Setting up a business is easy but maintaining it and bringing it among the top businesses in the industry is one hell of a task. Business is not just selling your products but you have to take care of a lot of different things without which your business will not thrive.
One of those things is bookkeeping. Bookkeeping is the process of maintaining data of all the transactions that the business has made. It can be a transaction to buy stationery items for the office or a transaction that cleared your account with the customer.
The importance of efficient bookkeeping can be understood by the fact that it plays a vital role in generating accurate financial reports. That will help make important business and financial decisions for the well-being of a business.
You must be wondering what you should do for efficient bookkeeping. Don’t worry!! Here are a few tips that will help you. So, read on and act accordingly…
1. Develop An Effective Bookkeeping System
Gone are the days when bookkeeping was done in journals. Now there are many effective and up-to-date bookkeeping software that makes the job very easy for you. The transactions are stored in the correct manner, tax calculations become easy, and you can have financial reports ready with a few clicks.
Manual bookkeeping is time-consuming and human error is unavoidable. Moreover, report-making will also take a lot of time. So, it is better to contact accounting software providers. They will develop software that is according to your business needs.
2. Make Sure To Record Everything
Bookkeeping is all about maintaining a record of all the transactions. Whether it’s a small transaction like buying a pen or something big paying your debt, everything that goes in and out of your account must be recorded.
The accuracy of the bookkeeping helps the managers to track records of the finances and make financial decisions based on that. Moreover, the more accurate the records the easier it is to file tax returns and other financial obligations.
3. Be Consistent
Bookkeeping is an essential and tedious task to do. Every day you make numerous transactions to keep your business up and running. Usually, you save the receipts and put the bookkeeping to be done later on. This later comes several days after which makes the job a lot confusing and difficult as you lose track of your transactions and have to invest your time and energy to keep it up to date.
So, we would suggest, allocating a few minutes of your day for the bookkeeping task and keeping track of all your transactions on a daily basis. You can also hire a bookkeeper to share your burden and keep track of all the transactions.
4. Understand Compliance Laws And Obligations
Understanding the rules and regulations of Singapore Financial Reporting Standards (SFRS) and Inland Revenue Authority and Singapore (IRAS) is a must. It will help the bookkeeper to meet financial reporting standards and will also help in claiming tax credits. According to IRAS, businesses are eligible for Productivity and Innovation Credit (PIC) if they invest in research and development, innovation, automation, and training.
A bookkeeper that understands these rules and regulations will keep track of such investments and use them at the end of the financial for financial gains.
5. Separate Personal And Official Expenses
You instantly get tempted to invest your personal savings in your business or your business for your personal needs, whenever the need arises. However, it is not at all a good practice.
By mixing your personal and official finances, you are making it a lot difficult to keep track of your finances and manage the profit and loss of your business. Moreover, such a mixed-up and confusing financial setup will be a nightmare to file tax returns.
So, strictly keep your personal and official expenses separate. Some tips to keep them separate are:
- Assign yourself a fixed salary so that you don’t take money from the business for your expenses.
- Start a business bank account and use it for all your business transactions. Keep your personal bank account and transactions separate.
- Whenever possible, take back whatever you have invested in the business. This will clear your personal and business financial situation.
6. Go Digital
Digital payment methods are a lifesaver if you find it difficult to keep track of your payments. Digital payments are instantly recorded and reflected in your bank statement at the end of the month. By this, it will be easier for a bookkeeper to keep track of your transactions and match your bank statement with his accounting books.
So, try to incorporate the digital method of transactions as much as possible in your daily transactions.
7. Hire Professional Beekeeping Services Singapore
Lastly, we would suggest you hire bookkeeping services from a reputed SME accounting service Provider Company in Singapore. Bookkeeping is a complicated and tedious task and doing it accurately takes a lot of understanding and training which only a professional bookkeeper has.
Hiring an accountancy firm for bookkeeping will ensure that your transactions are recorded efficiently and timely. Accounting firms have a team of expert bookkeepers who will take away the burden from your shoulders.
We hope our guide will help you understand the importance of bookkeeping and how you can deploy an efficient bookkeeping system. If you are looking to outsource bookkeeping for your business, feel free to contact us.
WZ WU & Partners is a reputed SME accounting firm in Singapore. We provide corporate accounting and bookkeeping services in Singapore to small enterprises.
