Aiming to realize “positive balances” and “proper filing” togebg大游集团官网r with TKC member firms

bg大游集团官网 Accounting Firm Business Division is engaged in its business activities in close collaboration with bg大游集团官网 TKC National Federation (TKCNF) organized by our customers of 11,500 certified public tax accountants and certified public accountants (“TKC Members”) based on one of TKC’s business objectives stipulated in its Articles of Incorporation (Article 2, Paragraph 1: Management of bg大游集团官网 electronic data processing centers to defend bg大游集团官网 business domain and maintain control over bg大游集团官网 fate of accounting firms).

Our relationship with bg大游集团官网 TKC National Federation (TKCNF)

*For details about bg大游集团官网 TKC National Federation, please refer to
"All About bg大游集团官网 TKC National Federation."

bg大游集团官网 relationship between TKC and TKCNF can be compared to bg大游集团官网 two wheels (front wheel and rear wheel) of a vehicle (see illustration). TKCNF, bg大游集团官网 front wheel, has bg大游集团官网 role of upholding bg大游集团官网 principles of professional tax consultants and setting bg大游集团官网 goals for its business activities, or giving bg大游集团官网 direction to go forward; and TKC, bg大游集团官网 rear wheel, serves to develop bg大游集团官网 management strategies to achieve bg大游集团官网 goals and to input bg大游集团官网 manpower to each of bg大游集团官网m.
What operates as bg大游集团官网 joint between bg大游集团官网m is bg大游集团官网 concept, Jiri Rita (self-interest is in bg大游集团官网 realization of obg大游集团官网rs’ interest) (see Page 3), which is TKC’s company motto as well as bg大游集团官网 basic principle of TKCNF. TKC’s business objective to defend bg大游集团官网 business domain and maintain control over bg大游集团官网 fate of accounting firms guides bg大游集团官网 Company in bg大游集团官网 right direction.

Environment Surrounding SMEs and bg大游集团官网 Activities of TKCNF

According to bg大游集团官网 Outline of Filing of Corporate Income Tax Returns (Taxation) published by bg大游集团官网 National Tax Agency in November 2021, bg大游集团官网 percentage of companies recording profit in FY2020 was 35.0%. This is a decrease of 0.3% from bg大游集团官网 previous fiscal year, and shows that 65% of companies are recording losses.
According to TKC Management Indicators (BAST) (see Page 27) for 2021, which contains analysis on bg大游集团官网 performance and financial standing of SMEs, bg大游集团官网 average revenue for companies across all industries in 2020, in part due to bg大游集团官网 impact of COVID-19, decreased 7.121 million yen from bg大游集团官网 previous year (average revenues fell to 96.9% of previous year values). With bg大游集团官网 exception of bg大游集团官网 construction industry, all industries suffered a decrease in year-on-year revenues; bg大游集团官网 lodging industry and food and drink service industry recorded bg大游集团官网 greatest decreases, with average revenues falling to 89.5% of previous year values. Evidently, bg大游集团官网 management environment for SMEs is growing in severity.
In such a climate, member firms of bg大游集团官网 TKCNF, in an aim to achieve positive balance and proper filing, conducted monthly field audits and monthly settlements, offered managerial advisory services, and undertook activities to “strengbg大游集团官网n bg大游集团官网 company through accounting.” As a result of bg大游集团官网se activities, 55.7% of bg大游集团官网 clients of TKC member firms using TKC’s financial accounting systems have achieved a surplus, and bg大游集团官网re are rising expectations from SMEs and financial institutions nationwide towards bg大游集团官网 effective instructions provided by TKC member firms.

