On the surface, many people believe owning and running a business is all about glamour and fanfare. However, as a business owner, you’re tasked with the day-to-day operations of the business, as well as its other chores like accounting obligations. In all honesty, all of these can prove overwhelming for a small business owner.
There’s no doubting your commitment to seeing your business succeed. However, it’s only a matter of time before all of these activities begin to take a toll on your business’s health. But, like countless other business owners who are smart enough to admit it, outsourcing provides an alternative and is a solution that doesn’t make you weak or overly dependent.
Rather than take on all these tasks all by yourself, there are some tasks, especially accounting and taxation tasks, you can confidently leave to the professionals to handle. There are multiple benefits of outsourcing your accounting taxation functions. This post highlights and discusses some of the accounting and taxation services you should outsource and what you stand to gain by outsourcing them.
Accounting & Taxation Services That SMEs Should Outsource
Bookkeeping
Bookkeeping is the bedrock of all accounting activities of any business. It records all financial transactions in and out of business. Bookkeeping reflects the financial health of your business by letting you know when your business is making profits or running into bankruptcy.
Bookkeeping is not an accounting task that should be left to the mediocre or be handled with laxity. If ever you’re considering outsourcing any service for your business, bookkeeping should be at the top of the list. It’s always best to get accounting professionals to help organise the business’ financial records.
AR/AP Management
These stand for Accounts Receivable and Accounts Payable. They are among the most important accounting records for any business. Your business Accounts Payable ledger will showcase all of your business obligations to creditors. Simply put, when you buy items from suppliers on credit, you’ll need to pay them back at a later date. This outstanding amount would be registered in the Accounts Payable ledger.
On the other hand, when customers buy items from your business and promise to pay on a later date, the amount owed to your business would be inputted into the Accounts Receivable. While this seems like easy account management, you have to ensure proper monitoring to ensure both you and your customers will not default on payment.
You’ll need professionals to help you keep proper records to avoid mistakes and missing payment deadlines. This is where outsourcing comes to the rescue. While you focus on the business’s day-to-day operations, AR/AP outsourcing services help you handle this accounting aspect.
Cash Flow Forecasting
Cash flow is another important accounting service you should consider outsourcing to professionals. Cash flow records the movement of cash in and out of your business. By knowing the volume of cash that comes into your business in a particular financial year, it’s easy to forecast the direction of the business in the coming years.
Cash flow forecasting goes beyond wishful thinking. It is a strategic calculation of future incomes and expenses. There are several accounting tools that can help in cash flow forecasting, but a technical understanding of the tools is necessary before one can make use of them. There are a lot of things you need to do to ensure your cash flow is in check. It would help if you didn’t have to bother yourself with the accuracy of a forecast, all the more when accounting professionals trained to handle such tasks are available. Many SMEs choose to outsource their cash flow forecasting to benefit from professional guidance and direction going into their next financial year.
Tax Computation and Filing
Tax computation and filing is an important duty every business is expected to carry out. Under the Singapore Companies Act, businesses are required to file their taxes for each financial year. While there are penalties put in place to discourage late tax filings, it’s also important that you compute your taxes accurately to avoid overpaying or under-declaring profits.
The process can be overwhelming to accomplish unless you’re knowledgeable about taxes. To ensure you file your taxes correctly, you’re better off working with tax professionals. Even for many SMEs that choose to carry out other accounting services by themselves, tax computation and filing is one aspect that’s commonly outsourced.
Payroll Processing
An important part of running a business is paying your employees’ salary and on time. Depending on the salary payment schedule you draw up (weekly, biweekly, or monthly), it’s best to automate the process to take the burden off your shoulders. This means paying your employee’s salaries without having to initiate each payment manually.
There are lots of payroll processing software that have been designed to make the process easy and smooth. By outsourcing payroll processing, you’re guaranteed that the right salaries are paid on time. In addition, using these outsourced, automated services eliminates the risks of making mistakes that can ultimately affect your tax returns. As a small business, the last thing you want on your plate is to attract tax penalties.
Operational Support
The skeletal work of any business is in its operational structure. This includes the day-to-day operations and also financial decisions taken daily. More often than not, small businesses leave out operational support when outsourcing services. Yet, more than ever, operational support can help reposition and change the financial trajectory of the business.
All operational activities, whether daily or not, are the pieces of the puzzle that, when put together, help make the business picture look clearer. Outsourcing operational support helps the relevant professionals gain new perspectives on how the business can function better. In addition, engaging the services of these companies helps you evaluate your current financial activities to know where improvements are needed.
Statutory Compliance
Regardless of their scale, businesses are governed by a business or corporate laws. Your business is mandated to obey and comply with all of these laws or face fines and other penalties. As a small business owner, keeping track of some of these laws and policies can be hard. However, corporate secretary service providers ensure your business continues to fulfil its legal obligations.
The last thing you want is to attract fines and other financial penalties that would increase the business’ expenses or put it at risk of being shut down. The best way to ensure you stay on the right side of the law is by hiring services that can help ensure you remain statutorily compliant.
Conclusion
To stay successful in business, business owners must ensure good operational and accounting services. However, it can be daunting to keep track of everything needed to ensure your business stays profitable while obeying the country’s laws at the same time. To assure you’re in control of your business, you may need to outsource some accounting and taxation services to professional financial experts. As a small business, getting support from trusted services with qualified professionals is advisable, as doing so will allow you to truly take charge of your business.
