This guide is vendor-neutral. It sets out what the record-keeping rules ask of a business, which parts of the work AI tools do well, and which parts stay with people however the books are kept. For how Suma itself uses AI, see our page on AI accounting software; for the record-keeping rules in full, see our guide to bookkeeping requirements for Hong Kong companies. Every rule below is linked to the official page it came from.
The rule does not change with the tool
Section 51C of the Inland Revenue Ordinance requires every person carrying on a trade, profession or business in Hong Kong to keep sufficient records, in English or Chinese, of income and expenditure so that assessable profits can be readily ascertained, and to retain them for not less than 7 years [1]. The IRD's guide counts the 7 years from the transaction date, and the duty continues after you cease trading until that period has run [2]. The law names no bookkeeping method. A paper cash book, a spreadsheet, accounting software or an AI tool can each hold the records; what the law tests is whether the records are sufficient.
For a limited company the Companies Ordinance adds its own duty. Section 373 requires accounting records sufficient to show and explain the company's transactions and to disclose its financial position with reasonable accuracy at any time, and section 377 requires them to be preserved for 7 years after the end of the financial year to which the last entry relates [4]. The liability for both duties lands on people: a director who fails to take all reasonable steps to secure compliance is liable to a fine of HK$300,000 [4].
| Rule | What applies | Source |
|---|---|---|
| Keeping business records (Inland Revenue Ordinance, s51C) | Sufficient records of income and expenditure, in English or Chinese, kept for not less than 7 years | [1] |
| When the 7 years start (IRD guide) | From the transaction date; the duty continues after you stop trading | [2] |
| Records kept on a computer (IRD guide) | Keep the source documents behind the entries, and back the system up | [2] |
| Failing to keep records without reasonable excuse (s80(1A)) | Fine of HK$100,000 | [1] [3] |
| Company accounting records (Companies Ordinance, s373) | Records that show and explain the transactions and the financial position at any time | [4] |
| How long a company preserves them (Companies Ordinance, s377) | 7 years after the end of the financial year to which the last entry relates | [4] |
| Director failing to take all reasonable steps to comply (s373(5), s377(3)) | Fine of HK$300,000 | [4] |
| Audit of a company's financial statements | Required for all companies, including those within the reporting exemption, except dormant companies | [5] |
What AI bookkeeping can do
The useful work AI does in bookkeeping is reading and suggesting. The common tasks are these:
- Read receipts and invoices. A tool can pull the date, the supplier and the amount from a photo or a PDF, so nobody types them in. The document itself still has to be kept: the IRD's guide asks for the source documents behind the entries even when the books are on a computer [2].
- Suggest categories. A tool can propose the account a line belongs in, based on the supplier and on how similar lines were treated before. A suggestion is a starting point that a person accepts or corrects.
- Match bank lines. A tool can pair each line on the bank statement with an invoice, a receipt or an entry already in the books, and list what is left unmatched. Matching the statement to the books is how you find the entry that is missing from one or the other.
- Draft reports. A tool can lay out a profit and loss statement, a balance sheet or a list of unpaid invoices from the entries it has. A draft is only as complete as the records it is drawn from.
Each of these saves typing and catches mistakes earlier. None of them changes what has to be kept, or who answers for it.
What AI bookkeeping cannot do
Take legal responsibility. The section 51C duty sits on the person carrying on the business [1], and the Companies Ordinance duties sit on the company and its directors [4]. A director has a defence if they had reasonable grounds to believe a competent and reliable person was charged with keeping the records and was in a position to do it [4]. Software can help that person do the work; choosing a tool does not move the duty off the business.
Sign an audit. The Companies Registry states that audit is required for all companies, including companies falling within the reporting exemption, except dormant companies [5]. The audit is carried out and reported on by the company's auditor. A tool can prepare the schedules and documents an auditor asks for; it cannot be the auditor or sign the report.
