JAPAN BANK ACCOUNT MANAGEMENT AND PAYMENTS SERVICE

Our Japan Bank Account Management and Payments team manages Japan bank accounts on behalf of foreign clients and makes payments on their behalf.

Two important issues need to be considered when choosing a banking and payments solution for the Japan entity:

1. Internal Control

Internal control is a major issue for the Japan subsidiaries of foreign companies.

There are four significant issues in the internal control environment that are unique to the Japan subsidiaries of foreign companies.

• Lack of External Audit Oversight
  Even where the foreign parent is a major corporation subject to audit, the Japan operation is often small and not considered significant from an audit viewpoint. As a result, limited audit procedures (if any) are undertaken. This increases the likelihood that significant error or fraud will not be quickly detected.
• Poor or Non-existent Segregation of Duties
  Typically, the Japanese subsidiaries of foreign companies are relatively small and focused on sales or customer support. As a result, appropriate segregation of duties in matters such as payments and bank account management can be difficult to implement.
• The Hanko / Seal System
  While bank accounts in most countries are operated based on signatures, in Japan accounts are operated by way of special seals (usually referred to as hanko).
  
  This article provides some additional information regarding Japanese Hanko: The Use of Corporate Seals in Japan.
• Language Issues
  Most source documents related to the Japan operation will be written in Japanese. This makes verification by the foreign head office difficult.

Our Japan Bank Account Management and Payments Service helps foreign management deal with internal control challenges and helps assure that the Japan operation is running smoothly and free of financial irregularity.

2. Cost

The Japan entity will typically consist of a few employees who will be focused on customer related tasks. This makes it difficult to justify the cost of an inhouse, bilingual financial support for the Japan operation.

Our Japan Bank Account Management and Payments Service provides a cost-effective solution.

KEY FEATURES OF OUR JAPAN BANK ACCOUNT MANAGEMENT AND PAYMENTS SERVICE

Key aspects of our Japan Bank Account Management and Payments Service include the following:

1. Initial Consultation

Our initial consultations focused on understanding the client’s requirements in terms of payments and bank accounts.

We then clarify the unique aspects of payments and bank account management in Japan. Some of these features include:

• Use of bank seal / hanko rather than signatures to operate bank accounts.
• Checks are rarely used in Japan. All payments are made by way of electronic transfer or over the counter at a local bank branch.

2. Initial Set-Up

The next stage involves setting up the key elements of the Japan entity’s banking / payments system.

This will include:

• Ordering bank seals / hanko.
• Opening bank accounts.
• Registration for online banking.
• Registration for automatic payment of certain expenditures.

3. Monthly Service

On a monthly basis, key aspects of our Japan Bank Account Management and Payments Service include:

• Payment of third party vendor invoices.
• Payroll payments to employee bank accounts in Japan.
• Employee expense reimbursements.
• Payment of corporate taxes (both provisional and final).
• Preparation of funding requests to cover upcoming expenditures.
• Interfacing with the local bank in Japan as required.