Introduction –
Many people are there, who think that accounting and bookkeeping services are one and the same. But let’s get straight about it. In Singapore, accounting and bookkeeping services are two different things. So, if you are a business owner, then it is very important for you to know the difference between the two. This will help you to understand the main points of difference between the two and the role played by them in helping you grow your enterprise. The main difference between accounting and bookkeeping services, can be called in simple words as the difference between a doctor and a nurse. Both of them are working for one purpose, but sometimes their work gets overlapped and each have their own responsibility. In this guide, we also look at singapore bookkeeping sme and read more to broaden your horizons on the subject.
Recording Fiscal Data –
In simple words, the work of bookkeeping services is to record or note down the business’s financial data (information). And, the work of accounting is to analyse it and give it a meaning or make sense of it. A bookkeeper is liable for noting down the part of accounting process, while the complete accounting process is the liability of an accountant. Now, we will take a deeper look into what is bookkeeping and what is accounting and what does both the process work in an SME in Singapore.
Recording and Filing are a Part of Bookkeeping –
One of the most pivotal things that you should know is that bookkeeping services is a kind of an administrative task which concentrates on recording a business transaction. Now, these transactions are required to be recorded and compiled in a consistent and orderly manner. Also, a bookkeeper is liable for making invoices, making the payroll, reconciling the credit cards, posting credits and debits. Plus, one more work that a bookkeeper has to do is to manage the business’s past accounts, ledgers, subsidiaries, in which the sales and expenses are recorded along with other supporting documents. A bookkeeper is also liable for paying the suppliers, updating the inventories, filing up or making customers cash receipts, and managing small cash. For becoming a bookkeeper, one needs to do accounting courses and learn the basics of accounting.
Accounting and Bookkeeping Are Important for the Growth of Business –
Now, accounting and bookkeeping are some such work, which starts to overlap, especially, when this work becomes digital. There are several bookkeeping programs that are capable of developing financial reports, just an example, while some accountants also note the fiscal transactions of the companies they are working for. Due to this kind of overlap in the work, many industry people have observed and think that soon bookkeeping will become a thing of the past as many of the bookkeeping task has become automated already. However, you can also see accounting and bookkeeping as a symbiotic relationship. The bookkeeper is always dependent on the accountants to create a general ledger or to find out which financial information needs to be recorded. And, in turn the accountant is dependent on the bookkeeper to provide the information for analysis. Due to such a relationship, many big companies have both accountants and bookkeepers in their office.
Accounting & Bookkeeping for SMEs –
Small business is there who cannot hire a full-time accountant permanently. So, they appoint a bookkeeper and they consult an accountant on a (when necessary or needed) basis, especially during the tax filing time. Then, the medium sized or big business have a one full-time accountant who sees many bookkeepers. Also, it is important that a bookkeeper in the local SME in Singapore, should be well versed with the Singapore Tax Laws and also the provisions of Singapore Financial Reporting Standards (SFRS). These provisions have an impact on accounting and tax statements as well as the real estate valuation and inventory among many.
Recording as Per SFRS & IRAS –
All and any financial transactions should be recorded as per the SFRS to avoid any kind of mistakes, mismatches between the recorded and the real expenses later on. It is because the tax statement is there, bookkeepers also need to know the needs of the IRAS i.e., Inland Revenue Authority of Singapore. Though, making a fiscal report is the domain of the accountant, bookkeepers should also be familiar with Singapore’s Auditing Procedures.
It is possible for small businesses to bypass the auditing needs of the large companies; their bookkeeper still requires to make sure that recorded transactions match the business bank statement. And, also due to many businesses who are making a change to cloud accounting, bookkeepers should learn how to use digital platforms as they also have to check whether the sales invoices are similar to what has been digitally recorded.
