Small and medium-sized enterprises SMEs often face challenges that leave them out in utilizing innovations and technologies or expertise. Cash flow is considered the lifeblood of businesses – small or large. For small businesses, cash flow is essential considering that these entities face issues with cash. Managing their cash flow can help them stay on track and survive difficult times. It can also help them grow faster and meet their goals. Many small and medium-sized businesses tend to overlook the monitoring of their cash flow. As business owners are occupied with their daily operations, they have no time to see how the cash flow is going on. It is estimated that more than 80 percent of business entities fail in the first one and a half years – one of the contributing factors is poor financial management. It is crucial that SMEs seek the help of accounting firms Singapore, and here is why?
Have Accounting Done to SAS
When it comes to accounting, it’s not just about you as the business owner understanding the ins and outs of your business finances – there are many things involved. Even when you use accounting software, it will merely do away with credits and debts. As a business owner, you will need to account correctly and smartly and understand the different kinds of income including dividend incomes, operating revenue, or gains and losses that your business incurs from assets that have been written off and foreign exchanges. You also want to inventorize or expense off receipts from purchases.
Accounting experts have over the years found that many enterprises did not track and account for things such as out-of-pocket expenses, depreciation, and home office space. Seeking an accounting firm helps you deal with some of the challenges that you face when it comes to managing your cash flows.
Some of the finance items that you overlook can, in the long run, impact your business negatively. An accounting firm will ensure that your accounting is done per the Singapore Accounting Standards (SAS).
Prevent Huge Fines and Penalties
SMEs are required to file their returns and meet the regulatory and compliance requirements in Singapore. However, because the SME owners are occupied with many tasks, they may not be able to manage issues regarding compliance and regulations. A business owner may not keep on top of the business paperwork, something that makes it seem next to impossible to ensure the proper keeping of records, tax filing, and other things. This, in turn, leads to fines and penalties. When you engage with an accountant, it makes sense because you free yourself from the demanding task of having to go through the paperwork.
Don’t have to worry about due dates for tax filing and submissions, you don’t have to be familiar with the new legislation and its requirement. The accounting firm is always on the knowhow of new legislations, and how they impact your business and they will explain that to you. They will also take care of any issues that could put you into trouble with the new legislation.
Professional Business Advisory
An accounting firm isn’t just there to handle tax filing. There are many other things it does. The company takes a thorough assessment of your business finances to identify the strengths and weaknesses. From the evaluation, the accounting services firm creates a forecast for a specific period- say, a year or five years. This helps keep the business running in a financially healthy state. The firm can help identify financial pitfalls and unsustainable financial practices in your business and advise you on the way forward. It can help you make strategic decisions regarding your finances. This way, you ensure that your business expands its profitability while scaling down on the costs.
The company can help determine when it’s the right time for your business to borrow and what kind of financial products or loan products it should look for.
In brief, your business needs to emphasize on financial management. It needs to look deeper into its financial practices so that it remains operational. However, since many small and medium-sized business owners don’t have the time to manage and check their finances properly, they are often caught off guard with financial problems. Accounting firms can put things in order and streamline the accounting processes while also offering other services like advisory services. They also deal with investors, banks, government agencies, and other stakeholders. The accounting firms can help you when you want to seek capital investment, take a bank loan, or apply for a government grant.