Accounting is an integral part of any business regardless of size and the number of transactions per year. Whether your business is halfway across the world in Dubai or Singapore, your business will surely need to prepare accounting records such as annual accounts as long as the business remains active (unless exempted). However, you may wonder, “Does a small business need an accountant?”.
It is highly recommended that you acquire a qualified accountant to handle your accounting matters. Still, if hiring another employee solely to handle the accounting for a small business seems excessive, there is an alternative. One can opt to engage an outsourced accounting service. Several companies, such as Atriox, provide outsourced accounting services for small businesses in Singapore regardless of the number of transactions - even if your business only performs ten transactions per year.
Benefits of outsourcing accounting services for small businesses in Singapore
Perhaps you may be sceptical about the reliability of outsourcing your accounting matters or even question the pros and cons of outsourcing compared to the traditional method of having everything done in-house. Those are valid concerns, but allow us to walk you through the benefits of outsourcing accounting services for small businesses or big corporations in Singapore.
1. More Efficient & Cost-Effective
Outsourcing your accounting matters helps free up the time you typically spend on tedious routine work so you can truly focus on growing your business. Not only can it be more efficient and cost-effective than building an in-house accounting department, but outsourcing also eliminates the need to manage salaries, CPF, staffing issues such as staff turnovers, accounting software issues, and renovations that may be eventually necessary to accommodate a team expansion.
It is important for SMEs to fully utilise their manpower and resources to maximize returns. Reducing the non-income generating cost by outsourcing accounting services will allow your business to allocate more budget in investing in income generating business activities.
2. Reliability, Accuracy & Credibility
Outsourcing is also a reliable method, given that you hire a qualified, professional outsourcing company like ours (Atriox). A trustworthy and quality outsourcing company will ensure that your business account will have credible and accurate records for bankers, investors, and taxes to ensure deadlines are always met.
3. Assurance of Compliance
Your accounts will be managed mainly by a team of experienced and qualified Chartered Accountants, and most of all, you get the assurance of compliance. A professional will ensure that your business accounts comply with the Singapore Companies Act and Income Tax Act. Here at Atriox, all our professionals are experienced and certified Chartered.
Accounting Services Needed For Small Businesses Singapore
There is a prevalent misunderstanding that outsourcing accounting services should only be utilised by bigger companies, as it is commonly believed that smaller companies or businesses do not have as much workload. However, that is not the case, as small businesses benefit from outsourcing accounting services as much as big companies. The opposite may well be true, as outsourcing accounting services can benefit smaller companies even more than big companies.
Aside from the issue of staffing and accommodating more employees, smaller business companies can make the most of the wide range of accounting services available in the Singaporean market.
Some of the accounting services that are highly recommended for small businesses include:
1. Monthly Accounting and Bookkeeping Services
Accounting and bookkeeping services typically consist of general ledger maintenance, accounts payable ledger maintenance, accounts receivable maintenance, bank reconciliation and fixed assets ledger maintenance. Monthly accounts bookkeeping is crucial as it helps businesses keep track of their bills, payments and cash flow.
2. Cash Flow Forecasting
Another highly recommended accounting service for small businesses is cash flow forecasting. Understanding the cash flow of your business directly affects the survivability of the business. Hence getting insights into your business's cash flow from a trained professional is a wise move.
3. Management Reporting
The management reporting accounting service consists of a balance sheet, profit and loss, and a trial balance. The service measures the business' current performance, and further adjustments in operations and recommendations for future actions can be taken based on the performance report.
4. Financial Analysis & Growth Monitoring
On the other hand, financial analysis and growth monitoring cover the review of financial statements on a monthly, quarterly and yearly basis, directly impacting the small business's budgeting and financial strategy development.
5. Payroll Services
Outsourcing your payroll will free you from the hassle of filing your employees' earnings, paying levies for local/foreign employees and making CPF contributions while still meeting the government's deadlines per the Employment Act.
6. Corporate Tax filing
Another recommended service is tax filing. An outsourcing company will help your business comply with Singapore's tax regulations by managing all your corporate tax filing and tax advisory matters, planning, financial accounting, compliance and regulation matters.
