Setting up business Singapore laws and regulations have allowed follows a lot more tasks. An entrepreneur should be prepared to handle all the financial transactions that the business will be involved in. That is why it is important for you to know accounting for your Singapore company.
But what is accounting? Accounting for your Singapore company involves the process of recording, summarizing, analyzing, interpreting, and reporting financial transactions. These are presented in financial reports, summarizing the business’ operations, financial position, and cash flows.
Basically, accounting helps you know where your company is financially. It is important because you can adjust your business plan accordingly. With this, it is only imperative for entrepreneurs to have the knowledge of the basic accounting principles.
Basic Accounting Principles
When studying about accounting for your Singapore company, you need to know the basic accounting principles and practices. You need to be able to tell for yourself if your company is profitable. Otherwise, you will be having a difficult time gauging the scenario in front of you.
This accounting practice, as the term hints, only records revenues and expenses once the amount related to these transactions are received or paid. It is a strategy usually employed by small businesses because it is easier to track money that way.
It is based on the concept of matching principle. You are recording the receipt or payment of the transaction once it is incurred rather than when the cash is delivered. Big companies are using this because transactions can go as high as millions, which means payments are done in piecemeal fashion.
Revenue Recognition Principle
It applies to the revenue registered to the company’s income statement. Revenues are gross inflow of cash and receivables to a company’s records arising from sale transactions of goods or services to another party.
Full Disclosure Principle
As mentioned, a big part of accounting is reporting of the financial transactions. With this, it is only important that you present all the information regarding your company. Do not even attempt to conceal anything. The business regulators are requiring the companies to have narration of relevant events to their companies’ operations as well.
Accounting for Your Singapore Company
Accounting is vital for the business. If you need help, do not hesitate to reach out to 3E Accounting. We offer a variety of services, including accounting, taxation, and business support. Our team can also teach you how to register company in Singapore. Contact us today.