How should a small Hong Kong business choose accounting software?
Choose software that handles your currencies, keeps a tamper-evident audit trail, produces the reports your accountant needs, and lets you export your data. The law lets you keep electronic records if they can be reproduced on paper and are protected against falsification.
The Companies Ordinance does not name any software. It sets outcomes, so test candidates against them.
Legal and compliance checks
- Reproducible records: electronic accounting records must be capable of being reproduced in hard copy (s.376(3)).
- Falsification safeguards: where records are not in a bound book, the company must guard against falsification and make it possible to discover any (s.376(4)). Look for an audit trail that logs who changed what and locks closed periods.
- Retention: records must be kept 7 years, so check the data stays accessible and exportable if you cancel the subscription.
- IRD electronic records conditions: integrity, legibility, and retention of origin and date details.
Practical checks
- multi-currency support with exchange-rate handling;
- bank feeds or statement import;
- sales and purchase invoicing, receivables and payables ageing;
- fixed-asset and inventory features if needed;
- payroll or a clean link to payroll and MPF records;
- user roles, so the bookkeeper cannot approve their own payments;
- Chinese and English document support if you issue bilingual invoices;
- easy access for your accountant and auditor.
Run a trial with one month of real data before committing.
Legal basis
- Companies Ordinance (Cap. 622), s.376
Sources
Applies to 2026 · Last reviewed 29 October 2026
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.
Related questions
- Does the Business Registration Ordinance require me to keep accounting records?Not directly. The Business Registration Ordinance deals with registering the business and notifying changes, such as a new business address or name, within one month. The duty to keep accounting records comes from the Companies Ordinance (for companies) and section 51C of the Inland Revenue Ordinance (for all businesses).
- How do I choose the financial year end for a new Hong Kong company?Directors can specify the first (primary) accounting reference date, as long as it falls within 18 months after incorporation. If no date is specified, the default is the last day of the month in which the first anniversary of incorporation falls. Choose a date that suits your business cycle and workload.
- How long can a Hong Kong company's first financial period be?Up to 18 months from incorporation, because the first year-end date the directors choose must fall within 18 months of incorporation. If the first period is longer than 12 months, the deadline to lay or send the accounts is extended to the later of two dates set in the Ordinance.
- What is a chart of accounts and how should a small Hong Kong business set one up?A chart of accounts is the numbered list of categories your ledger uses: assets, liabilities, equity, income and expenses. Keep it short, consistent and aligned to the statements you must produce. Separate accounts for director loans, MPF, tax and foreign-currency balances make year-end work easier.
- What are the minimum and maximum relevant income levels for MPF contributions?For monthly-paid employees the minimum relevant income is HK$7,100 and the maximum is HK$30,000. Below the minimum, only the employer contributes. Above the maximum, each side's contribution stops at HK$1,500 a month. Daily-paid staff have levels of HK$280 and HK$1,000 per day.