Decide a tax position. Whether a receipt is taxable, whether an expense is deductible and how a year's profit is computed are judgments the business makes and answers for in its return. The law's test is that the records let assessable profits be readily ascertained [1], which means the records must support whatever position is taken. A tool can show what is in the books; the position is a decision for the business and its advisers.
Make the records complete. A tool reads what it is given. Cash that never reaches the bank, or a receipt that is never photographed, is missing from its books too. The IRD's guide recommends separate bank accounts for business and personal money, and recording separately any money the owner puts in or takes out where they are not separate [2].
Questions to ask any AI bookkeeping tool
These questions apply to any tool, ours included. They follow from the rules above:
- Can I get everything out for 7 years? The records and the documents behind them must be retained for at least 7 years [1] [2], which can outlast a subscription. Ask how you export the full ledger and every document.
- Does it keep the source document with each entry? The IRD's guide asks for source documents even when the books are on a computer [2].
- Is it backed up? The IRD's guide asks for computer records to be backed up [2]. Ask where the copies are kept and how a restore is done.
- Who confirms a posting? Ask whether a suggestion goes into the books on its own or waits for a person, and whether an edit leaves a trail of what changed.
- What is sent to an AI model? Ask which data leaves the system, to whom, and whether names are removed first.
- Who reviews and files? Ask who prepares the accounts for audit and the tax return, and whether that is included or quoted separately.
How Suma handles this
Suma uses AI to build and maintain an accounting app around how your business runs. This is what it does today towards the duties above:
- Deterministic postings. Every posting follows fixed accounting rules into double-entry books with 4-digit account codes, not a model's guess.
- An edit trail. Every edit is a void and a re-create, so the record of who changed what is kept rather than overwritten.
- Receipts and documents vaulted against the books, so each entry keeps the source document that substantiates it.
- A read-only assistant. The in-app assistant answers questions about your own books and cannot change them. Names are removed before text is sent to an AI model.
- A filed year locked against edits, so the records behind a filed year stay as they were filed.
- Review and filing by people. Review, audit and statutory filing go through our partner CPA firm, W. M. Sum & Co., quoted separately.
No tool, Suma included, carries the record-keeping duty for you. It stays with the business and, for a company, its directors [1] [4].
Frequently asked questions
Is AI bookkeeping allowed in Hong Kong?
Yes. The law names no bookkeeping method. Section 51C of the Inland Revenue Ordinance asks for sufficient records of income and expenditure, in English or Chinese, kept for at least 7 years [1]. If the books are kept on a computer, the IRD's guide says the source documents such as invoices and bank statements must still be kept, and the system backed up [2]. An AI tool that meets those terms can hold the records; the duty itself stays with the business.
How long do I keep records if an AI tool keeps my books?
The same as any other way of keeping them: at least 7 years. The Inland Revenue Ordinance requires records to be retained for not less than 7 years [1], which the IRD's guide counts from the transaction date [2]. A company must also preserve its accounting records for 7 years after the end of the financial year to which the last entry relates [4]. Check that you can export everything before you stop using a tool.
Who is responsible if AI bookkeeping software gets an entry wrong?
The business. The section 51C duty sits on the person carrying on the business, and failing to keep sufficient records without reasonable excuse carries a fine of HK$100,000 [1]. For a company, a director who fails to take all reasonable steps to secure that the company keeps its accounting records is liable to a fine of HK$300,000 [4]. Choosing a tool does not move that duty, so someone has to check what the tool posts.
Can AI bookkeeping replace an accountant or an auditor?
It can replace a lot of typing, not the people the law relies on. Audit is required for all companies, including those within the reporting exemption, except dormant companies [5], and the auditor signs the report, not a tool. Tax positions are judgments the business makes in its return. At Suma, review, audit and statutory filing go through our partner CPA firm, W. M. Sum & Co., quoted separately.
General information current as of 30 October 2026. This is not legal, tax or accounting advice. Confirm the current requirements with the IRD, the Companies Registry or a licensed practitioner.