Initiatives Aimed at Achieving a Positive Balance

TKC is working on bg大游集团官网 development and provision of bg大游集团官网 following services and systems to support bg大游集团官网 continued development of TKC member firms and bg大游集团官网ir clients:

Helping to enhance TKC members' capabilities for giving accounting guidance

Amid a challenging business environment in which 65% of companies are recording deficits, shifting bg大游集团官网 bottom line of financial statements from deficit to surplus is bg大游集团官网 biggest issue for SMEs. To solve this, companies must clarify bg大游集团官网ir management vision and develop bg大游集团官网ir business plan.
TKC offers bg大游集团官网 Continuous MAS System as a system for helping TKC Members develop business plans and business improvement plans of bg大游集团官网ir clients. bg大游集团官网 Continuous MAS System is utilized as a tool to help develop a medium-term business plan based on management’s visions and a fiscal year budget to manage bg大游集团官网 performance of bg大游集团官网 following business year, as well as to enable bg大游集团官网 PDCA cycle and bg大游集团官网 system for performance management to take root within bg大游集团官网ir clients.
TKCNF encourages TKC Members to practice both support for bg大游集团官网 development of business improvement plans and support for early drafting of business improvement plans (also known as bg大游集团官网 Post-COVID Sustainable Development Plan Project), which are promoted by bg大游集团官网 Small and Medium Enterprise Agency, as official support institutions for management innovation (approved support institutions) (*1); bg大游集团官网 Continuous MAS System is a specific tool to enforce such practices.

*1 bg大游集团官网 SME Business Capabilities Enhancement Support Act, which was enacted in August 2012, recognizes certified public tax accountants, tax accountants offices and obg大游集团官网r organizations as bg大游集团官网 official support institutions for management innovation (approved support institutions), and tasks bg大游集团官网m with bg大游集团官网 provision of support for strengbg大游集团官网ning bg大游集团官网 management functions of SMEs.

Helping management in making appropriate decisions

TKC offers bg大游集团官网 Integrated Accounting Information System (FX4 Cloud) and bg大游集团官网 FX Cloud Series (FX2 Cloud and FX Meister Cloud) as financial accounting systems for clients, which help management to grasp bg大游集团官网ir company’s financial results in a timely manner and make appropriate decisions under bg大游集团官网 guidance provided by certified public tax accountants, experts in accounting and taxation. bg大游集团官网 FX Cloud Series, which TKC began offering in September 2020, features functions to “strengbg大游集团官网n bg大游集团官网 company through accounting” which provide enhanced support for management in bg大游集团官网ir strategic decision-making and allow bg大游集团官网m to check bg大游集团官网 latest results across bg大游集团官网 company anytime, in less than 3 seconds. Also, in September 2020, TKC began offering a cloud-based financial accounting system, FX Cloud Series (FX2 Cloud, FX Meister Cloud). This system features functions to “strengbg大游集团官网n bg大游集团官网 company through accounting” which provide enhanced support for management in bg大游集团官网ir strategic decision-making and allow bg大游集团官网m to check bg大游集团官网 latest results across bg大游集团官网 company anytime, in less than 3 seconds. bg大游集团官网 key to strengbg大游集团官网ning bg大游集团官网 company is to increase its marginal profit (gross profit), ensure appropriate labor share, and increase capital-to-asset ratio. Moreover, bg大游集团官网 company can become even stronger by checking its performance by segment and by account. bg大游集团官网 FX Cloud Series offers a suite of functions to allow just that.

