Bookkeeping in Hong Kong: a complete 2026 playbook.

Hong Kong limited companies are required to keep proper books and records under the Companies Ordinance and the Inland Revenue Ordinance. In practice that means three things: every transaction must be recorded, every record must trace to a source document, and every bank movement must reconcile to your ledger.

You have flexibility on the format — paper, spreadsheets or accounting software all qualify. What you don’t have flexibility on is retention: records must be kept for at least seven years after the transaction is completed.

• Daily entries — sales, purchases, expenses, payments received and paid.
• Monthly reconciliations — every bank, credit card and merchant account.
• Annual financial statements — prepared in accordance with HK GAAP.

Your chart of accounts is the spine of every report you’ll ever run. Get it right early and the rest is mechanical; get it wrong and you’ll be re-mapping for years.

For HK SMEs we recommend starting with five top-level groups (assets, liabilities, equity, revenue, expenses) and resisting the urge to over-segment until your business demands it.

• Use 4-digit account codes (1000–5999 by group) — leaves room for sub-accounts.
• Separate operating expenses by function, not vendor (e.g. “Cloud infrastructure” not “AWS”).
• Keep a single MPF account for payroll deductions; reconcile against the MPF trustee statement monthly.
• Maintain a dedicated FX gain/loss account if you transact in non-HKD currencies.

The expectation in Hong Kong is straightforward: any record that affects the numbers in your financial statements and filings must be available on request. That’s broader than it sounds.

• Sales invoices, credit notes and the underlying contracts.
• Purchase invoices, receipts and supplier statements.
• Bank statements, deposit slips and cheque counterfoils.
• Payroll registers, MPF contribution statements and director loan agreements.
• Inventory counts (if you hold stock) and asset registers (if you depreciate).

A bookkeeping function that closes monthly is one that survives audit. The discipline matters more than the speed — though modern AI tooling now makes both possible.

• Reconcile every bank account to the day-end balance.
• Match every invoice to a payment or aging bucket.
• Review and post any accruals, prepayments and depreciation.
• Run a flux analysis against the prior month — investigate variances over a threshold.
• Lock the period in your accounting system before producing reports.

After hundreds of HK engagements, the same handful of mistakes keep showing up.

• Mixing personal and company expenses on a director’s card with no reconciliation.
• Treating a bank movement as evidence — it isn’t, without an underlying invoice.
• Booking FX-denominated invoices at the settlement rate instead of the invoice-date rate.
• Letting the period stay open after reports are issued.

AI doesn’t replace the discipline above — but it removes 80% of the manual labour. An AI accounting agent like HeyBen works from imported bank data, codes transactions against your COA, scans receipts, and prepares the monthly close ready for human review.

The reviewer’s job stays the same: judgment, scope and sign-off. Everything else moves to the agent.