Bookkeeping involves the process of recording, analyzing and interpreting the financial transactions of a business or individual. The discipline of bookkeeping accounts for a large proportion of the accounting process. Accurate bookkeeping is a necessity if you run your own business. It may seem to be something of a chore but it’s vitally important that you keep track of your revenue and outgoings. Many businesses which would otherwise have been successful have been brought down by their failure to maintain proper financial records. Whether you do it yourself or hire someone else to do it, bookkeeping is essential.
To close the accounts, the following documents are required:
- Bank Statements
- Invoices / Receipts for expenses
- Sales invoices
- Rental / Lease agreements (if any)
- Payslips (if any)
Compilation of Financial Statements
Companies are required to prepare the complete set of financial statements which includes the profit or loss, balance sheet, statement of changes in equity, cash flows statement and noted to the financial statements. It is further supported by the IRAS that companies are required to prepare the Financial Statements for end of financial year for Tax Return filing purposes.
Management Accounting (Costing)
Management accounting is a critical profession that drives business performance. By definition, management accounting involves partnering in management decision-making, devising planning and performance management systems, and providing expertise in financial reporting as well as control to assist management in the formulation and implementation of an organization’s strategy.
Budgeting for a business is a process of preparing a detailed statement of financial results that are expected for a given time period in the future. Budgeting is usually prepared for short, mid-range, longer term time periods. A common set of time periods for budgeting might be a month, a quarter, and a year. It would help develop sets of reasonable and attainable goals using data that need control (such as sales data).
Today’s economic climate calls for executives who can apply vigorous financial analysis as they evaluate business performance, weigh potential acquisitions, and assess global competition.
Financial analysis often refers to the process of evaluating businesses, projects, budgets and other finance-related entities to determine their suitability for investment. Typically, financial analysis is used to analyze whether an entity is stable, solvent, liquid, or profitable enough to be invested in. When looking at a specific company, the financial analyst will often focus on the income statement, balance sheet, and cash flow statement. In addition, one key area of financial analysis involves extrapolating the company’s past performance into an estimate of the company’s future performance.