As you establish your business, you need to consider a lot of aspects – from doing extensive research on your target market, creating a positive work environment, managing your staff in keeping financial records. All these factors are essential in having a successful business venture.
More importantly, you must understand that sound financial management is the key to sustaining any business. For it to be financially sound, you should implement a proper bookkeeping process. But how? Well, most organisations struggle to keep their own financial records. And when negligent financial reporting happens, they suffer.
The absence of an excellent financial bookkeeping process may lead to low cash flow margins, significant financial problems, audit risks, and missed growth opportunities. As a business owner, what should you do if you are faced with these situations? Start by getting to the root of the problem. If you’re not number savvy, it’s best to avail of bookkeeping services in Singapore rather than running the risk of non-compliance.
However, if you want to do your own book, consider these tips for efficient bookkeeping for SMEs. We’ve made a list to help you out!
1. Know compliance guidelines and statutory laws.
As a business owner, you need to know the ins-and-outs of your business. You need to understand the compliance regulations set by Singapore Financial Reporting Standards (SFRS.)
It’s also good to have extensive knowledge of the Inland Revenue Authority of Singapore (IRAS) regulations. It can significantly help businesses in claiming tax credits. For example, both local and foreign companies can be eligible for tax incentives.
2. Develop a detailed and streamlined bookkeeping system.
Other than understanding the principles behind bookkeeping for small businesses, the company should streamline its processes. You can even purchase accounting software for convenience and seamless bookkeeping.
Every software program has its own unique features. But more than anything, it can help you achieve your goals and comply with your bookkeeping requirements. So, whether you want to invest in a sophisticated accounting software program or manually manage your books, you must develop a detailed system that addresses your needs.
3. Be consistent in doing your books.
Are you tired of working on piles of source documents? The best thing to do to avoid this situation from happening is by consistently updating your books. Record your business’ daily transactions. When you do it on a monthly basis, it will become a more tedious task than you thought.
Imagine bookkeeping a year’s worth of financial records. Doing this task will take your time and other valuable resources. So, practice dedicating at least ten minutes of your time for bookkeeping.
4. Record ALL your transactions.
One of the most common problems finance managers experience is that businesses don’t have all the necessary records to address financial discrepancies. And when this happens, they are faced with compliance violations and penalties.
Be sure to keep the records properly to avoid any financial complications. You can create your own system for the receipts, invoices, purchase, and business expense records, income records, statements, and accounting records to identify each from the other.
In some instances, it may seem impossible for a bookkeeper to record every single transaction. However, it’s the bookkeeper’s responsibility to comply with the SFRS.
5. Go cashless.
Going cashless is one of the most efficient ways to keep track of your transactions. If you are wondering why, well, most cash payments give you receipts. And it can be overwhelming to keep track of all them.
For you to avoid losing a copy of your financial transactions, you can either pay via credit or debit card. This method ensures that you have created records of your purchases because they will be reflected in your bank statements.
These alternative forms of payment will significantly help you to check and trace your business’ expenses.
6. Separate personal and business finances.
Having trouble with your books? It’s likely that you didn’t keep personal finances separate to your business. To avoid recording private expenses in your books, you can do the following:
- Pay yourself a salary.
- Start a bank account solely dedicated to your business.
- List all the things you’ve paid for your business and transfer the money to your personal account.
By doing these things, you can accurately track your finances, both for your personal and business account.
7. Hire professional bookkeeping services in Singapore.
Starting a business can be an overwhelming and tedious journey. While you’re at it, you need to focus on what really matters for your business. That’s why it is best to outsource your bookkeeping needs.
If you don’t have the time and skills to manage your business’ books, you can consider outsourced bookkeeping services in Singapore. Most service providers consist of a team of experts that can take the load off your hands. Whenever you have no idea where to start, seek the help of professionals like Mighty Glory Corporate Solutions.
Mighty Glory Corporate Solutions is a virtual accounting practise that offers bookkeeping and accounting services for small businesses in Singapore.
Our team is proficient in different accounting software and platforms to help you with your requirements. Want to know more about our services? Let’s arrange a meeting to discuss more. Call us at (+65) 6677 4258 today!