The Importance of Bookkeeping in Running a Business

Bookkeeping refers to the process of recording, classifying and summarizing of financial transaction of a company or individual so as to enable them to take financial decisions. Bookkeeping helps to calculate the profit/loss of a company for a given financial period.

It provides a basis for preparing the financial reports for identifying the financial strength of an organization. It is the practice of keeping track of every receipts and payment of a company or an individual.

Bookkeeping involves the following Financial Transaction:

  • Recording revenues from sales
  • Fixing the price of products sold and services provided to customers
  • Verifying and keeping track of the invoices from suppliers
  • Managing the employees’ payroll
  • Recording of depreciation, etc.

 Cheap accounting in Singapore performs the following Bookkeeping function:

  • Systematic Record keeping of the financial transaction
  • Classifying of the financial transaction into – personal, real and nominal account
  • Preparing various financial statement
  • Providing monetary information to the interested parties
  • Ensure that the company complies with the legal requirements

Cheap accounting in Singapore provides the following benefit of Bookkeeping:

1. Preparing Budget

With the help of bookkeeping, it becomes easier to decide upon a budget for future spending as accounting helps to keep track of the revenue and expenses of a company.

2. Tax Planning

Bookkeeping helps to organize various receipts an invoices of a company efficiently thus making it easier for filling of tax return

3. Analyses

Bookkeeping involves the preparation of various financial statement which helps the manager to analyze the financial strength and performance of an organization. Through Bookkeeping the management can keep track of the cash inflows and outflows. It helps to business to identify the which business line to peruse or not

4. Investors Report

By analyzing a various financial statement, investors can determine the value of an investment. It enables them to verify whether their money is appropriately utilized to generate dividends.

5. Financial Management

Financial management refers to the task of planning and executing financial activities such as the procurement and the utilization of funds. Bookkeeping contributes to efficient financial management by providing the Chief Financial Officer with financial clarity and visibility into the financial results. The CFO will be able to trace reasons for the company’s profit or loss and take a decision on how to improve the firm’s financial performance.

Every day entrepreneurs have to take business decisions to sustain and grow their businesses. Therefore, they may not have time to prepare their financial statements, keep track of the taxes, processing employee’s payroll and prepare financial reports. Therefore there are firms that provide cheap accounting in Singapore to meet the requirements of the businessman.

Avatar

admin Author

Leave a Reply

Your email address will not be published. Required fields are marked *