Digitization of Accounting (Bookkeeping) in China

In March 2020, the Ministry of Finance and the National Archives Administration issued a Notice* on the reimbursement, entry, and filing of electronic accounting vouchers, which clarified the legal effect of electronic accounting vouchers and the regulations of their reimbursement, entry, and filing. The notice has been taken effect from March 23rd, 2020.

*“Notice on Regulating Electronic Accounting Vouchers Reimbursement, Entry and Filing – CaiKuai (2020) No. 6”

What are the referred “Electronic Accounting Vouchers”?

Electronic accounting vouchers refer to various types of accounting vouchers received by the Company from the outside in electronic form, including:

– Electronic invoice

– Financial E-receipt

– Electronic ticket (E-ticket)

– Electronic itinerary (E-ticket itinerary)

– Electronic payment certificate specialized for Customs

– Bank electronic receipt

– Other electronic accounting vouchers

How to use electronic vouchers for bookkeeping?

1. Only using electronic accounting vouchers

The Company can only use electronic accounting vouchers for reimbursement, entry, and filing if it can meet all the following 4 major requirements specified in Notice,

(1) The received electronic accounting vouchers are legal and authentic after inspection;

(2) The transmission and storage of electronic accounting vouchers are safe and reliable, and any tampering with electronic accounting documents can be discovered in time;

(3) The accounting system used can accurately, completely, and effectively receive and read the electronic accounting vouchers and their metadata, can complete the accounting calculation by the national unified accounting system, and can output electronic accounting vouchers and their metadata in the format prescribed by the national archives administration. The accounting system can set the necessary approval procedures for handling, reviewing, and approving the electronic accounting vouchers, and can effectively prevent the double-entry;

(4) The filing and management of electronic accounting vouchers meet the requirements of “Accounting Archives Management Measures” (Order No. 79 of the National Archives Administration and the Ministry of Finance) and other related requirements.

2. Electronic accounting vouchers still needed to print on paper for bookkeeping

The Notice requires that if the Company uses the paper printouts of electronic accounting vouchers as the basis for reimbursement and entry, it must save the electronic accounting vouchers in the digital version at the same time.

If you have any further questions, feel free to contact us.