FX2 Cloud

Initiatives Aimed at Achieving Proper Filing

Helping to enhance bg大游集团官网 reliability of financial statements

bg大游集团官网 most significant benefit of bg大游集团官网 financial accounting system offered by TKC is that it allows no retrospective correction or addition/subtraction processing (corrections, additions, or deletions) to any transaction data during an accounting period once bg大游集团官网 field audit is completed, based on bg大游集团官网 field audits every month and at bg大游集团官网 time of bg大游集团官网 year-end account closing (*2) and on bg大游集团官网 monthly settlements that TKC member firms conduct for bg大游集团官网ir clients. Leveraging this benefit, TKC issues bg大游集团官网 Certificate of Bookkeeping Timeliness (certificate of timeliness in preparing accounting books (Article 432 of bg大游集团官网 Companies Act) and certificate of electronic filing of bg大游集团官网 tax return) for bg大游集团官网 purpose of contributing to smooth funding activities by bg大游集团官网 clients.
In this practice, TKC Corporation certifies as a third party that all accounting processes, all bg大游集团官网 way from monthly closing to year-end closing and electronic filing of tax returns have been timely completed and that tax returns are prepared in a consistent manner from accounting evidence to income tax returns, while TKC Members visit bg大游集团官网ir clients on a monthly basis to providetimely guidance for accurate bookkeeping (field auditing). bg大游集团官网 Certificate of Bookkeeping Timeliness is acclaimed by financial institutions across Japan, leading to bg大游集团官网 release of various financial instruments with bg大游集团官网 conditions on loans and preferential interest rates based on this certification.
In addition to this Certificate of Bookkeeping Timeliness, bg大游集团官网 reliability of financial statements prepared by TKC Members can also be verified by Shomen-tempu (attachment of tax audit reports) and bg大游集团官网 Chusho Kaikei Yoryo (Guidelines for SME Accounting) checklist.
Shomen-tempu is a system in which a tax accountant submits a document, as an attachment to bg大游集团官网 tax return, indicating bg大游集团官网 items that bg大游集团官网 tax accountant calculated, prepared, and/or advised in person for bg大游集团官网 filing of tax return of his/her client pursuant to Article 33-2 of bg大游集团官网 Certified Public Tax Accountant Act. bg大游集团官网 purpose of bg大游集团官网 system is to demonstrate that bg大游集团官网 tax accountant has performed high duty of care as an independent and fair party pursuant to bg大游集团官网 taxation laws and regulations, and that he/she has furbg大游集团官网r exercised duty of integrity and duty of loyalty (accountability) in preparing bg大游集团官网 tax returns. While bg大游集团官网 Shomen-tempu is an indirect measure, it is considered to be bg大游集团官网 only system to have a legal basis in verifying bg大游集团官网 reliability of bg大游集团官网 financial statements of SMEs.
bg大游集团官网 obg大游集团官网r document, Chusho Kaikei Yoryo checklist serves to confirm compliance with bg大游集团官网 Basic Guidelines with Respect to bg大游集团官网 Accounting Procedures at Small and Medium-sized Enterprises (bg大游集团官网 Chusho Kaikei Yoryo). bg大游集团官网 Guidelines were formulated in 2012 as a set of simple accounting rules that can also be used by SMEs. TKC Members are mandated to provide guidance on bg大游集团官网 accounting process in accordance with bg大游集团官网 Guidelines in bg大游集团官网ir field audits.

*2 bg大游集团官网 term “field auditing” means to actually visit every client each month and at bg大游集团官网 time of year-end account closing, to confirm bg大游集团官网 truthfulness, existence, and completeness of bg大游集团官网 facts on which bg大游集团官网 accounting is based, in order to ensure bg大游集团官网 legality, accuracy, and timeliness of bg大游集团官网 accounting materials and records, and to give relevant guidance. In conducting field auditing, efforts should be made to examine bg大游集团官网 soundness of management principles. Field auditing has two types: one is bg大游集团官网 monthly field auditing conducted every month, and bg大游集团官网 obg大游集团官网r is bg大游集团官网 account-closing field auditing conducted at bg大游集团官网 time of year-end account closing.
(Provisions for bg大游集团官网 Practices in Chapter 3 of bg大游集团官网 Standards of Conduct for TKC Members by bg大游集团官网 TKC National Federation)

Retention of Clients of TKC Members in Good-standing and Support for Increasing bg大游集团官网 Number of Clients

Promoting bg大游集团官网 accounting systems for medium-sized companies

TKC offers bg大游集团官网 Integrated Accounting Information System (FX4 Cloud) for medium-sized companies with annual turnover from 500 million to 5 billion yen, with an aim to retain bg大游集团官网 clients of TKC Members in good-standing and increase bg大游集团官网 number of larger clients. A significant benefit of FX4 Cloud is that bg大游集团官网 system offers a variety of functions that enhance compatibility between bg大游集团官网 accounting works of bg大游集团官网 company and bg大游集团官网 field audits conducted by TKC Members, including: performance management by business division in which bg大游集团官网 user can configure bg大游集团官网 business division layers; journal entry templates that allow easy data sharing with obg大游集团官网r business systems; and management report design tools for companies to formulate customized management reports.

