Singapore
  • Hong Kong
  • UK
  1. Osome Blog Singapore
  2. 7 Steps To Keep Invoices Organised for Small Business Accounting

7 Steps To Keep Invoices Organised for Small Business Accounting

Managing business finances might be challenging, but it doesn’t always have to be an intimidating task. As a business owner, you should understand the basic accounting principles and thankfully, they are relatively easy to grasp.

The key to keeping your small business accounting and finances in order is to start with a feasible plan with a budget, track your transactions accurately, review your progress frequently and always maintain good records.

Ahead, we outline the 7 important steps that will keep you in sync with the state of your business and have your business finances organised.

1. Open a Business Account

The first logical step to manage your company's finances would be to open a business account so you can legally receive your payments, pay bills, and keep track of the bank statements that are important in your company’s annual financial reports.

While there are many advantages of separating your personal and business finances, the two main reasons you should keep them independent are for personal protection and tax purposes. Additionally, keeping track of your business expenses for tax calculation is also much easier when you have a separate business account.

Elizabeth is a first-time business owner. Despite advice from other businessmen, she did not see the need to separate her business and personal finances. When it was time to file the Estimated Chargeable Income (ECI) form with the Inland Revenue Authority of Singapore (IRAS), Elizabeth was caught unprepared as she had to spend a large amount of time determining her business finances. Since her finances are combined, it also resulted in IRAS auditing both her personal records and business records.

To start your corporate bank account, choose a reliable bank such as OCBC. When you open a company with us, we can help you open your corporate bank account on the same day with our partner, Aspire. Aspire allows you to open an account 100% online, and within 5 minutes so you can move on and focus on other tasks at hand.

2. Keep Track of Expenses

This seemingly menial step is often easily overlooked in the day-to-day business management, but accurate upkeeping of expenses lays the foundation of managing an efficient, organised business. Instead of leaving your receipts and invoices untouched in a drawer, make use of online software that allows you to track your daily expenses in real time.

If you’re too busy for this, simply leave it to us and rest assured you will be in good hands. At Osome, you will have your own personal Chartered Accountant who gets to know your business: files reports, optimises tax, and keeps books tamed. Get solutions for your business and let manual labour be a thing of the past!

3. Organise A Bookkeeping System

While the terms bookkeeping and accounting are often used interchangeably, these are in fact, two vastly different functions.

Accounting is the more advanced process of annual reporting that involves the preparation and payment of annual taxes to the authorities, which includes calculating profits and losses. On the other hand, bookkeeping refers to the daily management of your business finances, which involves recording transactions, reconciling bank statements, keeping tabs on cash inflows and outflows and other expenses. Accounting and bookkeeping go hand in hand, so make sure you have a smooth system running so both functions can be performed efficiently!

4. Set up a Payroll System

Paying your employees on time is crucial in keeping them happy and productive. Start by deciding on a payroll schedule, whether you would be paying your staff on a weekly, fortnightly or monthly basis — no longer than a period of a month. You should also have all your employees’ information, detailing any contributions or deductions that should be included in their salaries.

Find out more about payroll here.

5. Organise Payment Processes

When your business starts generating sales, you will have to decide on a way to accept payments. If you are selling products, consider looking into payment platforms that allow you to accept credit card payments.

If you are selling services, this process can be a fuss free one through issuance of invoices for your clients to make payment to your business bank account. If you are a business owner with physical premises, you could source for a credit card service provider, or look for online means of payments including PayPal or e-wallets like PayNow, Google Pay and other ways that enable you to receive payments from your buyers.

6. Determine Tax Obligations

Contingent on the legal structure of your business, the tax obligations may differ. For example, if you are self employed under the Sole Proprietorship, Limited Liability Company (LLC) or Partnership structures, you will claim business income on your individual income tax return. Contrarily, if your business is of a bigger scale, your business tax and personal tax will be considered separate entities, with your salary from the business taxed as an employee instead.

Additionally, depending on your business model, it is likely that you will have to pay tax beyond those imposed on your profits. For instance, if you are importing your goods, you will have to take note of import tax including Singapore’s Goods and Services Tax (GST). The exceptions would be investment of precious metals, the lease and sale of residential properties and the provision of financial services. Unless your products qualify for import relief, chances are there will be some form of duty incurred.

