Category: Accounting

How cash flow forecasts and reporting can help your business through turbulent times

How cash flow forecasts and reporting can help your business through turbulent times Banner

How cash flow forecasts and reporting can help your business through turbulent times

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Amid economic uncertainty and volatility, businesses face unique challenges that can significantly impact their financial stability and long-term viability. Chief among these is ensuring sufficient levels of available cash, which is why understanding your business’s current and projected cash flow is crucial.

Ahead, Yang Shuzhen, Director of Regional Accounting for BoardRoom Singapore, explores the cash flow forecast and reporting strategies and key finance metrics that can help strengthen your business’s resilience in demanding times.

Why cash flow reporting is vital for business success

The preparation of cash flow reports promotes good financial management in several ways. Importantly, they gauge your business’s ability to generate cash and use available cash to meet its obligations – both of which are necessary for surviving and thriving amid an economic downturn.

“Put simply, if you don’t have enough money available, you cannot pay for expenses,” says Shuzhen.

The proper tracking of cash inflows and outflows is critical, as it enables businesses to:

  • gain real-time insights into their financial position;
  • create data-driven cash flow forecasts for nimble, informed decision-making and forward planning;
  • identify potential cash shortfalls and take proactive measures to address them;
  • capture opportunities for investment, expansion or increased remuneration where excess cash reserves are identified; and
  • have transparent, trust-building discussions with lenders, investors and suppliers.
Cash flow vital for business success

The requirements for cash flow forecasts and reporting in Singapore

According to the Singapore Financial Reporting Standards, understanding an entity’s cash flows helps users of financial statements evaluate its cash generation capability, needs, and timing. The objective of this Standard is to require the provision of information about the historical changes in cash through a categorised cash flow statement encompassing operating, investing, and financing activities.

Businesses can assess their cash flow situation via the direct method of reporting, which records actual cash receipts and payments, or the indirect method, which adjusts the net profit or loss for non-cash items.

“They can also monitor cash inflows and outflows in their day-to-day operations to understand their net cash flow and forecast future cash availability,” Shuzhen says.

Companies must report their cash flows under three main categories: operating activities, financing activities and investing activities.

“This allows your finance team and stakeholders to understand cash inflows and outflows for each category and make decisions from there,” Shuzhen explains. “For example, investors can decide whether they want to continue investing, depending on their risk appetite.”

Cash flow forecasting and reporting

The difference between unlevered free cash flow and levered cash flow

Free cash flow refers to the amount of cash your business has after accounting for its capital expenditures.

It can appear on your balance sheet as either:

  • Unlevered free cash flow (UFCF) – This is the amount of money your business has available before meeting its financial obligations (eg. debts, expenses, taxes and interest payments). UFCF shows your gross free cash flow and is an important figure for investment bankers, potential buyers and executive staff.
  • Levered free cash flow (LFCF) – This is the amount of money your business retains after meeting recurring short- and long-term financial obligations. LFCF shows what cash can be put towards investments and building equity and is of interest to bankers, buyers, internal staff and board members.

Using these two metrics in your cash flow reporting can help you manage your finances effectively and tailor your cash flow statements for particular stakeholders. However, many Singaporean businesses prefer to assess their cash flow based on the liquidity of their assets.

Best practice for elevating your cash flow management

To support financial stability and growth in times of economic growth or downturn, consider implementing the following cash flow management practices within your organisation.

Reduce expenses and optimise credit terms
Assessing your credit terms can be useful for addressing predicted cash shortfalls. Many businesses stretch payment timelines with vendors while softening credit terms with customers. Other potential strategies for increasing available cash include securing additional funding sources, diversifying revenue streams and exploring alternative vendors.
Optimise excess fund
Explore various market instruments to make the most of your liquid cash. These may be investment opportunities that offer lower interest rates, shorter maturity periods and easy cash access while also generating additional incidental revenue.
Employ robust accounting practices
Employing comprehensive accounting practices that encompass meticulous cash flow tracking, transparent reporting, and forward- looking projectional forecasting is indispensable for navigating financial complexities and enables data-driven decision making.
Use proper accounting software
In contrast to non-specialised software like Excel, advanced accounting programs like BoardRoom’s partner platform Xero leverage automation and AI technology to streamline financial processes (eg. manual checking), reduce human error and provide precise, real-time visibility of cash flow.
Regularly analyse cash flow data and projections
Historical cash flow statements and cash flow forecasts can provide valuable insights into your financial performance. They can empower you to develop realistic budgets, set achievable financial goals, pinpoint areas for improvement, and make informed decisions about new investments, risk mitigation and resource allocation – resulting in greater control over your financial outcomes.

