client Profile

Following the successful setup of the Hong Kong company and the WFOE in Mainland China, the client now operates across multiple jurisdictions. As transaction volumes grew, so did the need for transparent, compliant, and connected accounting across both entities.

Overview of the Full Expansion Strategy

This case represents the fourth step in a multi-phase international setup:

1. Company formation in Hong Kong

2. WFOE creation in Mainland China

3. VAT registration in France

4. Integrated accounting across jurisdictions

5. Opening a corporate bank account in China

6. Implementation of Monday.com as a digital backbone

7. Sourcing optimization and supply chain management

Each case is designed to provide a clear view of how ASC Consulting supported the client through every operational layer.

Context & Objectives

The client needed:

• A unified view of their financials in Hong Kong and Mainland China

• Legal and tax compliance across jurisdictions

• Real-time visibility over purchases, sales, intercompany charges, and profit margins

• A system that could support audits and growth, without shortcuts or grey areas

Our Intervention – ASC Consulting managed an Integrated Accounting Between Hong Kong and China

• Xero Setup (HK): Created a detailed chart of accounts in Xero for the Hong Kong entity, linked to local bank feeds and custom financial dashboards

• PRC Accounting Setup (CN): Worked with a licensed Chinese accounting partner to maintain the WFOE’s accounts in accordance with Chinese GAAP and tax law

• Transaction Reconciliation: Established an intercompany invoicing process to reflect services and goods flowing between HK and CN, including transfer pricing documentation

• Monthly Closing & Consolidation: Designed a workflow to align Chinese and Hong Kong monthly closings, enabling a clear group-level profit view

• Compliance First: All revenue, cost, and tax flows were documented and structured to ensure full compliance with local laws, audits, and tax inspections

• Monday.com Sync: Connected financial indicators to operational workflows: quotes, invoices, shipping documents, and payment statuses

Results

The client now has a centralized and real-time view of their financials across China and Hong Kong which can only be done with an Integrated Accounting Between Hong Kong and China

All intercompany flows are tracked, reconciled, and audited, ensuring there is no hidden liability or tax exposure.

We provided a compliance-first structure, avoiding any aggressive shortcuts while still optimizing margins, transfer flows, and supplier terms.

Each purchase and sale is linked to its proper jurisdiction, and VAT, CIT, and audit risks are fully under control.

The business gained stability, credibility, and transparency – key pillars for scaling sustainably and maintaining investor and regulatory trust.

Suggested Next Steps

• Implement quarterly group financial reports for strategic planning

• Benchmark cost structures across suppliers and entities

• Prepare group-level financial statements for future investors

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