If you are rolling out NetSuite for China, you will need to be aware of the following major issues:
1.Ensuring tax reports generated by NetSuite are compliant with China GAAP
2.Managing data transfer between NetSuite and China’s “Golden Tax” VAT Invoice generation systems to ease workloads and achieve better control and compliance
3.Managing the transition from commonly used local accounting systems in China (Yonyou and Kingdee) to NetSuite.
4.Challenges commonly faced during NetSuite implementations in China, including:
We recommend that instead of integrating NetSuite with Yonyou or Kingdee, managing your business data entirely on NetSuite and transitioning away from these legacy applications is a more beneficial long term strategy. NetSuite and related 3rd party add-ons can completely replace the critical functions offered by Yonyou and Kingdee for China finance.
With add-ons like Trigger Networks’ China GAAP reporting and Golden Tax integration solutions, NetSuite fully covers the essential functions offered by Yonyou and Kingdee for China finance management. This overlap in function makes it redundant (and more costly) in the long term to continue using either of these systems in parallel with NetSuite.
It is common for companies to consider integrating NetSuite with their existing Yonyou or Kingdee system. While it is possible to integrate these systems, the long term value of integrating separate erp applications is limited, as managing two separate erp systems simultaneously can be a significant burden on companies of any size. NetSuite is designed to allow companies to manage financials for all their global entities on a single, highly secure platform, and avoid managing separate accounting applications for each of their global entities.
As a result, we have not invested resources in developing connectors to local Chinese applications like Yonyou and Kingdee. Instead, we have developed a portfolio of localization solutions that enable NetSuite users in China to retire legacy accounting systems and manage all their financial data on a single global platform.
For more information on how to manage the transition from legacy applications like Yonyou and Kingdee to cloud solutions like NetSuite, and for more more information about our China GAAP and Golden Tax integration solutions, please contact Trigger Networks directly.
NetSuite supports multiple languages that can be set according to personal preference, so while one user will be able to see his interface in English, a different user will be able to see the same interface in Chinese.
IF you are using NetSuite to manage finances for a subsidiary in China, you may require a solution to adapt your Chart of Accounts, report language and report templates to comply with China GAAP requirements. China’s Ministry of Finance requires all business entities in China to provide financial reports according to a specific template, including a stipulation that all accounting vouchers should contain a P.R.C. GL account number and its Chinese description.
Example: 1001 - The first 4 digits of the Petty Cash Account NetSuite’s standard functions cannot fully satisfy the requirements of this financial report template, so Chinese entities with significant volumes of financial data will require a data automation solution to generate report templates from NetSuite that satisfy China GAAP requirements.
Income statements and balance sheets must be in a specific format. Additionally, the following are example changes that are required to ensure vouchers comply with China GAAP:
Translating voucher descriptions to Chinese
Converting to PRC Account Name
Separating Debit AMT / Credit AMT
Creating a PRC voucher number
Converting to PRC voucher date format
Because tax reports require quite detailed changes to fit the desired format, converting reports manually can be an extremely time consuming task for financial staff using NetSuite in China.
Trigger Networks provides a solution developed on NetSuite’s cloud platform that allows companies to generate China tax reports directly from NetSuite with several button clicks. Reports generated using our solution are displayed in a format that fully complies with the tax reporting requirements stipulated by China’s Ministry of Finance.
The following localized reports must be provided to the tax authorities to comply with China tax law and financial audit requirements.
These reports include:
Balance Sheets
Profit/Loss reports
Voucher Print Out
Ledger Print Out, including:
General Ledger
Sub Ledger
Diary Ledger
Localized versions of each of these reports can be generated from within NetSuite using Trigger Networks’ China GAAP solution.
A certificate of compliance, referred to in Chinese as “Bei An 备案” is required for all entities paying tax in China. Trigger Networks’ finance localization services include the option to assist companies with the application of China’s tax compliance certificate.
This compliance certificate does need to be updated every time you update a new account?
No this is not necessary
No. Our solution is designed as a software code bundle that runs in parallel with the normal standard financial reporting functions available on NetSuite. The solution will not affect any of the normal report generation tasks performed using NetSuite, including consolidated report generation or report generation for subsidiaries in different global regions.
We update our China GAAP solution at least once a year and maintain a roadmap listing the functions we plan to add to our solution in the future to ensure users continue to enjoy a best-in-class tax reporting solution for China. We also offer ongoing support plans to help users with new staff training, assistance with adding new accounts and other technical support.
Trigger Networks is a member of NetSuite’s SuiteCloud Developer Network (SDN). As an SDN partner we are committed to complying with NetSuite’s standards for application development and coordinate closely with NetSuite’s technical team to ensure our application can accommodate NetSuite’s yearly major software updates.
Because our solution is built directly on NetSuite, users can generate China tax reports without having to log in to a separate application. Our solution allows NetSuite users to keep all their financial data on a single platform, rather than transferring data between NetSuite 3rdparty applications.
