Basic Elements of Bookkeeping & Why You Should Hire Accounting Services
Many aspiring business owners dream of the day they open their doors and start selling their product or services to their first customers. However, the harsh reality is that it takes a painstaking amount of preparation behind the scenes before the first sale even comes through!
Of course, we’re talking about the art of bookkeeping and accounting. While it isn’t exactly something to be excited or passionate about, a basic understanding of bookkeeping and accounting can help your business hit the ground running in the best condition.
What is bookkeeping and accounting?
At its most basic form, bookkeeping is the core process of accurately recording and meticulously organising every financial transaction that a business makes. A bookkeeper is the person responsible for executing all necessary steps in terms of paperwork. It is one of the primary ways a business owner can accurately predict if their business is profitable or if there is a need to change pricing or cost. That way, businesses can predict challenges in finances even at the early stage and make necessary adjustments to address them.
After a bookkeeper records a financial year’s business transactions, it is now up to the accounting side to review and interpret the massive amount of records to prepare a report of key financial information for the business. This can also come in the form of year-end financial statements. Proper accounting for businesses might include earnings, costs, profits, losses, interests, taxes, assets, and depreciation among other key financial information.
How does good bookkeeping help business owners
Ask any successful business owner out there and they will wholeheartedly agree that bookkeeping plays a vital part of managing short term risk and long-term success of their business. This is because bookkeeping gives an accurate picture of every financial transaction done in a business, from day-to-day cash exchanges to long-term agreements. This allows savvy business owners to understand the state of their operation finances and plan with smarter business decisions
On the other hand, precise bookkeeping also protects a business from any risk of losses or disputes. For example, there might be a misunderstanding between the business and a vendor. In other cases, government authorities might decide to audit the business. With a clean financial record, a business can steer clear of any tax penalties or financial errors including preventing fraud from customers, vendors, or even internal employees
Outsourcing its bookkeeping needs, on the other hand, is valuable for small businesses as it reduces the need to manage minor details. From payroll taxes to managing invoices and payments, professional bookkeeping service providers can save you from wasting precious time!
Why is bookkeeping important for businesses & why business owners should consider hiring bookkeeping service providers
Make room for business growth
All businesses are built on the foundation of growth, either in size or capacity. Bookkeeping is a key step to expanding businesses profits and can capture profit areas that might have gone unnoticed without clear financial records.
That’s why it’s important that businesses are invested in bookkeeping and accounting services in Singapore. These services provide relevant, accurate and insightful information while keeping the business in line with changes in rules and regulations from government departments.
As a business grows, it will become a challenge to keep every transaction record in check. Therefore, quality bookkeeping and accounting services in Singapore can help businesses keep their internal processes in check while focusing on business growth.
Optimal efficiency for your business’s needs
One of the best advantages of bookkeeping and accounting service providers is that they are constantly updated with cutting edge technology and methodologies.
This will not only save time and expenses for your business when compared to methods and systems from years before, it is often a significant improvement in terms of accuracy and efficiency.
Businesses can also save themselves from putting their hard-earned resources into machinery, software or headcount that can be cost-efficiently outsourced to service providers externally.
Gain key financial advice
Another key pillar of accounting is acting as advisors or counsellors for a business’s financial decisions.
These decisions can include major investments and expansions that will affect the business significantly. They’re advised based on the financial position of the business that a professional accountant will have the full picture on. This not only protects a business from making wrong financial decisions, it will set a positive trajectory for its future.
Flexibility & scalability
Lastly, the appeal of being flexible and scalable is the driving factor of why small businesses are keen to outsource their bookkeeping services to a professional firm.
This is due to firms like Sprout Asia that hires professional bookkeepers and Certified Public Accountants (CPAs) to proficiently handle their clients’ requirements. They are often skilled veterans in their field and will save the business a significant amount of time and money compared to employing a full-time staff and investing into hardware and software.
However, do note that in Singapore, it is a requirement for all companies to prepare their financial accounts in compliance with the Singapore Financial Reporting Standards. If not done in the correct manner, it results in a penalty, a fine or a court summon charged to the business.
Therefore, if you’re thinking of hiring a professional bookkeeping and accounting service keep in mind that they must comply with the legislative regulations of Accounting and Corporate Regulatory Authority (ACRA) under accounting authorities of Singapore.
Unlock the hidden opportunities within your business with Sprout Asia
Our team at Sprout provides professional accounting and bookkeeping services with exceptional quality and accuracy at affordable prices. We implement the latest accounting technology that reduces data-entry & paperwork to focus on providing solid insights to support your business in making major business decisions.
Arrange for a complimentary consultation if you’re interested in learning about Sprout’s approach to top-tier accounting and bookkeeping service!