No small can blind the eye, that’s accounting. Even the smallest difference can make a big difference in your financial statements. Ignoring a single incorrect entry will not solve the problem; rather, it will just worsen everything as it will pile up with other mistakes. At the end, you’ll find yourself starting right from the start again! You wouldn’t like a mess like that.
Error correction might be a difficult one. If you or your accountant can’t handle the problems, you may seek help from some accounting services Singapore. Even if you already realized you can’t solve it, you still must not stop from finding solutions. Let me give an example.
There is an entry for a sale which your accountant recorded as accounts payable amounting to $150 instead of $75 dollars. He should have made a correcting entry. But due to fear of being apprehended by the boss, he kept it to himself. Come payment time, the check prepared by the cashiering was only for $75, the amount recorded as accounts payable… and they all thought it was over.
After some months, a billing statement for $125 came to the company. It involves a principal amount of $75 and the rest are interest and late payment charges. In other words, ignoring to create a correcting entry has cost the company $50, and what’s more, it cost them their reputation to the vendor!
Let’s have a different example. Suppose an accountant, unintentionally, overstated the expenses related to depreciation. The result was a significantly lower taxable income. No correcting entries was made due to fear of being apprehended, at the same time, the error cannot be detected by the owners anyways. The company paid the tax due… and they all thought it was over.
The next month, the business received a notice from the tax bureau, citing a possible tax evasion on their part. Apparently, it was due to the uncorrected entry stated above. In this scenario, the cost to the company will be the penalty to be imposed by the tax bureau plus a bad image record!
So, why not just buy an accounting software, rather than hire an actual accountant? Well, it doesn’t matter, either choice makes mistakes. Accounting software might even give business owners more headaches, because problems they might cause are technical ones, and solving such will involve the need for IT technicians. Now that’s double the costs!
The better solution would be to hire a trustworthy and competent accountant. Accounting firms in Singapore are aware of this, that’s why they constantly give their accountants lots of trainings. Perhaps this could be the reason why accounting services in Singapore are among the best. So, next time you got an accounting problem, solve it at once!