Also, remember to check if you have to register your business for GST. In Singapore, it’s mandated by law for companies to register for GST if the business is generating more than SGD $1 million in revenue. You will then need to charge your consumers an extra 7% on the goods and services you sell. This amount must be paid to the government and cannot be kept by your business. You can register for GST directly at the Inland Revenue Authority of Singapore (IRAS) website.

Stephanie started her own company, specialising in ergonomic gaming chairs. Her business took off during the Circuit Breaker period, with more employees working from home. Within that year, her business raked in more than SGD $1 million in revenue. Subsequently, she had to register for GST with IRAS, and imposed an additional 7% on her gaming chairs, which were absorbed by her customers.

7. Review your Administrative Methods

As the nature of your business changes and expands, chances are that your accounting needs will follow suit as well. When you first start out in your small business accounting, you may make use of a simple spreadsheet to organise your books. However, as the company grows, this method might not be viable and you may have to consider more advanced accounting methods. As such, always remember to review your ways and assess the amount of time you are putting into managing these accounts, and whether you should consider outsourcing so you can focus and invest more time in your core business.

Stay Focused on Growing your Business

Still need professional help with your business finances? Fret not, we’re here to help.

If your paperwork pains are affecting your focus on your business growth, leave it to us to settle the boring accounting processes. With no-tricks pricing, we charge a flat fee that covers your bookkeeping, financial statements, management reports, and tax filing, so you can always stay on top of your small business bookkeeping. If you’re in need of advice, simply drop our experienced accountants a message at any time of the day, and they will get back to you in a jiffy.

Have more questions? We’d be more than happy to chat!

Share this post:

Tips to run your business smarter.
Delivered to you monthly.

You'll receive a verification email you'll have to open and confirm the subscription.

You might like it

E-commerce

How To Upsell to Your E-commerce Customers

We are inundated daily with countless ads throughout our day, both online and offline. As an e-commerce store retailer, one of the challenges that you may face is trying to get your products and message across to prospective customers.

E-commerce

Types of Business Models for E-commerce

If you are planning to start a new e-commerce business venture, this is the best time to do it! For seasoned business owners who are thinking of diversifying their business into e-commerce, you are at the right place.

E-commerce

An E-commerce’s Checklist To Prepare for 2021 Holiday Sales

Although the sales period will mean that your customers’ shopping carts will be busier, this also brings about its own set of challenges for your online business. Follow our holiday season checklist to ensure your business is well equipped for the shopper surge.

Accounting

What Important Records Must I Keep As A New Business Owner?

Good business record keeping is crucial, from managing costs for legal, regulatory or tax reasons to simply managing and improving your business. If you are just starting up your business, it might not be the first thing that comes to your mind, but it can help you build a strong foundation.

Running My Business

3 Things To Consider Before Renting Your First Office Space

If you have always been working from home for your small business and are contemplating moving to a bigger space to accommodate your staff and to have a central office location, you may be looking out for office spaces to rent.

E-commerce

Digital Payment Trends For E-commerce Sellers To Know

Today, consumers are switching from traditional payment methods, such as cash, cheque and cards to digital payment. The global pandemic has fuelled this unprecedented shift in the consumer’s behaviour.

E-commerce

Creating an Invoice When Selling on Amazon

This article helps Amazon sellers who are finding out how to create, access and share invoices on Amazon.

E-commerce

12 Ways To Drive More Traffic to Your Online Store

When your website is finally live, you want to share it with as many people as possible. How do you get people to your website and excited about your products and shop from your store?

Government Grant

Wage Support & Rental Relief for Businesses in Singapore’s Stabilisation Phase

Tighter COVID-19 restrictions will be implemented from 27 September to 21 November 2021. Find out what support SG companies can receive from this Stabilisation Phase.

E-commerce

A Design Guide for E-commerce Websites

If you’re looking to improve your e-commerce page and improve sales, you might want to learn the fundamentals of how to design a good website.

Entrepreneur's Bootcamp

Best Practice Invoicing Tips for SMEs

This article will help Singapore-based SMEs get to grips with the best invoicing practices. Take a look at the tips and how-tos to guide you toward being more streamlined and savvy.

E-commerce

Which Is The Better Payment Gateway: Paypal or Stripe?

As an e-commerce business owner, you would have heard of payment gateways PayPal and Stripe. With these two big platforms being the most popular online payment gateways, you may face a dilemma when it comes to deciding which payment gateway to use.

Tips to run your business smarter. Delivered to you monthly.

You'll receive a verification email you'll have to open and confirm the subscription.

We’re using cookies! What does it mean?