Small business owners are generally hardworking and very passionate of their job. They are positive, resilient, and are seriously dedicated to ensure a profitable and sustainable business. However, most of them aren’t accountants. And if one decides to start a business, it’s not uncommon to feel lost in finding where to begin with the business’ accounting.
For small business owners, it’s likely that they are the ones responsible for making sure that their books are in order. If you’re among those entrepreneurs with no formal education and experiences about accounting, perhaps your bookkeeping practices are non-existent—and thus utilization of accounting software comes in handy. Here are the some points you need to know to keep your business checked and on track.
How to Begin
One best place to start your bookkeeping is with cash basis accounting. This is very basic and very simple recording—cash in, cash out record. Take note when you get paid for a sale and take note when you spend. Make sure to record every in and out of money when it happens. Many Singapore businesses use this accounting method with an accounting software from Singapore as a springboard to a more complex system.
What to Record
What to record? Actually, everything! It is crucial to keep track of all incoming and outgoing payments. Keep in mind that the more in-depth your records, the easier it is to check and manage your finances. Here are the things you need to keep records of:
• The product you sold
• Details of the client you sold it to
• The price of the product
• The date and time you received the payment
• The amount of sales tax collected (if applicable)
• The taxes paid
• Your employees’ salaries
• Business expenses (inventory, office supplies, renovation, etc)
• The space rent and utility bills you pay
As a business owner, it should be a number one priority to keep track of every dollar that goes in and out of your company—not only the ones you see on a day-to-day basis but also the monthly and annual expenses. Keep in mind that every expense is deductible to your income—even a cup of coffee with a prospect partner or the insurance you purchased for yourself.
How to Record
Your organization is going to affect your bookkeeping quality. Ideally, you should be recording your transactions every day.
Most small businesses in Singapore use Excel spreadsheets to record business transactions. While this method is enough to log financial transactions, rarely does this encompass a complete record or allow you to visualize your net income. Don’t worry though, there is a variety of accounting software programs in the market to make bookkeeping not take as much time as it sounds.
With accounting software, you are encouraged to log data specifically to its designated places to make recording and checking easier. Quality bookkeeping isn’t just about for filing taxes, but also about understanding your business and knowing the amount of liquidity you have on-hand to work with.
How to Ensure Quality Bookkeeping
Proper accounting and bookkeeping is one of the easiest areas to procrastinate on, but it’s one of the most critical elements as well to creating sustainable and profitable business. Luckily, you don’t need to have a degree in accounting or have professional experience in related fields to become an accountant of your own corporation. With the right accounting software, it’s easy to create accurate reports to help you manage your finances better and ensure your business stays on top of its game.
Generally, bookkeeping is a necessity for both big and small companies. It allows owners to facilitate their business and enable them to make educated decisions for the betterment of the company. To ensure real-time data encoding and accurate data records, purchase the right accounting software program for your business.