Good bookkeeping practices are necessary to file taxes, attract new investors, qualify for business financing and overall stay on top of your financial situation. Bookkeeping is a part of accounting services. Simply, it is the process of maintaining records of all financial transactions of a business in a general ledger. A general ledger is a physical book or a digital spreadsheet that is used to track purchases, investments, revenue, and other information. They can also be recorded in sub-ledgers for better data organisation.
Bookkeeping, regardless of scale, is essential for any business and is oftentimes a tedious and time-consuming task. At times, the process can be complicated, resulting in errors that can lead to greater issues. Managing it in-house is also not ideal for the cost-effectiveness or productivity of a company. As a result, many organisations outsource this function to accounting and bookkeeping services in Singapore.
Whether you conduct bookkeeping in-house or outsource it to an accounting service firm, there are certain practices you can follow to keep the process running smoothly. Here are some best practices to successfully manage your funds and, eventually, grow your business.
1. Separate Personal and Business Finances
It is essential to keep your personal and business finances separate to minimise cash flow issues and auditing difficulties. Therefore, you should never use company funds to make personal purchases or conduct business with private funds. Maintain separate bank accounts and credit cards to ensure that you have a clear understanding of your company’s financial situation.
2. Track Revenue and Expenses
While you should pay attention to your general financial situation, you should also focus on individual transactions. Evaluating and categorising your revenue and expense streams can assist you in discovering areas of strength and growth. If you decide to work with an accounting company in Singapore, you can also get their financial advice on these developments.
3. Reconcile Bank Statements
Regular bank statement reconciliation and daily checking of your bank transactions allow you to rectify any financial concerns you find quickly. If your cash on hand does not match your book balance, it signals an issue that must be promptly addressed. Maintaining a record of your bank statements assists you in detecting fraud and bank errors.
4. Establish Internal Controls
As bookkeeping is susceptible to fraud, internal controls should be implemented to mitigate the risk. Therefore, ensure that no single employee is in control of authorisation, record keeping, and asset custody at the same time.
5. Advance Tax Planning
Tax planning enables you to make strategic decisions throughout the year to reduce your overall tax burden and prevent fines. Maintaining communication with your tax accountant, whether an in-house specialist or one from a bookkeeping service in Singapore, ensures that you have everything organised when it comes to filing taxes.
6. Maintain Accurate Records
Maintaining accurate records is critical for effective bookkeeping. In addition to monitoring all transactions, you should also keep your records in order. Keeping all of your data in one place and categorising your transactions will help you stay organised.
7. Seek Expert Assistance
If you find yourself in a situation where you require professional support, connect with bookkeeping management service specialists to clarify your uncertainties. An external service provider can assist you in setting up your systems and offer ongoing support.
Accounting Consultancy – Providing Reliable Accounting Services in Singapore
With over two decades of experience in the industry, Accounting Consultancy is a one-stop service destination for bookkeeping services in Singapore. From payroll management and taxation to financial statement compilation, our dedicated team will handle everything for you. As a client-focused firm, we take a personalised approach when offering corporate solutions for your business. If you need a dependable external service provider to manage your bookkeeping, reach out to us today!