While you could be running a great business either online or through the brick and mortar route, you need to find out whether you are able to manage your business correctly from the financial and commercial points of view. At the end of the day, you are into business to make money and earn some profits. As an entrepreneur in Singapore, big or small, you must be dead sure that your finances are being managed properly. This is easier said than done and it requires some bit of planning and understanding the basic of accounting.
While many entrepreneurs spend a lot of time on marketing and sales, they may not be actually in the know as to what exactly is happening as far their actual financial performance is concerned. This is where the role of professionals in accounts matters. As an entrepreneur, you also should also understand the importance and significance of managing the books of accounts of the company on a daily basis. We are listing down a few important reasons as to why it is extremely important to manage the accounting related tasks of a company as perfectly as possible:
It Helps To Know The Finances
Whether you are running a small enterprise or a big one, either online or in a brick and mortar environment, you must, as the owner of the enterprise be fully aware of the finances of the company. You may be able to do it on your own when the business is small. But as it grows in size in terms of number of customers and turnover, then you need to have a good accounting system in place. This will help you to have a clear and perfect idea about the sales, the margins after providing for all expenses, depreciation, taxes and much more. When this information is available on a daily basis, you will be able to take the right decision for giving a new direction to the sales and marketing activities and also for taking corrective steps as and when required.
You Will Be On The Right Side Of The Law
It does not matter if the size of your business is big or small. What matters is the fact that when you run an enterprise, big or small, there are some statutory requirements that you must keep in mind. Here are a few things that could be mandated under the law if you are running a business:
The company you run might be required to pay taxes apart from individual taxes. This will be possible only when you have your accounts and financial statements up to date.
You would be required to give details of salaries that you have paid to your employees and also the various other statutory benefits that are due to them. This again is possible only when you have the best of accounting processes and procedures in place.
There are some laws that require your company to file regular accounting returns and statements. Working them out in the last moment would be simply impossible and this is where having the right books of accounts help.
You could be eligible for some benefits from the government if you are running certain types of businesses. To receive such benefits, you must ensure that you have your books of accounts up to date with the areas of benefits clearly defined and measurable.
You Have Better Control Over Payables
Any business involves buying products and services from vendors. This could be in the form of raw materials, semi-finished products, or even services. Only when you have a good accounting system in place, you will be able to have full control about your payable, with details of each vendors and the payment due clearly available at the click of a button.
You Can Manage Receivables Better
As a business enterprise, you may need to sell good and service on credit. You will be able to manage your receivables better only when you have the right accounting system in place. You will be able to take corrective action if you find that the receivables are crossing the threshold of prudent business. You will also be able to age the receivables and take necessary action if you find that some receivables are quite old.
The Final Word
To sum up, there is no denying the fact that having the best of accounting practices is not all about being on the right side of the law. It is about running your business successfully and ensuring that your marketing and sales activities and efforts yield the right results.