Bookkeeping is the act of recording every transaction systematically. In the management of businesses, it helps the owner get an idea about every business transaction efficiently. It might sound a bit complex, but actually, it is not. There are certain things that you need to know before you take on the task of bookkeeping for your small businesses. These tips are going to help you in becoming an efficient bookkeeper. So let’s move on to them!
1. Know the Auditing Process
In the very first place, a bookkeeper should know at least some of the basics of Singapore’s audit process. For instance, there is no exemption from the auditing process for corporate shareholders who own stocks in companies that have less than 20 shareholders or have annual revenue lower than S$5 million.
The ones who are exempted from the audit process can submit the director’s reports or unaudited financial statements. Bookkeeping is not about analysing financial reports. It is also a way different from filling taxes or annual reports with the IRAS and ACRA, respectively.
2. Know IRAS and SFRS
It is imperative to know about SFRS in Singapore. A bookkeeper should know about different depreciation methods such as an accelerated or a straight line for any statement. The other special provisions as per SFRS include deferred tax, inventory valuation, and real-estate valuation. On the other hand, SFRS is slightly different from IFRS (International Financial Reporting Standards). So, a good knowledge over SFRS will help a bookkeeper to supplement IFRS information as well.
It is equally important to gain knowledge about the IRAS (Inland Revenue Authority of Singapore) to assert taxes. For instance, some firms are eligible for PIC (Productivity and Innovation Credit) and a tax agent in Singapore would keep track of items that can be claimed for PIC.
3. Make Records
Most finance managers find it too complicated to reason out incongruities between recorded and actual expenses when expenses are not recorded well. A bookkeeper has to take a systematic approach throughout the process of bookkeeping. He has to record every business transaction as per SFRS to avoid discrepancies later on. So, a good bookkeeper should record everything including small expenses such as a consumer lunch worth of S$50.
4. Placement of Items
A bookkeeper should also know how to treat profits in accordance with IRAS and SFRS. Most of the time, some things are placed under different sections. For instance, a manager will treat earnings (Also see How to Measure Revenue) differently for taxation and accounting purposes. So, bookkeepers must know how to place items in their accounting books.
5. Know Receivables and Payables
In order to ensure compliance and ethics, large firms have to follow a strict auditing process whereas smaller firm owners can be flexible while bypassing the audit. But they should prepare financial statements accurately.
A bookkeeper should make sure that all business transactions are consistent with the bank statements for the month. If any discrepancy is found, then he should look for a comprehensive bank statement to know about bank balances and cash.
6. Real-Time Bookkeeping
In the end, bookkeeping has become even more efficient with the use of the most recent cloud-based accounting applications which allows you to record real-time transactions. Real-time accounting also helps in the management of a firm’s finances and productions efficiently.
These are some tips that you have to keep in mind while starting the bookkeeping process for managing your small businesses. It is of utmost importance to pay attention to the various regulations of accounting services in Singapore for better management.