When it comes to running a successful business in Singapore, there are a lot of important factors to consider. From marketing and sales to product development and customer service, every aspect of the business needs to be carefully managed in order to achieve success. As a result, one area that is often overlooked is accounting. However, keeping accurate financial records is essential for any business, no matter what size. Outsourcing accounting services can be a great way to ensure that your records are kept up-to-date and error-free.
In fact, there are a number of accounting services that businesses can use to maintain financial accuracy and compliance. Accounting and bookkeeping are one of the most basic and essential services, helping you to track and organise the financial transactions made by your business on a daily basis. Using cloud-based software like Xero, you can get real-time visibility on your revenue and expenses, which can then be used to prepare financial statements. Tax preparation is another common service, which involves ensuring that a business is correctly filing its taxes in accordance with government regulations in Singapore. This can be a complex process, particularly for businesses with multiple locations or international operations.
If you are outsourcing your accounting needs, you want to be confident that the service provider you have chosen is doing a good job. You can start by asking these five questions when deciding on accounting services but once you have them onboard, here are some indicators that your accounting service provider is on the right track:
When it comes to your finances, accuracy is essential. You need an accounting service provider who can deliver the reliable numbers you need to make sound decisions for your business. As such, they should be qualified as well as familiar with adhering to accounting principles in Singapore. Besides ensuring that your accounting service provider is a qualified Chartered Accountant, they should also be well-versed in using the accounting software to generate accurate and meaningful reports. This will give you the assurance that your financial records are in good hands. A good accounting service provider can also add value by helping businesses transform accurate financial data into actionable insights.
At the end of every financial year, businesses need to prepare their annual financial statements. This process includes making any necessary adjustments to accurately report your financial performance. During this period, the accounting firm should be proactive in advising you on the possible year-end adjustments to arrive at the correct financial position of the company at Financial Year End (FYE). Common types of adjustments include inventory on hand, accruals, contract assets, contract liabilities, sales and purchase cutoff. With the right advice, this can save you a significant amount of time in the long run, and free up more funds to invest in other areas of your business.
Especially during tax season in Singapore, this is where an accounting service provider can be a valuable asset. An experienced accounting firm will be familiar with the ins and outs of the tax returns and can help to ensure that your business is in compliance with all relevant regulations. They can also help to ensure consistency from one year to the next, which can make it easier to spot any potential red flags.
For example, your accounting service provider would check if the income tax expense in the accounts agrees to the corporate tax return filed with the Inland Revenue Authority of Singapore (IRAS). They may also verify if the Goods and Services Tax (GST) receivable or payable balance at Financial Year End agrees to the GST return for the last quarter filed with IRAS. In addition, they can also offer tax planning advice to help minimise your tax liability in Singapore.
As the final deliverables of accounting for the year, creating accurate financial statements requires understanding not only basic accounting principles but also how your specific industry operates. For example, an e-commerce business would handle operations and finances differently from medical practices and dental clinics. Your accounting service provider should be familiar with the common day-to-day transactions in your business and be able to provide the specialised services that you need.
In general, your financial statements will comprise a statement of comprehensive income, statement of financial position, statement of changes in equity as well statement of cash flows. There may also be supplemental notes that details key balances for the financial year, significant accounting policies and any other important information. To learn more, you can check out our guide on the full preparation of financial statements.
Overall, your provider must be responsive to your questions and concerns. They should be able to provide clear and concise answers to any questions you have about your finances. If they’re unable to do so, it may be time to consider finding a new provider.
Once you’ve found an accounting service provider who is a good fit for your business, you will have a valuable partner in helping you thrive for years to come. To get started, reach out to our team at Chartsworth for our full suite of services, including accounting and financial statements services in Singapore today.