Shanghai Company Situation

Company Structure:

? Operates as a WFOE in Shanghai China, with is HQ in Finland

Company Business: 

? Specialises in the production of micro processor controlled high frequency dental X-ray equipments and dental treatment units and their components

? Exports the equipments, units and components to the HQ, where the price is defined by the HQ itself based on the internal transfer pricing rules

Company Staff: 

? 10 employees in the Administration Department

? 60 employees in the Manufacturing Department

Company Current Situation: 

? Seeking accounting outsourcing services, starting from January 2015

? The accounting services consist of the following:

1)Accounting Bookkeeping 

2)Tax Filing

3)Group Financial Consolidation

4)Payroll

5)Statistic Reporting

6)Trading Monitoring System Declaration

7)Export VAT Refund (EVR) Application

Company Current Issues: 

? No detailed accounting transaction records kept

? Inefficient accounting system 

RTF Solutions

1.Inventory Valuation 

? RTF will keep records of all the raw materials, direct and indirect costs involved in the manufacturing for each semi-finished product and finished product.  For example, the amount and cost of different raw materials used, direct and indirect costs involved in the making of X-ray equipments, dental equiment, etc.  Having a detailed record of each product costs at the manufacturing stage will help Planmeca to set a profitable price for the finished product.

2.Inventory Control

? RTF will distinguish and record all the different raw materials, semi-finished products and finished products to guarantee the materials and products entered by the inventory management staff in the inventory warehouse are consistent.  

? With controlled inventory system, there can be a better flow of inventory, that is, there can be better adjustments and estimates in the purchases of raw materials and production process, which will facilitate the sales process.

3.Account Receivables and Account Payables

? RTF will record transaction following a secondary classification system and maintain good and detailed records of the subsidiary ledgers based on transaction date, contract amount, invoice amount, payment/receipt amount, etc.  

? RTF will also issue account receivables aging. This can then help Planmeca to make prudent decisions about whether or not to keep doing business with customers that are chronically late payers.

4.Ufida U8

? RTF also uses Ufida 8.  Using Ufida 8 will allow Planmeca to directly check its financial data online at any time and any place and to keep track of its current financial situation.

5.GAAP converting and reporting

? RTF has a vast understanding of the international GAAP/ IFRS and will convert the PRC GAAP financial statements to the required GAAP/ IFRS financial statements for consolidation purposes.  

? Apart from that, based on Planmeca’s financial situation, RTF will provide solutions and suggestions to improve the company’s overall situation.  For e.g., ways to reduce taxation, ways to benefit from different financial subsidies, etc.

? Attached is a template of a financial management statement prepared by RTF, for reference only.

Note: Other templates can be sent to Planmeca after cooperation, if required.