Partner with a professional accounting team

Engaging outsourced accounting services can help you improve your cash flow management while ensuring compliance with Singapore’s financial reporting standards.

For example, many businesses perform their bank reconciliation monthly. This can create difficulties for your finance team, who may need to manually check thousands of transactions and investigate missing or incorrect deposits at the end of the month (particularly if your business receives daily deposits).

According to Shuzhen, BoardRoom’s Accounting Services team often recommends that clients do their bank reconciliation weekly instead.

“For businesses who we’re helping to manage vendor payments and track funds coming in from customers, doing bank reconciliation weekly, or even daily, gives them a more regular picture of cash inflow and outflow,” she says. “This is especially the case if they use a POS system, which often results in a timing difference between transactions recorded in the POS system and the bank statements.”

Enhancing your cash flow tracking with strategies like this is just one way that external accounting support can help make your cash flow management easier, faster and more accurate.

If your organisation operates across borders, an international accounting and tax firm can also assist with complex processes such as foreign currency cash flow management.

Partner with a professional accounting team

Enhance your cash flow reporting with professional support

During turbulent times, businesses that prioritise robust cash flow management gain a competitive advantage, enabling them to weather economic storms and emerge stronger in the face of adversity.

As one of the Asia-Pacific region’s most trusted accounting services providers, BoardRoom has the skills, expertise and experience to boost the accuracy and efficiency of your cash flow management – bolstering the operational resilience of your business.

Our professional team possesses deep, up-to-date knowledge of regional accounting regulations and standards to help satisfy your cash flow management and reporting obligations.

Contact us today to discuss how we can help position your company for long-term success.

Contact BoardRoom for more information:

ShuZhen

Yang Shuzhen

Director of Regional Accounting

E: [email protected]

T: +65 6536 5355

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Why Your Business Needs Accounting Services in Singapore

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Why Your Business Needs Accounting Services in Singapore

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Accounting is one of the essential functions your business requires for robust financial management, no matter how small or large your company is. However, many business owners still engage an in-house accounting team to take care of these tasks. This not only takes up their valuable time but also heightens the risk of compliance issues that could cost their business in the long run. 30% of Singapore start-ups fail within the first three years, and poor financial management is one of the principal causes.

In Singapore, there are a number of accounting requirements your business needs to fulfil if they don’t want to be penalised, which could be stressful for your company to manage and be compliant with if you are low on resources.

This is where outsourced accounting services rise to the forefront. Outsourcing professional accounting services offers a multitude of benefits that go beyond just bookkeeping. These services help facilitate the financial operations and planning of your company, allowing for better management, cash flow, and compliance, whilst giving you more time to focus on your core business goals.

Discover what different types of accounting services are essential for business success, ranging from advisory to tax filing, and why getting them outsourced to a reputable accounting firm is pivotal to propelling your company to even greater heights.

Types of accounting services

There are numerous services that fall under the blanket of accounting, all of which need to be paid careful attention to in order for your business to run smoothly and efficiently. When you engage an outsourced accounting service provider, you should ensure they can deliver the following essentials:

  • Tax Accounting & Planning: Supports with all taxation-related matters, including but not limited to tax filing, tax preparation, and tax strategy.
  • Bookkeeping: Provides regular maintenance of all your company’s important records, reports, statements, and so on.
  • Statutory & Governmental Compliance Reporting: Ensures your company is operating in accordance with local laws, such as preparing financial statements in XBRL format.
  • Management Accounting: Conducts business analysis, identifies trends and opportunities, and advises on long-term strategies.

Accounting services: understanding why to outsource

What with all the different components of accounting, a high level of effort and expertise is required in order to carry out all these tasks correctly and in a timely fashion. Doing this in-house could prove to be a huge strain on many businesses, potentially resulting in errors and inefficiencies. By outsourcing these services to a professional accounting team, your company can effectively relieve all of these stresses, giving you access to individuals proficient in various areas of accounting, be it tax management or bookkeeping. This opens up the possibility of a range of benefits for your business, such as:

  • Staying compliant with statutory requirements and regulations
  • Saving on hiring costs and recruitment training time
  • Enjoying professional accounting advisory services from experts in the field
  • Gaining a clearer picture of your company’s financial health to make informed decisions
  • Maximising your tax savings and deductions
  • Establishing an organised and automated accounting flow

What is the upside of accounting advisory services?

