Financial Mastery: 12 Essential Accounting Tips for Singapore SMEs

5 min read|Last Updated: June 27, 2024|

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Efficient organization of documents, including invoices, purchase orders, receipts, and payment vouchers, represents only a fraction of the responsibilities within accounting. Managing a business’s finances is a substantial undertaking for any business owner, irrespective of the entity’s size. Numerous factors must be taken into account, such as selecting appropriate accounting software, establishing procedures, creating forms, and generating reports.

What are Some Accounting Tips I Should Know?

Here are 12 important accounting tips that will help you be on your toes for your business’s finance:

1. Choose an Accounting Structure

The initial step entails selecting an accounting structure. The fundamental disparity lies in the timing of recognizing revenue and expenses.

Cash-based Accounting

Cash-based accounting records revenue and expenses solely upon the completion of transactions (i.e., when cash is received or disbursed). This method is commonly adopted by small businesses and proprietorships due to its simplicity, focusing solely on tracking cash paid and received. Consequently, fewer resources are allocated to staffing requirements.

Accrual-based Accounting

Conversely, accrual-based accounting records revenue and expenses at the moment a transaction occurs, regardless of when cash is received or disbursed. Typically favored by larger companies, the accrual method enables businesses to even out earnings and provides a more accurate picture of a company’s health.

2. Maintain financial records in an efficient manner

Business owners ought to meticulously track all expenses, profits, earnings, losses, and other transactions and documents pertinent to their operations. This practice not only facilitates the expedited generation of financial reports but also streamlines the preparation for audits and the periodic revision of regularly updated data, thus saving valuable time in the future.

Wan Yi

3. Investing in a quality accounting software

Working with an accountant or an accounting service provider will require you to acquire various basic accounting software that are easy to use and affordable.

These software will hence assist you in tracking and organising certain financial tasks within the business.

Some of the tasks an accounting software can provide for you include:

  • Keeping tax forms
  • Expenses
  • Losses
  • Creating forms to use for recording of transactions

4. Minimising paper usage

Corporate Social Responsibilities encourages the minimal usage of papers in business to ‘Go Green’. Not only will this reflect a positive image on your company, you are also able to reduce clutter to improve record keeping practice, minimising confusion.

By reusing used papers to print important information and reviewing processes with high paper volume will help complete the process more efficiently in a timely manner!

5. Using a time clock system

Collaborating with a group of individuals simplifies and enhances time management, enabling individuals to be more vigilant about deadlines and submissions, thereby boosting overall company efficiency. Additionally, maintaining accurate records of employees’ overtime can result in significant savings of both money and time in the future.

6. Seeking advice from experienced business advisor

Running a business involves regularly reviewing multiple aspects. For instance, maintaining effective financial operations is paramount for achieving and sustaining success. Engaging with other business owners or industry peers also provides valuable feedback and advice for enhancing business operations.

7. Keep accounting methods and forms up to date

In order to ensure procedures and operations to continue meeting the company’s standard, this is an extremely important step. This is independent to how your business operates, and you may need to make several changes or updates to how the cash flows are managed, accessed, and distributed.

8. Forecast for Major Investments

By maintaining diligent financial records and forecasting future expenditures and income, your company can strategically allocate additional funds for significant investments. Such funding can be sourced through credit or reserves accumulated from profitable quarters. Establishing a favorable credit history can also potentially reduce future borrowing costs in the case of credit-based funding.

9. Have a Separate Business and Personal Accounts

Upon initiating a business, obtaining a business account should be a primary step. A business account provides a clear demarcation between business and personal transactions, facilitating easy tracking of business cash flows. This demarcation not only simplifies tax-related documentation but also helps in avoiding personal legal liability for business debts.

10. Be Familiar with the Law

While business owners may be adept at building a business, they may not be aware of the nitty gritty details that comes with it. Take for example accounting and bookkeeping. There are laws which you may not be aware of, such as that your company must maintain records of business transactions for at least 5 years!

11. Optimise AP Terms and Invoicing

In the business world, cash is king. In order to hold onto your cash for longer, utilise favourable credit terms from suppliers and pay bills early for vendors that offer discounts for doing so. On the other end, encourage your customers to pay on time as well, by similarly offering incentives for doing so and running background checks on potential customers.

12. Build good relations with your accountant

By working closely with your business’s accountant, you are able to stay on top of all financial issues as they arise. You will also be able to stay current with technology, financial processes and other important details relate to business finances.

Accounting Services in Singapore

In Singapore, numerous accounting service providers, such as Paul Hype Page & Co., offer a range of accounting services to businesses. Commonly sought-after services include cash flow and working analysis, account consolidations, management reports and accounts, as well as financial planning and budgeting assistance.

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Come to our office or get in touch virtually for a consultation on outsourcing your accounting and payroll with us today.

FAQs

Why are professional accounting services important for small businesses in Singapore?2024-03-18T11:48:59+08:00

Professional accounting services ensure accurate financial records, compliance with tax laws, informed decision-making, and access to specialized expertise, all while saving time and resources.

What are the benefits of outsourcing accounting services for small businesses in Singapore?2024-03-18T11:48:28+08:00

Outsourcing accounting services saves time and resources, ensures accuracy and compliance, provides access to specialized expertise, and aids in better financial management and decision-making.

How can professional accounting services help with tax compliance for small businesses in Singapore?2024-03-18T11:47:52+08:00

Professional accounting services ensure compliance with tax filing deadlines, identify eligible tax deductions and credits, and prevent errors or discrepancies that may result in penalties.

Do small businesses in Singapore need professional accounting services even with a small budget?2024-03-18T11:47:25+08:00

Yes, professional accounting services are crucial for small businesses in Singapore, offering cost-effective solutions through tax planning and identifying areas for cost reduction.

What types of services do professional accounting firms offer for small businesses in Singapore?2024-03-18T11:45:35+08:00

Professional accounting firms offer financial statement preparation, tax planning, cash flow management, budgeting, financial analysis, bookkeeping, and additional services tailored to the needs and budget of small businesses.

Can professional accounting services help small businesses in Singapore during audits?2024-03-18T11:44:55+08:00

Yes, professional accounting services assist small businesses during audits by organizing financial records, providing necessary documentation, and addressing potential issues to mitigate penalties or fines.

Why is corporate accounting necessary?2021-09-20T12:19:53+08:00

It is very important for corporations to know about their financial and operational health. Investors are more interested in knowing financial health and the management in operational efficiency of the company.

Management account reports gives information on operational efficiency of the company.

Financial accounting report conveys financial health of the company to the investors, creditors, and government regulators.

Under the corporate accounting, statements about company’s final accounts and cash flow are considered. The reports present analysis and interpretation of financial results. Such reports are taken as stepping-stones for company’s plans.

How much time is required to incorporate a business in Singapore?2024-03-18T11:50:08+08:00

Incorporation experts can register a Singapore company in a day. However, you must supply all the necessary documents to the relevant authorities.

How to claim for tax exemption?2021-09-20T12:18:54+08:00

You are required to make a declaration in your income tax returns by giving the nature and amount of the foreign-sourced income that was remitted to Singapore. You are also required to complete the Declaration Form for Foreign-Sourced Income Received in Singapore from 22 Jan 2009 to 21 Jan 2010 (60KB) for submission to IRAS. Although you have to state the use of the foreign income in the declaration form, the usage of such foreign income will not affect the claim for tax exemption.

How is income assessed?2021-09-20T12:18:28+08:00

Income is assessed on a preceding year basis. This means that the basis period for any Year of Assessment (YA) generally refers to the financial year ending in the year preceding the YA.

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