Multicurrency accounting in Hong Kong
We explain to set up a multicurrency bank account, build a multicurrency accounting system, and integrate it with multicurrency accounting software
What is a multicurrency accounting system?
If you receive and send payments in other currencies than the Hong Kong dollar, you need a multicurrency bank account. You then need to report for these transactions just as you do for all the others. A multicurrency accounting system records transactions in foreign currencies, add them to financial statements and tax reports.
What are the multicurrency accounting standards?
The key part of multicurrency accounting is to show what the transaction was worth in base currency (that is, HKD) when it transpired. That’s why your invoices would usually show both: the foreign currency and its Hong Kong dollar equivalent.
What do I need for multicurrency accounting?
To set up multicurrency accounting, you’ll need:
- A multicurrency bank account. Make sure they process payments quickly and without high currency exchange fees.
- Bookkeeping platform to manage paperwork.
- An accountant who has experience managing multiple currencies to put together reports and statements. Alternatively, you can do it yourself if you have time and know what to do.
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You don’t measure your business by the number of transactions, so neither do we. Our accounting packages are tied to your revenues. Pick a monthly plan to pay a small regular fee or a yearly one and get two months free of charge
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Additional services you may need
- Application for Hong Kong Certificate of Resident Status (Tax residency) HK$1,500
- Nil Profits Tax Return, (BIR51) filing HK$1,000
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FAQ
What is a multicurrency accounting system?
A multicurrency accounting system refers to an accounting system, often an online accounting software, which handles an organisation’s transactions across multiple currencies. It is used for companies that receive or pay amounts in currencies apart from the base monetary denomination used in the country they operate from.
For example, in Hong Kong, a business might have clients in the US or Europe or countries in Asia. Each would transact in their own currency while the company is incorporated in Hong Kong and pays taxes in Hong Kong dollars. A multicurrency accounting system would automatically calculate exchange rates and present all the information in local currency.
Why do I need multicurrency accounting?
If you are a business operating in Hong Kong, then ten to the one you are dealing with several currencies. Hong Kong is a melting pot of companies and entrepreneurs from all over the world. Naturally, money from trading partners and customers flows in and out in a bewildering range of currencies – making accounting complex and extracting reports and insights even tougher.
So if you plan to run your business across nations and manage business transactions in diverse currencies, then you will certainly need a multicurrency accounting system and a multicurrency bank account.
How does multicurrency accounting work with you?
With us, you get Osome platform and a personal accountant. Our multicurrency accounting software allows businesses to add a base currency and specify the country where they file their taxes. The rest of the system is set up automatically. After that, you can add as many as 160 different currencies. The exchange rates are updated every hour automatically, and all transactions are converted and presented in the local currency in real-time.
At Osome, we regularly use multicurrency accounting software to manage our clients’ financial needs. We process your invoices and receipts, prepare financial statements and management reports, file taxes and come up with exemptions and reliefs for your business.
Is it possible for me to hold foreign currency in my business bank account?
To transact in foreign currency, you need foreign currency or a multicurrency account. In Hong Kong, many local and global banks offer this facility.
A multicurrency account allows businesses to transact without paying steep exchange rates and reduce the processing time. All the main banks in Hong Kong offer multicurrency accounts, which is quite a standard feature seeing how it is in a very high demand. Each bank has a slightly different offer, so it’s best to check on their individual sites for detailed information.
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