What Does A Bookkeeper Do?

Bookkeeping is an art of recording and documenting each business transaction in a systematic method, which makes it possible for the user to understand the exact state of any transaction in a quick and efficient way. Though in the beginning looked at as a complex process, bookkeeping is really an uncomplicated task if one uses a systematic method. A professional bookkeeper basically records each and every transaction, no matter its size, and carefully conforms to the local accounting rules.

Singapore Company Incorporation elaborates on what are the roles and responsibilities of a bookkeeper and what it takes to be a highly effective bookkeeper in Singapore.

1. Understands Bookkeeping is not auditing
As per business laws in Singapore, an organization whose revenues hasn’t reached 5 million Singapore Dollars or any that does not have a company shareholder doesn’t need to undergo an audit process. Consequently, this will help us complete the compliance needs set by ACRA (Accounting and Corporate Regulatory Authority) and IRAS (Inland Revenue Authority of Singapore) avoiding unnecessary fees and penalties. A bookkeeper in Singapore must know the applicable rules for categorizing transactions as per the terms given in the SFRS (Singapore Financial Reporting Standards). A bookkeeper remembers it is not analyzing or making management and fiscal reports. He also understands the bookkeeping process also distinctive from filing taxes with all the IRAS or filing total annual reports with the ACRA.

2. Appreciates the difference between accounting profits and taxable profits
It is pretty natural to have different revenue under taxation and accounting. Singapore tax laws permit certain expenditures to be taken for taxation while some others are off-limit. For instance, the business owner makes use of his S-plate personal car to meet up with clients. These are legit business expenses where accounting is involved. However for taxation, S-plate car expenses are banned by IRAS. Thus a good bookkeeper is aware this and values this delicate difference. So when he computes taxable income for the organization it will vary to the degree of this expense. Accounting will document this expense whereas taxation will neglect it.

3. Knows SFRS , IRAS , Singapore Tax Laws, PIC
· In Singapore, information about SFRS is so very important for a bookkeeper. A bookkeeper recognizes whether to implement a straight-line depreciation method or an accelerated depreciation way for a specific statement. He deals with the other items including inventory valuation, real estate valuation and deferred taxes as per the precise provision outlined by the SFRS.

· An SFRS is actually a rather different version of IFRS (International Financial Reporting standards). Hence a bookkeeper feels empowered when he is familiar with SFRS as it enables him to be effective in other areas where IFRS is employed at the same time.

· A Bookkeeper is fully aware of the Singapore tax laws and latest deductions claimable for the organization. Similarly understanding of Inland IRAS regulations is vital to assert tax credit, where pertinent.

· For example, firms in Singapore qualify for the PIC (Productivity and Innovation Credit). An effective bookkeeper would sort out and demarcate the things, from which he’ll claim PIC, under the PIC Fixed Assets.

4. Aware of real-time accounting
Singapore is definitely a tech-savvy location and with the creation of cloud-based accounting software package, numerous SMEs are re-discovering a real-time accounting regimen. Ultimately, an efficient bookkeeper uses the most recent accounting software based on cloud-computing that have made it feasible to record transactions in real-time. This real-time bookkeeping enables a company to better handle its finances and production.

5. Records everything
Finance managers end up finding it hard to reason out the differences between actual and the recorded expenses. This then turns into a nightmare for the bookkeeper. Thus, it gets imperative for a bookkeeper to adhere to a systematic approach through the entire bookkeeping process. Sometimes, it may not be feasible for a bookkeeper to record a financial transaction in a comprehensive manner. However, he has to take maximum efforts to keep up the records in close compliance with SFRS. Following this method diligently assists a bookkeeper to come up with genuine accounting and management records whenever required.

6. Knows where to place every item in the books
A bookkeeper is aware of the exact know-how in connection with treating profits in the books of accounts as described by the SFRS and IRAS. Usually the same items from fiscal reports are addressed differently for various purposes. For example, a marketing manager can handle profits in a different way for accounting and taxation reasons. An enterprise owner can claim expenses accrued on his car as accounting expenses, which, nevertheless, is not permitted to show up on the tax statement. Thus, a prerequisite for a bookkeeper is to understand where to place which item in the accounting books.

7. Understands payables and receivables accurately
Large business firms need to go through a strict auditing process to make sure ethics and compliance. On the other hand, smaller firms have the overall flexibility to sidestep the auditing process, which may be leveraged to take care of accuracy while preparing fiscal reports. Thus, bookkeepers need to ensure that all bank statements are in conjunction with the business transactions got into in the accounting software monthly. If there’s any disparity, an all-inclusive bank reconciliation statement needs to be produced to give a concept of the cash and the bank balances. Similarly, sales invoices must be inspected thoroughly contrary to the software records. Profits record deficient a sales invoice must be properly treated as account receivable. In the same way an unpaid bill or one to be paid later on should be addressed as account payable.

Conclusion
Compared to an accountant and tax agent, it is the bookkeepers who do the majority of the work. They are accountable for creating the general ledger which is the foundation of the company’s management accounts. Therefore, bookkeepers must be fast, precise and knowledgeable. They should be ingenious because they ought to quickly find the origin of unidentified transactions. Expertise in GAAP (generally accepted accounting principles) means they could deal with the large choice of potential transactions. To execute these calculations well requires practical experience and expertise in Singapore Government policy. As a thumb rule, it is better to employ a bookkeeper having a minimum of 10 years experience in bookkeeping for Singapore registered companies.