No matter what stage your business is at, having a bookkeeper can be the difference between failure and success, especially in a market as competitive as Singapore.
Bookkeeping is one of the world’s oldest professions. You can trace its origins to Ancient Egypt and Babylonia, and it has survived for more than 2,000 years for a very simple reason: bookkeepers help businesses keep score. They keep track of revenue and costs, and they can alert you when you’re losing money. This is particularly useful if you are at risk of bankruptcy: a fate that falls most small businesses.
Good bookkeepers can also keep you up to speed with Singapore’s financial reporting standards, on the right side of local tax authorities, and top of tax filing deadlines.
So how do bookkeepers help you track the health of your business? The good ones help you track both your revenues and your costs, highlighting whether your company is profitable or making a loss.
As they keep score for you, you can rely on them to produce for you—and for Singapore’s eagle-eyed tax inspectors—the following key financial statements:
- Profit & Loss Statement (P&L). Also known as an Income Statement, this keeps track of your business’ revenue and expenses on a monthly, quarterly or annual basis.
- Balance Sheet (BS). This is a snapshot of your business’ financial position (read: health) at a particular point in time.
- Cashflow Statement (CS). Arguably the most important of the three, the Cashflow Statement is a record of the cash or cash-like equivalents entering and leaving your accounts. This is critical because even if your P&L shows you’re making a profit, your business can still go bust if you run out of cash. Hence cash & flow!
For a small business, every hire you make is important, but perhaps no position is more pivotal than the internal or external bookkeeper you hire. So be sure to choose carefully. Start by checking their credentials, acc and experience. If you are hiring a bookkeeper to work for your in-house, speak to their previous employers. If you are outsourcing your bookkeeping to a corporate services firm (like Lanturn), be sure to speak to 2-3 of their current clients to get a sense of what you can expect.
Skip these steps and hire the wrong person, and you can expect a negative wave to ripple through your business. Your P&L, BS and CS will be late, inaccurate or both. You will miss tax filing deadlines, and eventually you’ll get hit with penalties; leaving your business with a black mark against its name in the eyes of Singapore’s regulators. Best case? You’ll pay a fine and spend weeks or months ironing out your accounts. Worst case? Well, you’ll be headed out of business.
Get the right bookkeeper for your business, though, and you can devote more of your time to building great products and services, and converting those into the revenue it takes to create a thriving business.
Want to know more about how to get the right bookkeeper for your business? Contact us here if you’d like to know more.