7. Goods and Services Tax (GST) Services
Some outsourcing companies may even assist business owners with applying, preparing, and submitting Goods and Services Tax (GST) for small businesses that have voluntarily registered for GST for business reasons.
Cost of outsourcing accounting services in Singapore
While it is evident that outsourcing your accounting is a great idea for efficiency and cost-effectiveness, is outsourcing worth it for a small business in Singapore? The price range of accounting services in Singapore varies from company to company. While it may seem like outsourcing is more expensive as the charges are paid upfront, in the long run, hiring in-house accounting staff is more expensive due to underlying costs.
Like any other service, outsourced accounting services have a wide price range. The prices depend on several factors, including, but not limited to, the type of service, duration of the agreement, and the number of business transactions. For example, Atriox offers accounting services starting at $250 for companies with under 50 transactions.
While hiring a cheap accounting service provider may be tempting, we strongly advise you against doing so, as you may not be guaranteed the same results. In worst-case scenarios, a slip-up by the accounting firm may damage your business permanently.
Common mistakes people make when outsourcing
Entering into an agreement with an outsourcing company is an investment. Hence it's important to know if the service provider you have chosen is the right fit for you and your business. Some of the biggest mistakes businesses make when outsourcing include the following:
1. Choosing a firm that does not align with your company’s values.
Before you begin looking for your ideal outsourced service provider, you should consider if your business values align with the service provider. If your values differ, this may eventually lead to a conflict as both parties will be working towards a different end goal and resulting in stressful interactions - definitely not something you'd look forward to for a service that is supposed to make the accounting process easier for you.
2. Choosing someone who doesn’t understand your business.
Next, find out if your service provider understands your business. Once you have confirmed that they have your desired results in mind, research what you want and expect from your service provider. It's important to figure out the groundwork to fully utilise your resources.
3. Hire cheap freelance bookkeepers or accountants
Outsourcing accounting services is the recommended option, mainly due to the lower cost benefits. However, hiring a freelancer to handle your account is not advisable, even if the rate is cheaper. That is because freelancers can only take up to a limited amount of work and often cannot offer complete accounting services due to their lack of experience and skills in full-set accounting. Also, having multiple parties handling your account is not advisable because it will be hard to manage and lower efficiency. Hence, hiring a reputable and experienced accounting outsourcing team is highly recommended. Avoid getting tricked by cheap accounting services offered by freelancers.
4. Choosing an individual or outsourced company you struggle to communicate with due to language or culture barriers.
Lastly, consider if you can communicate properly with your service provider. Language and culture compatibility play a more significant role than you might think. Failure to ensure proper communication can lead to friction and misinformation that might be detrimental to the business.
Given the common concerns of big and small businesses in Singapore, we strongly recommend you consider engaging an outsourced accounting service, no matter the size of your business. The benefits of outsourcing accounting services for small businesses in Singapore and getting an expert to handle your business account matter far outweigh the price, especially since their expertise can help ensure your business stays on the right side of Singapore's laws.
Nothing short of excellence will do when it comes to something as important as your business, so carefully consider all your options before hiring your preferred outsourced accounting service to ensure your business finances are in order and hassle-free.
Atriox's Accounting Services for SME Business Owners
If you're in doubt or unsure where to look, Atriox is more than ready to support you with all your outsourced accounting needs. Our trustworthy team consists of individuals who are Chartered Accountants of Singapore with a good understanding of companies in various industries.
At Atriox, as a professional and experienced accounting services provider, you can be assured that we will go the extra mile to understand your business fully, provide adequate advisory, and even add value wherever possible, such as by providing recommendations to address lapses in internal processes. In addition, Atriox is the one-stop corporate services provider, as we offer a wide range of corporate services for SMEs and start-ups, including accounting, bookkeeping, GST, tax, payroll and others.
Your One-Stop Holistic Business Services Provider
Mobile/Whatsapp: +65 8944 3991 / 8857 5256