After incorporating your company in Singapore, you are encouraged to hold your key documents such as financial statements to file your tax accurately and avoid penalties. Bookkeeping can help your business maintain consistent and clean records, which helps businesses manage daily transactions with ease. Thus, maintaining clear records will make your audit process significantly smoother.
What is Bookkeeping?
The administrative task of bookkeeping refers to the process of recognising, measuring, and recording financial transactions on a daily and consistent basis to keep the business/company records of all financial transactions in order and accurate.
Bookkeeping is the initial phase in accounting and entails tasks which include, among others:
The bookkeeper is in charge of maintaining inventories, processing petty cash, paying suppliers, and filing cash receipts from consumers.
While management cannot make crucial business decisions solely on bookkeeping data, bookkeepers must be accurate in their job and have a thorough understanding of financial matters and their roles and responsibilities.
Bookkeeping Authorities in Singapore
Now the question many will ask is, who regulates and oversees bookkeeping in Singapore? The answer to this question is Accounting and Corporate Regulatory Authority (ACRA). This Singapore authority regulates and oversees bookkeeping and financial reporting within the nation. Furthermore, all of the accounting standards set by this authority are to adhere to and enforce compliance with the Singapore Companies Act and other relevant legislation.
Advantages of Bookkeeping in Singapore
Here are some of the advantages that bookkeeping will bring about to your company.
Maintaining your Budget
Bookkeeping allows your business to keep track of your spending in order to maximise your profits. Hence, it allows the company to manage their expenses and income and to determine which expenses are over-budget.
Efficient Business Analysis
After the process of bookkeeping, a financial statement will be generated, and it allows stakeholders such as investors to have a clear view of how the company is doing in terms of profitability and liquidity. Through that, you are also able to identify your company’s strengths and weaknesses.
Proper Business Structure
You should be able to easily assess your financial information at any time with organised bookkeeping. Moreover, this will help when it comes to applying for grants, loans, or even attracting investors.
Tax Preparation
Bookkeeping makes filing your annual tax return easier for your business. With a proper structuring of records on your profits and losses, you won’t have to worry about finding frantically for receipts and invoices because all your records are properly recorded and kept.
Portrays a Good Image for your Company’s Stakeholders
Before investing, investors will have to understand and properly analyse the financial performance of your business in terms of profitability and liquidity before deciding on whether they want to pump in money into your business. With a proper bookkeeping structure and well-done financial statements, investors are more confident in investing in your company.
Tracking Where Your Cash Flows
Bookkeeping helps to improve your cash flow, making it just as crucial as the business itself. It contains all invoice information, including the name of the client or vendor, the amount, the date issued, and the due date. You can keep track of when your customers and vendors pay their invoices by collecting revenues on a regular basis.
Provides a Clear View of Where Your Company Stands in the Market
Financial documents such as a balance sheet, income statement, and bank statement are used in bookkeeping to provide an overview of your organisation. These statements contain all of the necessary information for you to assess your company’s performance.
Outsourcing Bookkeeping in Singapore: Is it the Right Choice?
Short answer, yes. There are some of the benefits engaging a firm for bookkeeping services in Singapore has as compared to hiring many accountants.
Maintain a High Level of Accuracy and Efficiency Regularly
When you hire a good accounting and bookkeeping firm, you frequently benefit from the experience and expertise of a team of accountants who specialise in specific roles or responsibilities. When it comes to crunching your business’s finances, this usually results in higher accuracy – as high as 99.95% in some cases.
Take Advantage of Outsourcing’s Cost-Effectiveness
Accounting and bookkeeping services in Singapore are unlikely to be required by your company on a full-time basis. You can outsource your accounting function for a fraction of the price. This large amount saved on operational expenditures can even be used to expand the company!
Avoid being a victim of Financial Misbehaviour or Fraud
Expert accounting and bookkeeping service providers can often identify and prevent frauds or unlawful financial objectives that may not be obvious to many organizations. Moreover, professional accountants receive extensive training in ethics and governance because they are responsible for every transaction, ensuring quality and accuracy control.
Make your Company Impenetrable to Fines
Inaccuracies can result in penalties from Singapore’s Accounting and Corporate Regulatory Authority (ACRA) and Inland Revenue Authority of Singapore, whether intentional or not (IRAS). While hiring good accountants can help avert this problem, it is significantly more effective to choose professional service providers who have a proven track record of handling tax filing for their clients.
FAQs
The most important aspect of bookkeeping is to keep an accurate account of all records and keep them up to date. Accuracy is the most vital part of the bookkeeping process.
Proper bookkeeping gives companies a reliable measure of their performance. It also provides information to make general strategic decisions and a benchmark for its revenue and income goals. In short, once a business is up and running, spending extra time and money on maintaining proper records is critical.
By definition, bookkeeping is the organization of financial information. Keeping your financial records organized makes it easier to locate and provide to appropriate parties. Bookkeeping is important because it helps with business analysis. It is a tool used by management to analyze business performance
Bookkeepers record income and outflow of money, property and other financial assets. The most important bookkeeper duty is to accurately record and review all financial data. … Most bookkeepers now manage financial information electronically, such as employee payroll.
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