Any business owner knows that accounting is an integral part of the business. Behind the glitzy facade of power dinners, slick presentations and press announcements, lies the set of numbers that tells the tales of a company’s performance. The accounts give the business owner an account of what have transpired in the last several months. They are an important indication of the company’s financial health. To leverage the opportunities that abound in the accounting market, companies have appeared that assist clients with their bookkeeping and tax filing needs. While the lure of passing on mundane, day-to-day tasks of tracking the numbers is tempting, companies need to consider if outsourcing this critical business function works for them.
A common pitch used by outsourcing vendors is “Outsource your work to us and free up your time to work on your core business.” While accounting and tax filing outsourcing does relieve businesses of their back-end tasks and allow them to focus on sales, things may not be simple as they look. Beyond the promise of increased efficiency, one has to decide if the process of outsourcing really gives the company savings in time, which have to be considered in relation to increased costs. If the company is new in business, the low sales volume may not justify the effort and expense in passing the job to the vendor. The costs incurred alone in the outsourcing process may be all it takes to wipe out any profit gained during the month. Added to this is the time spent in collating and compiling the figures for the vendor. If the time spent in collecting revenue and expense figures from the various departments exceed the savings in time achieved by outsourcing, then outsourcing may be counterproductive. If however, the figures are already properly recorded and readily available, and the outsource fee charged is reasonable, then outsourcing may be a good option. An outsource vendor will be able to produce, in a timely manner, a comprehensive set of figures for Management to review. This will be useful when the executives look at the profitability of the company and decide on its future direction.
Another factor that should be considered is the available skills of the staff. Good accountants are always in demand, and top companies jostle with one another to bring the brightest accountants on board. Faced with such tough competition, a new company may not have the financial resources to hire the best brains to crunch its numbers. In this case, outsourcing may be the next best option. The issue of talent is especially pertinent in today’s market. In 2013, the Singapore government revamped the accounting trade, in a bid to raise the level of professionalism in this industry. A new statutory board known as Singapore Accountancy Commission (SAC) now oversees the profession, while all new accountants have to go through the rigourous Singapore Qualification Programme (Singapore QP). Hiring an accounting firm allows the customer to bring in qualified professionals to ensure its numbers are in order so that it stays in line with legal requirements. This is especially helpful when companies have to remember to file taxes after the end of their financial years. Using outsourced accounting services ensures they will never miss their deadlines.
The Accounting and Corporate Regulatory Authority (ACRA), Singapore’s governing body with oversight of accounting and corporate governance matters, has a compliance rating in place, which it uses to rate all companies registered with it. A colour-coded rating system gives each company a positive or negative rating, with the corresponding code displayed against the company name during public searches on ACRA’s Bizfile portal. A positive rating is awarded when a public company holds its Annual General Meeting (AGM) every year and within 15 months of the previous AGM, or in the case of a newly-incorporated company, 18 months of incorporation. In addition, the company must file its annual returns within 30 days of the AGM. Getting a positive rating also requires that during the AGM, the accounts laid must not be more than six months old for a private company, and not more than four months old for a public company. Having a reputable accounting firm handle a company’s accounts ensures that a company achieves a positive compliance rating. This goes a long way towards giving the company credibility in the market and making it attractive to potential investors, working partners and even potential buyers, who assess companies with criteria like good corporate governance and financial self-discipline.
Engaging an accounting firm to handle one’s bookkeeping and tax filing has its benefits, but there are several factors to consider before signing on the dotted line. Handled properly, it will be beneficial, and will ensure that the company stays relevant to the market, and is sustainable for the long term. It will allow the company to build its market credibility and reach greater heights.
http://www.acechamp.com/wp-content/uploads/2016/09/taxes.jpg210600adminhttp://www.acechamp.com/wp-content/uploads/2016/03/logo-300x83.jpgadmin2016-09-19 04:11:452016-10-05 07:06:10Accounting and Tax Filing Outsourcing – Is It Worth The Effort?
AceChamp Business Consultants Pte Ltd is a one-stop integrated business solutions provider for all your corporate needs. Incorporated in Singapore in 2008, AceChamp is an established and accredited agency that offers a comprehensive list of full-fledged services, inclusive but not limited to company incorporation, accounting and tax, business support and immigration services.
5001 Beach Road #08-08
Golden Mile Complex