Record keeping and number crunching are probably not the reasons why you started your business. Perhaps your motivation comes from the passion for the product or service your business is offering. Nevertheless, you can’t escape the fact that accounting is very important to your business. If you don’t like the idea of doing it yourself, then you can hire a firm offering Bookkeeping Services Singapore.
You can’t survive if don’t know a thing about accounting though. Here are some tips that will help you get through the whole accounting thing.
Track your expense
There are two things to do to improve profitability, one is to score more income, and the other is to reduce expenses. Both things are important. Unfortunately, a lot of owners overlook the significance of the second one. If they know that income is coming continuously, they tend to spend more and more. It’s only at the end that they had already incurred more expenses than the amount of income they had generated.
If you have a bookkeeper, you can ask him to periodically give you a summary of expenses. In this way, you can easily monitory your business’ outflows. Create a budget of expenses. If you are already going over the limit, then it’s about time to slow down the spending. And one more thing, don’t use your business funds for your personal needs! It will ruin everything.
Plan for Major Outflows
If small expenses can hurt your business, how much more the big ones? Plan your big cash outflows. These do not just include expenses but also all transactions that involve a big disposition of cash. Some examples are purchase of machinery, business expansion or upgrade of the existing IT infrastructure.
Even if the outflow is an investment, it is still not a reason for you to dispose cash whenever you want it. It might hamper the operations of your business.
What you can do is to save cash every accounting period until such time you can already finance the big ticket transaction. If you need it urgently, then you can add some inflows to your business through loans from banks. Just be mindful of the interest. If you’re having problems with planning, then hire some professionals offering accounting services Singapore that are also specialists when it comes to financial budgeting.
Set aside money for taxes
The worst you can have as an entrepreneur is to have a tax feud with the government! Always be sure that you have enough cash to pay off taxes that are due or will soon be due.