5 Useful Accounting Tips for Small Businesses in Singapore

Many businessmen do not have knowledge in finance and accounting, this leads them to be fearful of managing this important business function. In addition, Singapore government requires all private companies to hold annual general meetings and submit annual financial statements.

Accounting often gives the businessmen transparent picture of their business’s performance and success. Unfortunately, many Singapore companies fail to comply with the accounting standards imposed by the Companies Act, GAAP and ACRA. To help small businesses manage their companies’ account effectively, here are five useful accounting tips to learn.

Keep Track of the Finances and Expenses of the Company

Most of the time, businesses have to experience ups and downs; one time, they would gain high earnings while other times, they need to spend more. Hence, starting a business significantly depends on how prepared a company is when facing the best and worst-case scenarios. This part is where financial tracking and management come in.

Startups that monitor their finances and expenses efficiently would be able to devise and execute an effective financial strategy. Having sufficient knowledge of when and how much to spend on a significant investment for golden business opportunities is a good sign that shows the company is managing its accounts function competently.

To successfully manage the finances and expenses of the company, business owners must keep track of and record even the smallest financial transactions incurred for businesses need. These low expenses, while seems negligible, may pile up one day and leads to a significant accounting error.

Allocate Specific Funds for Taxes and other Financial Obligations

Non-compliance with Singapore’s tax regulations is a punishable offense. Missing deadlines for tax filing, for instance, would result in fines and penalties by Singapore governing authorities, IRAS. One effective way to handle non-compliance issues is by keeping aside specific funds for taxes and other statutory financial needs. Setting aside the necessary funds can help the company to pay taxes on time.

Do Not Allow Clients to Get Away without Paying Balances

The receivables department plays a vital role in keeping the business afloat. Although having a massive amount in the receivables column is good, however, the money does not count until it is inside the company’s bank account. To manage the company’s accounting accurately, businesses need to ensure their clients do not make irregular payments. They need to stand firm and insist on receiving the payment for previous orders before allowing their clients to receive more of the company’s products or services.

Work Out the Minimum Monthly Profits

Deciding how much money to spend to keep the business running can get complicated without having a good system. Businesses should create a good system of expenses and other related obligations to know how much minimum income the company has each month. Without this information, business owners will not have to be able to know if the company is making money or losses.

Outsource Accounting Operations

Aside from having to spend huge capitals on employing in-house accountants to manage the company’s daily account activities, businesses also have the option to outsource their accounting function to reputable accounting services in Singapore. In addition to gaining access to skilled accountants, an outsourcing accounting operation helps the company cut down on overall expenses of up to 79%, save time and minimize fraud. This provides a scalable option for the business to either scale down or expands as needed quickly.

Conclusion

Accounting is one of the critical business functions of a company. But for many businesses, accounting and bookkeeping can be tedious task. To better manage their accounting, startups should monitor their finances and expenses. They must keep aside some funds for taxes and other financial obligations, ensure the clients pay balances, calculate the company’s minimum monthly earnings and outsource accounting operations to reputable accounting services provider in Singapore.