For companies, there are 3 options when it comes to handling your company’s accounts.
- You do it yourself
- You hire someone in the company to do it
- You outsource your accounting and bookkeeping matters to an external company (Like us!)
Why some cannot just do it themselves?
Bookkeeping is not that difficult but it is also something that is not easy. You should not be using excel spreadsheets to table “money in” and “money out”. That is a ledger record of all the transactions and is not proper bookkeeping. You will need to be able to put those numbers into things like balance sheet, profit and loss and cash flow statements. These are the 3 basic management reports that you should be able to put together. They are essential in giving business owners a snapshot of their business and whether the business is profitable or not. You will need these figures to file your corporate taxes as well. Things like buying a computer or a printer are not just an expense. They are assets that will go on a company’s balance sheet and need to be depreciated accordingly. There are certain tax treatments for various assets.
Some business owners or company directors may choose not to do it themselves even if they know how to. Bookkeeping is tedious work and at times resolving the books is arduous and frustrating especially since the main purpose of the profit-driven company is to, well, make profits!
Why some companies do not want to hire someone in the company to do it?
Mainly cost. It may cost anywhere in the range of $2500 to $3000 a month for a person to handle administrative-accounting matters. If you add the CPF portion to the calculation, that is a substantial amount if the number of transactions is not enough to justify hiring an in house accounting. It may make sense further down the road when the business has grown and an offsite accountant may not be able to handle the vigours of a very productive business with multiple invoices and bills being issued on a daily basis. Till then, perhaps it might just be better to get someone else to do it for you.
Isn’t it difficult to work with someone offsite?
In the past perhaps it might have been. Especially in current times when safe distancing issues have caused us to work virtually, not every company can get a part time bookkeeper to come into the office and tally up all bills, receipts and invoices. This is where cloud accounting software comes in handy. In the past few years, cloud accounting software like Xero.com have made accounting a whole lot easier. Mobile apps have made it easier to record bills, receipts and invoices in the cloud. This minimises the need for a bookkeeper to travel to your office or for you to send all the necessary documents to the bookkeeper’s office. If you would like to see work done, you can always log into the cloud accounting software from where you are any time of the day.
Is it essential to keep proper accounts? Can I just use excel to keep a record of my expenses and income?
In a nutshell, yes it is important to keep proper accounts and you should never use excel to just keep a record of your expenses and income. Such a simplistic record is more like journal entries then management reports of the company. The basis management reports are reports like profit and loss, balance sheet and cash flow statements. Such statements show a record of the company’s financial position. For example, if you purchase a laptop, that goes into your accounts as an expense but the laptop will also go onto your balance sheet which can be depreciated. Proper accounting and financial statements is necessary when submitting annual returns to the registrar. Moreover, a good accountant will help the company to minimise tax liabilities through proper tax planning. The monies you save through proper tax planning may be a lot more than what you pay to your accountant! Moreover, if you intend to apply for government grants, you will need to submit your financial statements. That casual excel document is not going to be accepted.
What other services can be done offsite?
You can also task your accountant to handle things like payroll services. This will include making monthly CPF contributions, creating payslips and making salary payments. Such processes can also done through cloud software. You can once again access all work that is done through this cloud software.
Our company works with businesses to put their accounts in order, minimise their tax liabilities through tax planning and assist companies to apply for relevant grants and incentives which may be of benefit to them. We help to maintain clients’ accounts offsite. If there are discrepancies we will schedule a Zoom session or, if permitted, visit the client’s office onsite to resolve the issue. We are a Xero Certified Partner (Accounting) and Talenox Partner (HR). There are generous grants that can defray the cost of getting onto these platforms. You can approach us for more information.
If you need assistance relating to your company’s accounting matters, you may contact us at [email protected].
When in doubt, seek legal advice or consult an experienced ACRA Filing Agent.
The editorial team at Singapore Secretary Services
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