Earnest Advisory

How to effectively compile accounting records in the era of tax big data

With the help of Golden Tax system, today tax authorities can easily find out underlying problems of the enterprises based on their declaration records. For entreprises, it is important to prepare basic accounting records that can reasonably reflect the financial status of the enterprise and effectively respond to the follow-up queries of the tax authorities. During my work, I often and still see mistakes in the following topics:

1. Main business income and changes on accounts receivable do not match

2. Main business cost and inventory changes do not match

3. Expenses fluctuate greatly by month, and are basically recorded according to invoices, lacking necessary amortization and withholding.

4. Depreciation of fixed assets does not match the depreciation in the income statement

5. The income recorded in the accounting statements is inconsistent with the income reported in the tax declaration.

6. The items of account current stays on account for a long time, especially when there is a large amount of personal transactions.

Those irregular operations mentioned above, once spotted, clearly reveals the underlying problems of the enterprise and at the same time, help tax authorities locate the audit focus. The most economical way to avoid these risks is to do a good job in basic accounting work and establish a systematic accounting process. Entreprises should concern the following points:

1, Hire professional accountants.

2, Collect the account information in a timely manner, including invoices, bank statements, etc.

3, Do not accumulate all the accounting records of the current month till the end of the month, and remember to always reserve sufficient time for accounting records review

4, Expenditures without invoices should also be amortized and withheld reasonably. For example, the rent may be paid every few months, and it can be withdrawn every month according to the contract to ensure a stable expense monthly.

5, Pay attention to large and sudden expenditures, and determine whether to capitalize them or book them as expenses according to the situation.

6, Make full use of tax rules and delay the tax time. For example, when prepaying income tax, try to defer all income tax payment until the time of final settlement, in order to enable efficient use of corporate cash.


Consolidating basic accounting work and reducing tax risks will enable enterprises to reduce unnecessary or even ineffective expenditures on government relations in the future, and can also allow enterprises to concentrate on their main business and further development.

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