This eliminates concerns related to data synchronicity between two systems. Because the solution is built on NetSuite, it also allows us to take full advantage of NetSuite’s software infrastructure, including security standards, data back up measures and system availability guarantees, all of which are much more robust than anything that can be provided by a solution installed on local hardware.
Our China GAAP solution is currently billed as a stand-alone project implementation, with an optional yearly support plan. The number of subsidiaries that require China GAAP a tax reporting solution will also directly impact the workload of this project and associated costs. To anticipated investment requirements, it is therefore important for us to understand how many subsidiaries will require the solution for the initial implementation and in the future.
If you are doing business in China, you need to be familiar with “Golden Tax”, the system used by the Chinese government to monitor and control the tax paid on any transaction.
This means that any business providing goods or services that are subject to China’s value-added tax are legally required to issue VAT invoices, known as “fapiao” (发票) using the Chinese government-certified “Golden Tax System” (GTS). This system consists of software, electronic printing and specialized numbered invoicing paper designed to prevent counterfeiting.
Companies with entities in China therefore need to apply for permission from the Tax Authority to issue VAT invoices (fapiao) using the Golden Tax System, and must also purchase the software and devices that are authorized to print fapiao.
Seller:
B2B Busineses are legally required to issue VAT fapiao for every good or service that they sell in China. (note that businesses are required to issue the fapiao relevant to their industry e.g. “service”, “food & beverage”, etc.)
Businesses selling a good or service keep a copy of a fapiao for bookkeeping and auditing purposes
Buyer
Companies:
B2B buyer companies use VAT fapiao to apply for deductions on corporate tax related to company expenditures
Bookkeeping + auditing purposes
Individuals:
Individuals need to submit VAT fapiao to successfully apply for certain types of expense reimbursements from their employer, (though not all expenses require a VAT invoice; some, such as taxi fares, can be expensed with a different type of invoice).
1.Two red chops - one from the tax authority and one from the finance department of the issuing company
2.The characters “发票” in header
3.Unique Fapiao Number (发票号码)
4.Must be printed on specialised paper issued by Tax Department
5.All items in the invoice must be completed consistently with the terms of what was actually supplied.
6.The company that purchased the good or service must also be written on the invoice.
7.Letters in the VAT invoice must be legible and completed properly.
8.The invoice must be issued at the time the VAT liability arises.
9.Invoices can only be issued in Chinese Yuan/Renmimbi (“CNY” or “RMB”), not in any other currency.
10.All fapiao are printed in 3 copies:
Bookkeeping copy – the bookkeeping voucher for the issuer;
Deduction copy – the tax deduction voucher for the customer who made the purchase; and
Invoice copy – the bookkeeping voucher for the customer who made the purchase
NB: All prices include business tax. Fapiao does not impact pricing in legitimate businesses.
If your company is issuing a large number of fapiaos for goods and services sold every day (50+), this can create a heavy workload for your finance team when it is time to record this data in your accounting system. It may be necessary to automatically synchronize the invoice data in your Golden Tax system with your ERP or accounting system. This can help you achieve the following benefits:
Reduce the risk of human error
Time costs savings by reducing the manual workload of your finance team
Facilitation of company audits and real team, accurate finance reports
If your company only issues a small number of fapiaos on a daily basis (>50), it may be more cost effective for your finance team to enter the data manually until the volume of your business transactions requires an automated solution.
There are several locally developed software applications for China finance management that integrate with China’s Golden Tax System. However, companies that already have a global enterprise data management system are often unwilling to purchase another local accounting system and run it in parallel with their existing solution.
The ideal solution for most companies is a solution that integrates the Golden Tax System with their existing ERP application, to automate data transfer from one system to the other. Integrations with your existing ERP application can achieve the following benefits:
You can avoid the extra costs of purchasing a finance application just for China operations
Avoid data duplication and discrepancies caused by maintaining 2 separate systems
Ensure “single version of the truth” by conveniently managing your critical financial data on a single system.
In the same way that ChannelAdvisor allows NetSuite to integrate with multiple marketplaces (Amazon, Ebay, etc.), Trigger can help NetSuite customers deploy solutions that integrate NetSuite with all major China e-commerce platforms, including T-Mall, Taobao, Alibaba, WeChat, and JingDong among others.
NetSuite users in China also need to be aware that due to the unique nature of doing business in China, it is necessary for companies to apply on an individual basis to T-Mall for permission to integrate their ERP with the platform, after they have successfully set up their T-Mall online store.
Contact Trigger Networks today to speak to a consultant and understand more about how NetSuite China E-Commerce integrations are achieved.
There are no existing integrations with Chinese POS machines in NetSuite’s standard functions, but local developers like Trigger Networks can help NetSuite users in China to integrate with local POS systems using NetSuite’s flexible developer APIs
There are a number of options available for NetSuite users wishing to integrate with China payment gateways service providers such as Alipay. Please contact Trigger Networks for further detailed information and to share your specific requirements.
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