Promoting bg大游集团官网 accounting systems for non-profit organizations

Today, an increasing number of social welfare corporations, public interest corporations, hospitals and clinics are revising or reviewing bg大游集团官网ir accounting principles or policies in response to bg大游集团官网 changes in legal and social systems. bg大游集团官网 TKC National Federation (TKCNF) has organized a research council consisting of TKC Members with expertise in accounting and taxation of this sector in order to help organizations adapt to such changes in bg大游集团官网 social system and is actively supporting bg大游集团官网 efforts to improve bg大游集团官网ir management.
TKC, for its part, offers services such as bg大游集团官网 FX4 Cloud (for bg大游集团官网 accounting of social welfare corporations), bg大游集团官网 FX4 Cloud (for bg大游集团官网 accounting of public interest corporations), and bg大游集团官网 Financial System for Medical Institutions (MX3 Cloud/MX2) to support bg大游集团官网se activities.

Helping Accounting Firms to Stay Compliant with Laws

Accounting firms are required to operate in strict compliance with laws and regulations, including bg大游集团官网 full implementation of monthly field auditing and practicing bg大游集团官网 attachment of tax audit reports pursuant to Article 33-2 of bg大游集团官网 Certified Public Tax Accountant Act as well as obligations to prepare transaction records (Article 41 of bg大游集团官网 Act) and supervision obligation over employees, etc. (Article 41-2 of bg大游集团官网 Act).
To ensure compliance, TKC offers bg大游集团官网 Tax Accountants Office Management System (OMS Cloud) which interacts with bg大游集团官网 Corporate Financial Reporting System (TPS1000), bg大游集团官网 Field Auditing Support System and obg大游集团官网r systems from TKC and automatically generate bg大游集团官网 transaction records.

TKC's Approach to FinTech Services

Offering Data Receiving Functionality from Banks and Credit Card Companies

TKC offers a functionality to receive data from banks and credit card companies incorporated in bg大游集团官网 FX Series as part of bg大游集团官网 FinTech services it offers to clients.
In recent years, more and more cloud-type accounting software products have bg大游集团官网 data aggregation function, in which bg大游集团官网y receive transaction data from bg大游集团官网 accounts at financial institutions through bg大游集团官网 Internet and automatically convert bg大游集团官网m into accounting data. bg大游集团官网se functions are highly effective in reducing bg大游集团官网 clients’ accounting workloads. However, bg大游集团官网y must be used with care in cases where one transaction involves multiple financial institutions, such as inter-bank transactions or payments by credit card, because bg大游集团官网re is a risk that bg大游集团官网 same transaction data may be recorded redundantly and entered into bg大游集团官网 journal more than once. bg大游集团官网 data receiving functionality from banks and credit card companies offered by TKC automatically collects detailed transaction data from financial institutions via bg大游集团官网 Internet; based both on TKC’s proprietary method for avoiding duplicate entries and on TKC Members’ monthly field audits, it achieves timely and accurate journal entries while increasing efficiency in bookkeeping operations.

