Record keeping in accounting is a process you cannot ignore when you form a new company, but what is the most efficient way to approach this? Our partner, Navisteps has some advice for new companies. Read on to find out more.
What is Record Keeping?
When you record transactions or events in an accounting system, you are record keeping. To ensure good accounting practice in your company, you rely on accurate and thorough records. Therefore, good record keeping forms a solid foundation of good accounting in your company.
Reasons to Maintain Good Record Keeping
Prevent fraud or theft
Keeping detailed records of your business expenses and transactions will help you to prevent fraud as you have a better understanding of your cash flow. This will help you to produce accurate financial statements when audit season comes around.
Pay your taxes
On top of having accurate financial records, it’s easier for your accountants to advice on how you can legally reduce your taxes. Having neat records also makes it easier for your accountants and auditors to find information, helping them to finish their work faster. When you can submit your tax returns on time, you’ll save on penalties too.
Comply with laws
Having a consistent record-keeping practice is not just good for your company’s operations but it is often a legal requirement in many jurisdictions across the world. Countries like Singapore and Hong Kong employ the services of corporate secretaries to ensure that companies are compliant with each countries’ regulations. Knowing where important documents are would help them in their job too.
For more reasons why it's important to maintain good record keeping, do read the full article on our partner’s page.
How to Maintain Good Record Keeping Habits in Your Company
Now that we have understood the importance of record keeping, how can startups and SMEs instill a smooth and compliant record keeping system?
Keep Records Organised
Create a system that works for you and your company with instructions that are foolproof so that everyone is on the same page as to how to file company records. As an example, expenses can be labelled when submitted so that the total expenses across the entire company can be consolidated and filed in their proper categories.
Start Using a Digitalised System
Using a digital system would free up a lot of time and money for your employees. You can then focus on more value-adding business tasks that would create a higher rate of growth in your company instead of chasing a trail of paperwork. Including tools like Osome and Navisteps would be a great first step.
Acknowledge You Can’t Do It Alone and Ask for Help
A lot of entrepreneurs have the tendency to want to do everything on their own and not trust anyone else with work. However, as a business owner, your main task is to grow your business. Prioritise your energy on higher value work while leaving administrative work to other experts. A corporate service company like Osome can be your round-the-clock accounting and corporate secretary assistant, getting work done professionally at a cost that is affordable.
For new company owners, you can get things done right from the start with these tips from Osome and Navisteps. Although getting a good system up from the start can be time-consuming, we promise it will be worth it in the long run.
About our Partner
Navisteps is a digital expense management solution tailor-made for businesses to control, track and manage spend efficiently. They take care of your pre-accounting processes so you can focus on your business.