The Low Down on Company Bookkeeping and Accounts
This is the daily upkeep of documents and recording of financial transactions occurring when running a business. Who does this function normally? Well, ideally, get your admin staff to do this function in full. If you are just starting up, whilst there could be many benefits for you to get this done at your end, you may wish to consider getting a part-time admin staff or a freelance bookkeeper to pop over and sort this out for you periodically.
Whichever path you choose, I think it would be very beneficial if you could attend our Bookkeeping Made Easy course for admin staff and directors. A very hands-on 16-hour course which will get you going in no time.
When does accounting come into the picture?
When these records are tallied with bank transactions and other reports such as your e-commerce sales reports etc, reports can be generated and adjustments can be raised to make sure these reports are compliant with Generally Accepted Accounting Principles (GAAP) and Singapore Financial Reporting Standards (SFRS).
These reports are known as Management Accounts; these comprise at the very least* a Trial Balance, Balance Sheet, Income Statement and Cash Flow Statement. These can be handled totally within your company if you have a full understanding of what’s expected and a fully-functioning Finance Department and CFO.
When should I get this done?
In the past, when things were so much simpler, small companies kept shoe-box accounts i.e. all their receipts and documents folded and chuck into old shoeboxes for a full year, then its off to accountants who will have to draw up everything based on half-rotted and faded thermal documents, directors’ memory and A LOT of guesswork.
This causes a myriad of problems, as you can imagine, from missing documents, unexplained transactions, paying extra taxes due to unsupported expenses and the most dreaded late submissions to ACRA and IRAS which would definitely result in fines (bye-bye to the planned nice dinner at a fancy restaurant).
What we suggest is:
Bookkeeping - get this done DAILY and update everything into a system. At Accounting Superhero, we heavily recommend using Xero. Your admin staff will love it.
Accounting - get this done MONTHLY, and by a qualified accountant**, no less. Why? Because this part requires a bit more technical skills which your admin may not be trained in and it makes sense to get a professional involved to ensure the reports generated are accurate, up-to-scratch and dependable for you to make sound business decisions. Makes sense?
When do I need help?
Whilst some companies choose to wholly outsource this function to external accountants and bookkeeping professionals, we at Accounting Superhero advise a collaborative approach. This will save you time and money, you’ll never have to hire more staff than you really need and you always have a professional external team who will keep things running smoothly no matter how you scale your business.
And very importantly, this approach optimises the partnership between your internal admin staff and a dependable and experienced external CFO in a most cost-effective approach giving you the most value.