Why It Is Important For SMEs To Maintain Proper Bookkeeping

Why It Is Important For SMEs To Maintain Proper Bookkeeping

Aside from complying to the guidelines of government authorities such as the IRAS and ACRA, bookkeeping is an essential part of any business venture, especially for SMEs. With the help of well-maintained books and records, many much-needed advantages are gained, primarily the quick resolution (or preferably, total avoidance) of potential problems and acquisition of profitable insights.

If you are interested to know more about what proper bookkeeping can do, read on to know 4 key benefits that well-maintained books can bring about for SMEs.

1. Never lose sight of the business’ financial situation

It’s of utmost importance that business owners clearly see their financial standing constantly, from day-to-day operations to annual performance reviews. In doing so, owners can completely see their business’ financial flow, even down to the minutest details and transactions.

This overview allows them to discern key areas of their finances, such as the current state of revenues, an increase or decrease in the client base, and the progress made towards business goals. Without timely and accurate bookkeeping, not only will owners miss out on beneficial insights for improvement, but they will also be at risk of eventually losing control over their business.

2. Optimise cash flow management

Running an SME is never easy. Although various factors can attribute to these businesses’ failure, most of them are tied to the exhaustion of the business finances.

By knowing their financial situation, as mentioned earlier, business owners can foresee, avoid, or rectify potential issues that can detrimentally affect their bbusiness’s cash flow. As such, accurate bookkeeping allows one to become proactive instead of reactive, making it easier to recognise problems well ahead and providing ample time to solve them.

3. Assist in getting approved for business loans

Adequate funding is something that goes hand in hand when starting a business. And even after operations have gained traction, another long-term business loan may still end up being necessary to grow one’s enterprise.

Whether a business owner turns to banks or business loan providers, both entities will include an indispensable requirement in their terms: the company’s latest financial reports. By incorporating a reliable bookkeeping system right from the outset, entrepreneurs will have well-maintained books at the ready for possible future loans. Besides saving themselves the trouble in that regard, possession of these records can also help in other areas, like when it is time to do your taxes.

4. Can be done by outsourcing

In the past, business owners had to spend valuable time to ensure they properly documented all of their financial transactions, both incoming and outgoing, along with other financial aspects of the business, such as the payroll.

But with the advent of reputable accounting services in Singapore, entrepreneurs can now outsource their bookkeeping without any worries. At Ackenting Group, we combine innovation into our accounting services to ensure that you stay on top of your bookkeeping and accounting obligations. No matter your business type, rest assured that our suite of corporate accounting services will effectively meet its needs and free up more time for you to focus on other core operations.

Conclusion

Bookkeeping is an absolute necessity for any business venture. With the help of its output in the form of well-maintained books, an entrepreneur’s life can become much easier, from doing taxes to assessing the growth of their business.

If you require any assistance on accounting services, feel free to drop us an email at johnwoo@ag-singapore.com or contact us at +65-66358767. At Ackenting Group, we offer a complimentary 30 minutes online consultation for us to better understand your business requirements.

div#stuning-header .dfd-stuning-header-bg-container {background-image: url(https://www.ag-singapore.com/wp-content/uploads/pexels-photo-24464-1-2.jpg);background-size: cover;background-position: center center;background-attachment: scroll;background-repeat: no-repeat;}#stuning-header div.page-title-inner {min-height: 550px;}