Bookkeeping is maintaining records of financial transactions for future reference. It is a part of accounting and is used by companies and different organizations. An individual hired by an organization or a business to perform the bookkeeping process is referred to as a bookkeeper. It is the responsibility of the bookkeeper to properly record, organize and classify every transaction that takes place during business dealings.
Business dealings may include transactions like payments and receipts by an organization or an individual, purchase, or sales. The procedure for recording financial transactions is a bookkeeping process and standard methods of bookkeeping include single entry and double-entry systems.
There are many bookkeeping services available for the easy reach of businesses or organizations.
Bookkeeping is the monitoring of every financial transaction that takes place in the entire work period of the business, be it the transactions at the starting of the business or the final transactions before the dissolving of the business. Every transaction needs to be accurately recorded and organized.
A transaction can only be recorded if the supporting documents are provided. These documents can be in the form of a purchase order, an invoice, a receipt, or any other type of proof validating the transaction.
Bookkeeping can be done by either using traditional methods or by using spreadsheet software like MS Excel. The traditional method included the writing of day books. These day books can be ledgers, cash books, purchase books, etc. With the constant updates in technology, most businesses are switching to bookkeeping computer software available in the market.
A lot of professional bookkeeping services are available, and businesses can contact the ones that fit their criteria.
Difference between accounting and bookkeeping:
Bookkeeping is a part of the accounting process. Bookkeeping is simply the maintenance of financial transaction records whereas accounting is the analysis, classification, interpretation, reporting, and summarization of the recorded financial data. This helps in the timely and accurate tax payments.
Many bookkeeping services Singapore firms have entered the market to provide their services and solutions regarding accounting and bookkeeping.
Outcomes of grim bookkeeping:
Improper bookkeeping can have adverse effects on the business. As the business flourishes, more records need to be maintained. Advanced accounting systems and systematic back office are the requirements for running a business successfully. Professional bookkeeping services provide solutions to deal with such issues.
- Know your business: Before starting any business it is important to gather sufficient information regarding it. Investment cost, probable returns, other expenses, such aspects need to be analyzed. A proper accounting and bookkeeping system helps to monitor these aspects.
- Cash flow problems: Without an efficient bookkeeping system, issues related to cash flow will come into focus. Automated invoice generation, proper monitoring of payments and expenses, efficient collection, will avoid getting into cash flow issues. Bookkeeping services are capable of managing such issues.
- Starting without strategy: Strategizing before starting can be fruitful in the long run. Executing without a proper strategy will lead to unsuccessful business operations. A vision, proper planning, and an efficient back-end office contribute to the success of your business.
- Inaccurate expense tracking: To know whether your business is running in loss or profit, accurate expense tracking is important. If the expenditure incurred is properly recorded, then it becomes easy to compare cash inflow and outflow and deduce the profit or loss.
- Unknown mistakes in an invoice: With a strong accounting system, generating invoices and handling timely collections can be done efficiently.
- Increased chances of internal fraud: Small businesses or companies are more at the risk of facing internal frauds. The absence of planning and division of power are the main reasons that a business suffers internal fraud. External accounting and bookkeeping services, timely balance checks, division of power can keep a hold on such a major issue.
- Using an unoptimized accounting system: Setting up with the present technological trends is beneficial for business. Having efficient back-end support and optimized pricing models helps to gain large profits.
- Missing tax deadlines: While auditing if problems are found in the bookkeeping, then it directly affects the amount of tax that the business has to pay, and you will miss the deadlines. A systematic bookkeeping system will help to manage your taxes on time.
Bookkeeping firm Singapore:
A lot of professional bookkeeping services are available in Singapore like Bestar. These service providers will help you solve all bookkeeping-related problems.
Looking for best bookkeeping services in Singapore? Contact us today.