The first few months of a business is a crucial time to install the proper accounting practices. From getting the necessary financing to controlling expenses, maintaining organization, improving productivity, and identifying potential areas of concern, the right accounting practices makes all the difference.
For your business, this means either purchasing accounting software or hiring an accountant or accounting firm with a strong knowledge of how to do bookkeeping for startups. Whichever course of action you choose, the result should be an efficient, accurate bookkeeping system that augments your business.
If you are in SG, looking for bookkeeping services in Singapore that seamlessly manage your financial records. At the same time, you focus on growing your business, Relin Consultants got you covered with our reliable and expert solutions.
Why Focus on Bookkeeping and Accounting?
With the myriad of responsibilities needed when starting up a new business, it may seem at first that accounting should not be a top priority. However, there are good reasons why proper accounting should be at the top of your list.
One solid reason is the accurate tracking of receivables from the goods and services your company provides. But there are others as well which include but are not limited to the following.
- Instant Identification: Know where your business stands financially
- Planning: You can see where your business is heading and make the right changes
- Research the Past: Learn from what your business has done and make corrections
In addition, you can use your accurate accounting when communicating with financial organizations such as banks, investors, and lenders. Plus, it helps when dealing with the IRS. You can also use the information gathered from your accounting to compare with the competition. This will let you see where your business stands and what it needs to do to succeed.
Establishing Proper Accounting Practices
Everything starts with how you are going to address the financial records generated by your business. Are you going to do it yourself or hire an outside accountant or firm? There are advantages to both, but whichever method you choose needs to be properly fulfilled to ensure accuracy.
- Structure Bookkeeping: You need to choose a structure that allows for easy access to the information being recorded. The money that you receive and spend should be simple to monitor and accessible when you need it. Otherwise, misunderstandings can take place which lead to poor decisions.
- Oversee Transactions: This is the posting of all sales and expenses, so you can easily see what is happening in your business daily. The more open you are with your transactions, the easier it will be to spot potential errors and make improvements to the process,
- Keep Written Accounts: Beyond the numbers, you should include notes that provides additional information for all applicable transactions. A simple journal entry can explain so much when trying to figure out why an expense was made.
- Lining Up Bank Statements: The accounting records you keep should match your bank statements. If they do not match, you can discover the reason why and make the necessary adjustments. If you do not line up the statements with your account, then it may lead to even worse accounting issues over time.
There are many aspects to startups that require accurate accounting practices. From spotting potential errors to reducing costs, the more you can focus on proper accounting, the better position your business will be in to succeed.