Bookkeeping is a tedious task.
It’s a monotonous responsibility, and as a fellow business owner, I’m sure you agree with me.
Bookkeeping is more than keeping records and receipts organised; it also involves managing and reconciling these records the accurately.
Even though bookkeeping is rarely anyone’s favourite task, you should never neglect the importance of record keeping. Implementing a proper bookkeeping process is an essential building block to keep a business financially healthy. The absence of a well-founded recordkeeping process may lead to:
- Audit risks;
- Low cash flow margins,
- Missed growth opportunities;
- Financial problems; and
- Noncompliance to statutory regulations.
Is it worth having all these risks while running your business?
If you think otherwise, then these 5 simple tips for efficient bookkeeping in Singapore are for you.
Know about SFRS and IRAS Accounting Standards
Generally, generating accurate financial statements requires you to familiarise yourself with accounting standards because they are developed in the public interest to support corporate governance and financial reporting framework. The Singapore Financial Reporting Standards (SFRS) are based on the International Financial Reporting standards (IFRS). Knowledge of SFRS would empower a bookkeeper to treat items, such as assets, liabilities, taxation, valuation as per the specific principles and procedures that guide financial reporting.
Similarly, knowledge of Inland Revenue Authority of Singapore (IRAS) regulations is crucial to claim tax credit, where applicable. For example, your business may be eligible for the Productivity and Innovation Credit (PIC), and knowledge of IRAS standardized procedures would help a good bookkeeper to claim PIC promptly.
Create a Comprehensive Agreement in Advance
In order to avoid unwanted conflicts as well as financial disputes, it is important to come up with an all-encompassing agreement that oversees bookkeeping expectations and requirements for your business early enough. This should include:
- Scope of duties;
- Roles and responsibilities;
- Payment terms;
- Access to documents and related information, etc.
After reviewing the above requirements and expectations, you have to go over them with your accounting and bookkeeping professionals so that they have everything at their fingertips with reference to your:
- Business plan;
- Cash flow;
- Company branding;
- Office routines;
- Organizational structure;
- Products and services, etc.
If you choose to outsource your bookkeeping services to an accounting firm, make sure you take the time to get to know their bookkeeping expectations and requirements. Not only does this help to create a level playing field, but also a harmonious professional relationship. Furthermore, you might end up discovering some best practices that are applicable in running your business efficiently.
Carry Out Bookkeeping Tasks Consistently
Have you ever heard of the phrase: a stitch in time saves nine?
Consistency stands out as one of the most important bookkeeping principles. Strive to record your transactions every day. No exceptions. If you push such tasks to the end of the year, you will find them more tedious than you ever thought. Make it a habit to dedicate 10-20 minutes of bookkeeping work every day to track your expenses regularly. Devote a certain time of the day or week exclusive focussed on bookkeeping and stick to it.
If you own an e-commerce business, we advise that you integrate your system with an effective accounting software to simplify your work. Having electronic records also lowers bookkeeping costs for your business. Furthermore, if you decide to outsource your accounting tasks to a professional firm, electronic records of your business transactions will come in handy to keep you on top of things.
Separate Your Personal and Business Finances
As a business owner, it’s not optional to keep your personal and business finances separate. A number of small business owners have a tendency to combine their business and personal finances, which leads to complications when tracking and processing business expenses. To avoid recording private expenses in the financial books of your business, start by paying yourself a salary. This helps you to effectively manage your personal expenses, such as holidays or meals rather than claiming them as business expenses.
Another effective way is to open a corporate bank account exclusively for business purposes as soon as you incorporate your company. This will go a long way in separating various financial transactions, which further facilitates the evaluation of your business’s financial position as desired. In addition, it helps you crosscheck your bank statements more professionally in both short-term and long-term basis.
Hire Professional Accounting Services
If managing your bookkeeping needs has started to get on your nerves, outsourcing to a professional accounting firm is the right thing to do. Nowadays, many businesses in Singapore choose third-party accounting services rather than investing in full-time in-house accountants and costly accounting software. Always choose a good accounting firm in Singapore that reflects proficient delivery of high-end services that comply with statutory regulations. Eventually, you will be free to focus on the core areas of your business.
At Tianlong Services, we provide efficient end-to-end accounting services that help you build your dream company. Our professionals are committed to addressing all financial aspects of your business promptly and effectively by providing organised and well-maintained accounting books. Whether you are looking for assistance on accounting, bookkeeping or taxation, give us a call or email us to learn more and get started today.