Setting up a business in Singapore might not be a complicated affair. However, maintaining it and ensuring that it does well among the competition in the industry can be tough if not managed well. The thriving of your business is not just about selling your products well, but it also includes taking care of various key aspects.
One of which is bookkeeping, which is the maintenance process where all transactional data of the business has been done. The transaction can be clearing off an account with a client or purchasing new stationeries for the office.
Efficient bookkeeping is essential as it helps in generating reliable financial reports that help in the decision-making of business and financial processes. Here are a couple of tips that will help you improve the efficiency of your company’s bookkeeping.
1. Create a reliable bookkeeping system
Long gone are the days when bookkeeping journals are kept. Nowadays, there are many efficient and effective bookkeeping software that simplifies this process. The tax calculations are simplified, transactions are stored in the right manner, and you can access your financial reports all within a couple of clicks.
With such AI software, it eliminates manual processing, which takes up a lot of time and increases the chances of human error.
2. Record every single transaction
Proper bookkeeping is all about recording every transaction that goes in and out of your business account, whether big or small. The accuracy of proper bookkeeping ensures that financial records can easily be tracked, which helps when you need to make certain business decisions. In addition, accurate bookkeeping records make it easier to fulfil financial obligations, such as filing tax returns.
3. Maintain consistency
Bookkeeping can be tedious at times, but it is a crucial element of running a business. Your business makes many transactions every day. Typically, you might keep the receipts to do bookkeeping later on. This later on might happen a couple of days later which often results in much confusion and difficulty as you try to remember certain transaction details.
Hence, allocating a couple of minutes at the end of your work day for bookkeeping will help you keep proper track of your transactions.
4. Recognise obligations and compliance laws
You should be aware of various IRAS- and SFRS-related rules and regulations when conducting bookkeeping. This will help your business meet the required financial reporting standards and claim essential tax credits. According to IRAS, if your business invests in innovation, training, research and development, and automation, you are eligible to receive Productivity and Innovation Credit. Efficient bookkeeping ensures that such benefits are optimised for financial gains.
5. Keep your business and personal expenses separate
One might be tempted to invest your personal savings into your business or vice versa. It is highly not recommended to do so. By mixing your business and personal finances, you make it even harder to keep track and manage your business finances. In addition, such confusion makes it a nightmare to file tax returns.
Hence, it is best you keep your business and personal expenses separate by:
- Assigning yourself a fixed salary so that you do not have to deduct money from your business
- Ensuring that you have both a business and personal bank account for its intended purpose
- Taking back whatever you have invested before into your business, thus clearing any financial situation
6. Digitalise your business
If you find that keeping track of transactions is difficult, then digitalising your payment methods is the way to go. All transactions are immediately recorded and reflected in your business account, making it easier for you to keep track of your ongoing and past transactions at the end of the month.
7. Engage a professional bookkeeping service in Singapore
At the end of the day, it can be hard to manage both your business and its finances at the same time, especially when you do not have any prior knowledge about maintaining business accounts. Hence, we would recommend you engage bookkeeping services from a reliable accounting firm that also provides auditing services in Singapore. A professional bookkeeper from such organisations has the necessary experience and fundamentals to help you, allowing you to focus on growing your business.
Consistency is key to efficient bookkeeping in your business. Rather than leaving it at the end of the month, it is better to conduct it daily. And if that takes up too much of your time, hiring a bookkeeper for your business or engaging an accounting firm such as Ackenting Group helps too!
We provide an all-in-one corporate solution, which means that our range of corporate services includes not only accounting and auditing but also other business aspects, such as incorporation, secretarial, digital marketing, and branding, among others. Contact us to get started on proper bookkeeping today!