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Why Outsource Your Bookkeeping?
Financial management including bookeeping is an essential backroom process of every business, whether large or small. Your books helps you to keep track of business cashflow on a daily basis. Business financial analysis, based on transactional ledger-keeping, is a key ingredient in the success of every business.
Accurate and up-to-date financial records enables businesses to answer important questions such as -
- Is your business making money?
- Which product / service is most profitable?
- Is your business on sound financial ground, or are troubles lurking ahead?
- Are your overheads increasing faster than your revenue?
- Are your clients paying you on time? What is the size of your debt?
- Is there any item of expenditure which appears to be out of control?
1. Sound Cash Flow Management
A sound bookkeeping systems acts as a foundation, where all this valuable financial information can be constructed.
The IRAS advises every taxpayer — business or individual — to use consistent and established accounting methods to report income and expenses. It recommends that businesses implement accounting software and deploy trained bookkeeping personnel to keep accurate financial ledgers and facilitate access to timely financial information.
Here are some of their reasons:
Budgeting enables businesses to be on track by forecasting cash needs and helping in controlling expenditure. Up to date and accurate ledgers enables business owners to have timely financial information for preparing budgets and cashflow forecasts.
2. Business Planning & Direction
Business owners need accurate evaluation of financial consequences in order to take any critical business decision.
3. Business Loans & Investment Financing
Financial institutions and Investors demand financial statements such as balance sheet, income statements for the most current and prior years, as well as your projected statements for a clear financial snapshot of your business. Without this, an investment or loan to you will be a risk that bankers or investors will not be willing to undertake.
4. Regulatory Compliance & Filing of Annual Returns
It is mandatory for businesses — proprietorship, partnership, or corporation — to file income tax return and pay income taxes. Poor bookkeeping may result in underpaying or overpaying your taxes and/or penalties for late filing.
5. Compliance with Employer's CPF Obligations
Sound bookkeeping practices which includes a payroll management system make compliance with your CPF obligations hassle-free.
6. Compliance with GST Regulations
Accurate bookkeeping records facilitates timely GST reports and avoids unncessary hassle in making retrospective adjustments for over or under-payment of GST.
OTHER ARTICLES IN OUR ARCHIVE
1. Bookkeeping Basics For Lawyers
2. Client Account Management
3. Measuring Performance in a Professional Services Firm