Bookkeeping is an essential task in every company. bookkeeping is the reporting of all cash transactions in the company. This is a record that must be maintained by the company for its purposes and submission to the ACRA. All the entries must be meticulously entered for scrutiny by the authorities. The person who does the job must give full attention to the job as even if one entry is missing the company could be penalized. This is why companies should avail of bookkeeping services in Singapore and get it done properly.
Understanding Bookkeeping And Its Functions
Bookkeeping is the process of recording all the financial transactions of a company. This will help companies to check any transaction of any date without any problems. It helps a lot in making a lot of decisions that can affect the company’s functioning and profits. Companies must have one person dedicated to the job as it involves a lot of time-consuming work.
Bookkeeping helps companies to know their financial performance. It can give a lot of information about strategic decisions. It also helps the companies to target their income and expenditure properly. companies can also plan their expenses if they know the position on a real-time basis. Bookkeeping helps them to do that. Bookkeeping also helps the company to know the money that is due to them.
It is also a record that functions as a guideline for investors. If someone is interested in investing in the company, a look at the books can tell them how the company is performing. It will also tell them whether the company is planning its expenditure and spending according to what it earns. It will give an insight into how the company is being managed. Even financial institutions will use the record for deciding on investing in the company.
How Is Bookkeeping Done?
The transaction details are written daily. For each of these transactions, there must be a document that supports it. It could be a sales invoice, sales receipt, a bill from the supplier, payment from a customer, payment made to a supplier, bank payments, etc. The documents are essential for audit and it is essential to keep them safe.
The traditional method of bookkeeping is the double-entry method where there are two entries for each transaction. Each entry will affect two ledgers. There will be a credit entry in one account and a debit entry in a separate account. This method helps to ensure that there is no error in entries. At any time, these two can be reconciled.
With the arrival of new technologies bookkeeping also has become computerized. Earlier these entries were made in two Excel sheets. This needed a lot of storage and companies found it difficult to maintain the records for many years. Then came the accounting software that helped companies to make a single entry that affected various ledgers. But the software was costly and that too needed storage space. It is now possible to hand over the job to excellent service providers in Singapore who will do it perfectly.
What Does The Bookkeeping Service Providers Offer You?
There are a variety of services that the bookkeeping company offers when you avail of their services. They will keep the general ledger with all the entry details. They will prepare a record of all the money that is payable by you to various parties including suppliers, banks, etc. The services also offer to make a record of the money that you must get from your customers. It is very important to keep this updated so that you can collect the money on time.
The reconciliation of various accounts is very important. There are different accounts in a company. At the least, there are bank and cash accounts in every company. Both these must be reconciled to ensure that there have been no fraudulent activities. This job is done by the service providers regularly. They will also prepare the register that will record the fixed assets of the company.
The service providers will perform the important activity of planning the cash flow and budgeting your expenses. This is a very important thing for every company to do. Depending on the receipt of money and what is remaining to be collected the company must plan the cash flow for future purchases and regular expenses. Based on the revenue earned the company must also budget the future expenses and see that they don’t plan expenses more than what they will be earning.
They will prepare all the necessary statements that you will require to be sent to various people and agencies. They will prepare the outstanding statements which can be sent to the customers for informing them of their pending payment. The agency will also prepare the reports on a monthly, quarterly and annual basis. The information that is crucial to the management for running the company will be extracted and given to the management. They will ensure that you meet all your obligations to the government authorities.
How Do You Get Your Proposal From The Service Provider?
Suppose you want to employ the services of a service provider for maintaining your books you must first entrust them with enough information. Whether you are a new company or an existing one, you must provide them with adequate information for them to quote you a reasonably correct price for the services. They must know the volume of work that they will be doing for you. This is why they will need all the information.
If you are a new company you must first all the company details like the name of the company and the nature of business. You must tell them when you have fixed your year-end. They must know if there is any regular interval for monitoring your sales and purchases. This will tell them how often they will need to prepare the reports for these. You must tell them the anticipated monthly income and the number of transactions that is likely to happen. This should include both sales, purchase and expense transactions.
It will be useful to let them know if you are going to register for GST. They will want to have information about hire-purchases, loans, and investments so that they can give a correct proposal. They will need to know whether you are operating in more than one currency. The number of debtors, creditors and the period for preparing the reports must also be informed in advance. Tell them whether you already have the software and if you need one of their people to come and work at your office.
New companies must provide the service providers their latest financial statement and the detailed statement of income. The balance sheet must also be handed over to the service providers. It will help them send you an accurate proposal for the job. The other documents needed will include the latest bank reconciliation, the latest GST return that was filed, and the details of various fees like accounting, audit, tax, and fees for corporate secretarial paid.
In What Way Do The Service Providers Work With You?
Once you have finalized on a service provider and the contract has been signed with them, they will assign a dedicated person who will handle your account. This person will interact with the concerned members in your office to ensure that daily updating of data is done. The company must also share a few documents with the service providers for daily recording of all the data. Depending on the documents you share the accountant can prepare the accounts ledger. The service provider will also prepare the periodical reports necessary to be submitted to the authorities.
You must submit the orders or invoices for reporting the sale. The purchase orders you placed and the corresponding invoices must also be submitted for entering the purchase in the ledger. Banks’ statements, expense vouchers, and journal vouchers must also be shared so that these entries can be made regularly. Agreement for renting the office or other buildings and the rent receipts must be handed over. You must share the supplier invoices to be paid and your invoices for which you must get payment from your customers.
When you hand over the job to the service providers you are relieving your employees from the monotonous job. You can use your workforce in a better manner. The service providers have experts who can do the job in a better manner. They will make sure that your books are maintained well and you remain compliant with the rules.