After you have incorporated the company in ACRA, the next thing to do is to know how to set up a simple and proper bookkeeping system/process. Bookkeeping is commonly known as record keeping, which means that all the transactions that arise from the company have to be recorded. I will now share with you on what is the best and easiest method to set up a proper bookkeeping process. Do note that this method is suited for people who do not use any accounting software and intend to outsource the accounting function to an accounting firm in Singapore.
Generally, company will have 2 sets of invoices – the sales invoices and the purchase/expenses invoices. The easiest way to sort these out is to separate them into 2 different files. You can then indicate the file by labeling it as “Sales Invoices for 2016”. Similarly, you can do the same for the purchase invoices and label the file as “Purchase Invoices for 2016″. With proper labels and the correct categorisation of your invoices, you can easily retrieve them and refer to them whenever you have to do so.
Next, once you have received a payment from your client, be it by cash, bank transfer or by cheque, you should indicate the mode of payment received, the date, cheque number (if it is by cheque) on the sales invoice copy. This way, you can always refer back to the previous records whenever you want to check if a particular invoice has been cleared or not.
Similarly, whenever you make a payment to your vendor or supplier, you will need to attach a payment voucher with the purchase/expense invoice. The payment voucher can be purchased in any stationery store and with that, you have to indicate the date of payment, method of payment and amount being paid. You can also input any remarks on it, such as payment is for deposit etc.
Under the MOM regulations, from 1st April 2016, all employers have to issue itemised pay slips to all employees. The pay slip must include all the employee’s particulars, salary, any allowances, additional pay, any deductions and overtime pay, if any. Employers are required to keep a copy of the employee pay slip for at least 2 years for current employee and 1 year of the latest 2 year pay slip for ex-employees.
The best way is to keep all the pay slips and the CPF statements together in a file, which can then sub-divided into different months.
Nowadays, you may not receive any hard copy bank statements as part of the environmental friendly initiative. However, if you are still receiving them, you can put them all together into the sales invoice file if there is sufficient capacity. The bank statements are required to perform bank reconciliation so that all transactions are accounted for.
The credit cards statements are not the usual ones that consumers have, it is the credit card terminal that provide you the payment function for your client. Most of the credit card company will charge a percentage from the sales whenever the client uses this payment method. With the credit card statements, we can find out what are the charges incurred from the sales and put that into the operating expenses.
These are the few things you will have to take note of to ensure that all transactions are properly maintained. It will be in a mess if you do not keep any records or if the transactions are not filed properly. I do hope that everyone can follow these methods and maybe this will help you in future.