On launching startups (Also see Reasons to Engage an Accounting Service for Your New Startup), most entrepreneurs prefer to keep the financial data in their heads to taking on a bookkeeping process. Compared to handling an application software, they find it easier to keep it in their head, in addition to the convenience it gives. They would rather not use such a system as these entrepreneurs share the same belief that all their important data will vanish in an instant during a system crash.
When you don’t use an application software to keep the data, there’s a higher chance of you forgetting tax filing deadlines, cash flow status of the company, ledgers’ details and other important things. All these potential incidents could be dangerous for any firm. Which explains the importance of maintaining a bookkeeping process to avoid any discrepancies.
Bookkeeping is not as complicated as it sounds. It is an essential task for recording each and every transaction related to the company. By doing so, you are allowing yourself to get an idea about the actual state of your firm. To understand how to properly manage your records (Also see Common Accounting Mistakes Your Business Must Avoid), you should follow certain accounting tips that will help you in the long run. Here are four accounting tips that will guide you along the path for Singapore startups!
1. Estimate major expenses
Every business goes through a roller-coaster ride of various ups as well as downs. You have to prepare your finances such that your startup stays afloat in bad times too. Golden opportunities like a software upgrade or smart business opportunity will happen along the way, and when you don’t manage your records well, you can potentially lose these opportunities due to shortfalls in the capital. Make sure you forecast large expenses beforehand so that you do not lose any life-changing opportunities.
2. Supervise expenditures
In a business, small transactions could also pile up a large sum if it keeps going on unmonitored. In order to avoid such circumstances, entrepreneurs should use credit cards. You can make use of these cards in order to track the company’s expenditure from business lunches to stationery items.
Credit cards come in handy while filing tax returns in Singapore, and they definitely play a better role in a bookkeeping process in terms of cash outlay. Also, it is convenient to carry a credit card with you as compared to cash in large amounts.
3. Keep records
If an entrepreneur does not pay much attention to a bookkeeping system then, he would end up paying more taxes than he actually has to. There is only one way to avoid this blunder and that is through bookkeeping. You should keep a record of all your business transactions accurately.
It is the most convenient way to avoid confusions regarding loans, revenues, funds, or other financial transactions. If you find it hassle to do the transactions on paper, you can opt for an application software like Excel or Notebook on your desktop or laptop instead.
4. Allocate taxes
When it comes to taxes, you wouldn’t want to have any late payments or unpaid taxes. Unpaid taxes could create a lot of problems for entrepreneurs. It is best to allocate money just for taxes in order to avoid problems. If not, then, you may have to face strict measures like additional interests or penalties as assigned by the IRAS. So, you should always mark deadlines for tax filings to avoid penalties.
Thus, the above-listed tips are surely going to help you in organizing your business transactions via a bookkeeping system. It might be confusing so you should enquire with an experienced company that provides accounting services in Singapore for a better management of our business expenses.