5 Costly Accounting Mistakes Your Singapore Business Should Avoid
An error in accounting service of your business can make you pay, no matter how big or small the mistake is. Unfortunately, mistakes are inherent parts of a business. But, many common mistakes can be avoided with advance planning and preparation. Thus, you must be careful in reporting, especially in the initial phase of your entrepreneurship. Be sure to maintain a correct accounting method in order to keep your business thriving.
Singapore authority is very stringent about law abidance. It is highly essential to comply with the statutory obligations of ACRA (The Accounting & Corporate Regulatory Authority), the regulatory body that oversees the accounting related compliance. Some of the common mistakes that many small business owners of Singapore tend to commit in the course of their operation are elaborated below. You are advised to keep these on the do-not-do list.
Mistake1# Not Hiring a Good Accounting Firm in Singapore:
Many times, small business owners think that they have very good control over all aspects of their business and they wear many hats to save cost. But, this move can sometimes cost big bucks instead. Professional accounting services Singapore not only streamline the accounting functions but add value to the business.
Outsourcing to the accounting services is a lucrative option when it comes to tax planning and calculation. These are more conversant with the tax laws of than the ordinary business owners. They will let you lower tax liability and be compliant with the regulations of the authorities. And leave more time with you which you may focus on core competencies. The job of these accounting services will not just be confined to tax services, but is also extended to the other ambit of accounting functions.
Mistake2# Not Working With a Budget:
For a business, budgeting is very important to forecast future sales, cash collections and spending. It will further help you in creating disbursement plan for your fund. It will let the business owner know what they have on hand to invest and plan for future accordingly. Precisely, with a properly planned budget, you have a baseline to evaluate your business operating outcomes. Without having an effective budget, an entrepreneur can not gauge the various costs of business. You may end up spending more money than what is required on a project, which may or may not worth the expenses.
Mistake3# Not Keeping Personal and Business Finance Separate:
More often than not, one of the most common accounting mistakes business owners do is not keeping separate accounts for their personal and business finances. When you maintain those separately, you can easily keep a track of expenses of the business and personal use because your business is deemed to be a separate entity. As the business grows, keeping the separate account of Singapore companies become crucial to stay compliant with the law of ACRA. Above all, keeping business finance separate can help you manage tax liability of your company more efficiently.
Mistake 4# Not Staying on Top of Accounts Payable and Receivable:
As the names clearly suggest, accounts payable is money “to be paid” by your business to a product or services provider, whereas account receivable is the money that a customer owes you against the product or service you provided. The key aspect of proper accounting is to keep a record of receivables and payables in a perfect way so as to ensure that the cash flow of the business is regularly tracked. You must issue an invoice and record the receivable straightaway upon received. Be sure to reconcile those to avoid confusion in later days, which may lead to overpaying of taxes. The same process is also applicable for payable as well.
Mistake 5# Considering Accounting Software as an Alternative to Third-Party Firm:
Shelling out a big chunk of money in an accounting software does not always makes sense for businesses. Moreover, It does not assure proper management of accounting functions in business. Your resources may not be that expert tech savvy to handle the system efficiently and may need training which costs money. Hence, it is better to opt to outsource to some good accounting firms in Singapore. Most importantly, a trustworthy and reputed accounting firm provides quality service leveraging the talents of professional accountants and power of advanced technology-driven software. It would save you from investing in an expensive system. Surprisingly, you are getting the benefits of the software solutions even if you do not buy those in actual.
The financial aspect of your business has to be taken care of. It is the core determinant factor that can either make or break your business. Avoiding these mistakes help you grow in the areas you struggle with and take the business to the next level. In a place like Singapore, where it is tough for businesses to stay out of the competition, you are advised to appoint a good accounting service such as SBS Consulting. Such firm will guide you in every facet of Singapore accounting. Precisely, partnering with a good accounting firm Singapore is important for your business to reach the path of success.