Japan Accounting & Bookkeeping Services

JTAX Provides a Comprehensive Range of Japan Accounting and Bookkeeping Solutions.

Japan Accounting & Bookkeeping Services: Overview

Our Japan Accounting & Bookkeeping Services are a key component of JTAX’s Japan Outsourcing Services.

JTAX ensures that transactions are properly recorded for Japanese statutory purposes and that timely financial reporting is provided to foreign management.

Important features of our Japan Accounting & Bookkeeping Service include:

  • 1We obtain data about payments and receipts directly from your Japan bank account.
  • 2We accrue and record non-cash items such as compensation and benefits, Japanese corporate taxes (both provisional and final), depreciation, etc.
  • 3We maintain Japanese statutory accounts (in Japanese) to satisfy Japanese regulatory requirements (including attachment to the Japanese corporate tax return.)
  • 4We provide financial reporting (usually on a monthly basis) to the foreign parent company.

Please Contact Us for more information about our Japan Accounting & Bookkeeping Services.

Download our Japan Outsourcing Guide

Download JTAX’s Japan Outsourcing Guide.

Japan Accounting & Bookkeeping Services - FREQUENTLY ASKED QUESTIONS

What are the Key Steps in Setting up the Japan Accounting & Bookkeeping Service?

Setting up our Japan Accounting & Bookkeeping Serviceinvolves two basic steps:

1. Initial client consultation

Our initial consultations focus on gaining an understanding of each client’s unique accounting and bookkeeping requirements. We confirm the format of monthly reporting that will be provided to foreign management (typically on a monthly basis).

2. Initial set-up

Once we have a clear understanding of a client’s requirements, we move on to setting up the Japan accounting and bookkeeping system. This may include:

  • Registering for online banking (in order to directly access bank account data).
  • Registering for automatic payment of certain expenditures.
  • Mapping Japan account codes to those used in the foreign parent company.
How does JTAX’s Japan Accounting & Bookkeeping ServiceWork on a Monthly Basis?

Once initial consultations and the initial set-up have been completed, JTAX commences its monthly service. Typically, this will include:

  • 1Interfacing with a client’s Japanese bank to obtain payment / incoming funds data.
  • 2Ensuring correct recording of non-cash accruals.
  • 3Monthly financial reporting to the client in English using a format determined by the client.
  • 4Maintenance of Japanese statutory accounts (in Japanese) to satisfy Japanese regulatory requirements (including attachment to the Japanese corporate tax return).
What are the advantages of Outsourcing our Accounting and Bookkeeping Functions in Japan?

Key reasons to outsource accounting and bookkeeping in Japan include:

Cost: In most cases, it is dramatically more cost effective and efficient for the Japan operations of foreign companies to outsource their accounting and bookkeeping functions. Japanese finance staff, particularly those with foreign company experience and English language skills, command high salaries. A typical Japan operation is not sufficiently large to properly utilize a full time accountingfunction.

Japan Specific Challenges: Unique language and regulatory issues make it extremely difficult to handle accounting functions from outside Japan.

Operational Issues: The main role of the Japan operation should be to serve customers and drive sales in the Japanese market. An internal accounting functiondiverts limited management resources away from a customer / sales focus.

Internal Control: There are major internal control issues associated with undertaking accountingand bookkeepingwithin the client’s Japan operation.

What are Some of the Internal Control Challenges Surrounding Accounting and Bookkeeping in Japan?

Internal control is a major issue for the Japan subsidiaries of foreign companies.
Key risks in the Japan internal control environment include:

1. Lack of proper oversight when accounting &bookkeeping are handled in-house

Even where the foreign parent is a major corporation and subject to external audit, the Japan operation is often small and therefore not considered significant from an audit viewpoint. As a result, only limited audit procedures (if any) are undertaken. This means that the likelihood of error or fraud being detected is low in the short term.

2. Lack of segregation of duties

Typically, the Japan subsidiaries of foreign companies are relatively small and most employees are focused on sales and customer support. As a result, it can be difficult to implement appropriate segregation of duties.

3. Language differences

Most source documents related to the Japan operation will be written in Japanese. This makes verification by the foreign head office difficult.

Our Japan Accounting & Bookkeeping Service helps foreign management deal with Japan internal control challenges and provides a level of assurance that the Japan operation is running smoothly and free of financial irregularity.

Is JTAX’sJapan Accounting & Bookkeeping Service Cost Effective?

JTAX’s Japan Accounting & Bookkeeping Service provides a cost effective solution for foreign companies in Japan.

The Japan entity will typically have a relatively small head count with most employees focused on customer related tasks. In such circumstances it can be difficult to justify the high cost of a full time, bilingual finance person to support the Japan operation.

Do Independence Issues Restrict JTAX’s Ability to Provide its Japan Accounting & Bookkeeping Service?

Unlike the “Big 4” (and other international accounting firms with offices in Japan) JTAX does not provide audit services. As a result, we are not restricted by audit independence concerns when it comes to providing accounting / bookkeeping services.

When requested, we are able to work with your external auditors to assist in verifying information. Our senior management is drawn from the Big 4 and we have extensive experience dealing smoothly with external auditors.