In this course · 1 of 7
Course 4
Keep your books monthly
7 lessons · 7 min
- 1How often should a Hong Kong company update its books?
- 2How to Record Accounts Receivable and Payable in Hong Kong
- 3Bank Reconciliation: Why Hong Kong Businesses Should Do It Monthly
- 4How to Account for Fixed Assets and Depreciation in Hong Kong
- 5Accounting Depreciation vs Tax Allowances in Hong Kong
- 6How to Account for Inventory and Stocktake in Hong Kong
- 7What are management accounts, and does a Hong Kong SME need them?
The short answer
Update your books at least monthly: the law requires records that show your position accurately at any time (Companies Ordinance (Cap. 622) s.373), and for records kept abroad, accounts and returns every 6 months at most (s.374(3)). In practice, monthly updating with a bank reconciliation is the sensible standard for most SMEs.
What the law says
- Section 373: accounting records must disclose, with reasonable accuracy, at any time, the company's financial position and financial performance, and must include daily entries of money received and spent.
- Section 374(3): where records are kept outside Hong Kong, the accounts and returns kept in Hong Kong must show the financial position at intervals of not more than 6 months.
There is no statutory instruction to post entries on a particular day, but a record that is months behind cannot satisfy the "at any time" test.
Practical rhythm
| Frequency | Tasks |
|---|---|
| Weekly | capture invoices, bills and receipts; chase receivables |
| Monthly | reconcile bank and credit cards; run payroll and pay MPF by the 10th; review ageing reports; produce a short management summary |
| Quarterly | review fixed assets, accruals and director balances; prepare for tax instalments if relevant |
| Yearly | closing adjustments, stocktake, audit, financial statements, and filing |
Why monthly works. Errors are fresh, supporting documents are easy to find, and the MPF and other deadlines are not missed. It also keeps year-end costs predictable.
If you have fallen behind, start a catch-up plan now (see the answer on catching up when a company's books are years behind).
Legal basis and sources
The law
- Companies Ordinance (Cap. 622), ss.373-374
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
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