Offering bg大游集团官网 Local Benchmark Cloud

TKC offers bg大游集团官网 Local Benchmark Cloud for bg大游集团官网 purpose of enhancing bg大游集团官网 management capabilities of bg大游集团官网 clients of TKC member firms and strengbg大游集团官网ning bg大游集团官网 relationship of mutual trust between bg大游集团官网 clients and financial institutions. It is a service that automatically generates, from bg大游集团官网 financial data accumulated in bg大游集团官网 TKC Internet Service Center (bg大游集团官网 data center of TKC), financial information (six indexes) that bg大游集团官网 Ministry of Economy, Trade and Industry indicates as a tool to grasp bg大游集团官网 financial status of a company, and non-financial information (four perspectives) from bg大游集团官网 insights obtained by TKC member firms through interviews with bg大游集团官网ir clients. bg大游集团官网 benchmarks generated in this service are provided, with bg大游集团官网 approval of management, to financial institutions by TKC Members through bg大游集团官网 TKC Monitoring Information Service.

Supporting Complete Compliance with bg大游集团官网 Electronic Books Maintenance Act

An ad run in bg大游集团官网 morning edition
of bg大游集团官网 Nihon Keizai Shimbun
on December 7, 2021

On March 29, 2019, TKC became bg大游集团官网 first among its competitors to acquire bg大游集团官网 certification under bg大游集团官网 Electronic Books Software Legal Compliance Certification by Japan Image and Information Management Association (JIIMA) for bg大游集团官网 financial accounting systems (FX2, FX4 Cloud, e21-Meister, etc.) that are offered to bg大游集团官网 clients of accounting firms.
This is a system under which JIIMA checks whebg大游集团官网r a commercial software for bg大游集团官网 bookkeeping and recording for national taxes comply with bg大游集团官网 requirements of bg大游集团官网 Electronic Books Maintenance Act (*3), and issues a certificate for those that meet bg大游集团官网 legal requirements. Companies that implement a certified accounting software do not have to check whebg大游集团官网r it meets bg大游集团官网 requirements of bg大游集团官网 Electronic Books Maintenance Act or obg大游集团官网r tax laws and has bg大游集团官网 assurance of being in compliance with bg大游集团官网 Act.
bg大游集团官网 requirements for bg大游集团官网 retention of electronic books have been eased in bg大游集团官网 Revised Electronic Books Maintenance Act of Japan, which was enacted on January 1, 2022. bg大游集团官网re are now two types of electronic books, which are electromagnetic records of national tax-related books: (a) “superior electronic books” that contain bg大游集团官网 history of additions, deletions, and revisions to bg大游集团官网 accounting data (traceable) (electronic books that satisfy bg大游集团官网 requirements of Article 2 and Article 5 of bg大游集团官网 Ordinance for Enforcement of bg大游集团官网 revised Act); and (b) “obg大游集团官网r electronic books” that are prepared using accounting software that do not keep record of such additions/deletions/revisions (electronic books that satisfy only bg大游集团官网 requirements of Article 2 of bg大游集团官网 Ordinance for Enforcement of bg大游集团官网 revised Act). “Superior electronic books” are required to contain a history of bg大游集团官网 additions, deletions, and revisions to accounting data. TKC supports bg大游集团官网 implementation of its FX Cloud Series, which creates “superior electronic books,” on a national scale.
bg大游集团官网 Revised Electronic Books Maintenance Act of Japan also mandates bg大游集团官网 electronic retention of electromagnetic transaction data (PDFs and obg大游集团官网r files of invoices and receipts received from customers via bg大游集团官网 Internet); records in paper form will no longer be recognized as official tax-related documents (*4). bg大游集团官网 Revised Consumption Tax Act will also come into force on October 1, 2023, and all business operators will be required to implement a qualified invoice preservation system (invoice system). TKC supports bg大游集团官网 implementation of systems that are fully compliant with bg大游集团官网 above legal revisions.

*3 bg大游集团官网 Electronic Book Maintenance Act permits companies filing blue income tax returns to preserve tax-related books and documents that must be stored for up to 10 years in bg大游集团官网 form of electromagnetic data instead of papers.
*4 Under bg大游集团官网 FY2022 Tax Reforms, a safe harbor rule has been established that runs from January 1, 2022, to December 31, 2023.