Accounting advisory services guarantee your business gets the best, most credible advice on any accounting issues you need to handle, no matter how technical or specific these instances may be. By nature, professional accountants have extensive knowledge of all aspects of financial reporting processes in accordance with local laws, which includes the Singapore Financial Reporting Standards (SFRS). They will also keep your business up-to-date with all the latest rules and regulations, making sure you know what is going on at all times, and thus ensuring you stay compliant in a field that is constantly evolving and changing.

What can accounting and bookkeeping services do for my business?

Bookkeepers in an accounting firm can help you to keep a record of general ledger reports, trial balances, profit and loss statements, balance sheets and schedules.

Bookkeeping also involves bank reconciliations, which compares your accounting data to what the bank has recorded, helping to identify any discrepancies in your records or possible transaction errors.

An accounting firm doing your bookkeeping also ensures that all relevant documents and information (financial statements, tax computation and supporting schedules, comprehensive profit and loss statements) are kept for easy reference. This helps to speed up the retrieval of documents for statutory reporting and filing of taxes.

With thorough and updated bookkeeping services, you can swiftly identify problems related to revenue and cash flow early, helping to avoid any adverse impacts on your business if otherwise left unchecked.

Why does my company need statutory accounting and tax compliance reporting services?

As your business grows, there will be a myriad of legal obligations your company has to comply with. These obligations include the notification of changes of share capital if new shareholders or directors are added or removed, as well as the meeting of tax and accounting requirements that could change depending on your business model and activities.

Another key obligation is the filing of year-end financial statements and board resolutions that are needed by Singapore’s Accounting and Corporate Regulatory Authority (ACRA).

A credible accounting firm assists you in the understanding of convoluted statutory requirements and ensures that you comply with the laws.

The last thing you want is an audit by IRAS digging through your past records, wasting even more of your resources and time or worse – issuing a hefty fine to your company for non-compliance and/or errors!

How can tax and accounting planning services help my business?

While staying compliant is of critical importance, outsourcing your tax and accounting services in Singapore allows you to enjoy tax breaks and exemptions that you might have been unaware of, whilst helping you develop long-term planning strategies to help you achieve significant tax savings over time.

To claim certain tax rebates and business expense deductions, you must meet a set of qualifying conditions. Many nuances are involved in obtaining these deductions successfully and legally.

Moreover, if you conduct business overseas, there are numerous tax treaties that you may be unfamiliar with. This could lead to double taxation, causing you to pay more taxes than you need to.

A professional accounting firm can advise you on all the tax benefits you are entitled to along with helping you obtain them so that you minimise costs and keep profits high.

If your business is spread across different locations, these services can also evaluate the tax consequences of cross-border transactions to improve your company’s tax position, having a breadth of knowledge of different jurisdictions. In short, they are readily equipped to support and advise on all your tax accounting needs.

How will management accounting services help my business?

Accounting doesn’t just keep you compliant with regulations, it is also a component of good business management that can help your company to grow.

A regional accounting firm has management accountants that can conduct a business analysis of past and present accounting data, as well as help analyse different sales channels, products, services, marketing activities and business models.

Management accountants will analyse the basic data and make forecasts, budgets, performance measurements and plans, then present them to senior management to assist in its operational decision making. A management accountant may also identify trends and opportunities for improvement, improvement, analyse and manage risk, arrange the funding and financing of operations and monitor and enforce compliance.

By staying up to date with industry trends, management accounting can provide and advise on long-term strategies that enable you to surpass your competitors and achieve your business objectives.

Do accounting services include accounting software?

As part of their service offerings, some outsourced accounting firms use specialised accounting software to streamline business operations – such as Xero Cloud Accounting System, which BoardRoom can help set your business up with as a Xero Platinum Partner.

It takes more than just getting the software set up in order to boost your accounting efficiencies, which is why working with a team of experts who are well-versed in the accounting system’s implementation is crucial. By assisting with set-up and optimisation, your company can then fully leverage the benefits of accounting software, whilst having peace of mind that your financial data has been transferred securely and correctly.

Choose BoardRoom as your outsourced accounting services provider in Singapore

Whether you’re running an SME or are part of a multinational organisation, hopefully this article has helped you better understand why your business will appreciate the advantages of outsourced accounting services.

At Boardroom, we are experts in accounting, helping companies from corporations to fast-growing SMEs, with their accounting outsourcing, allowing them to focus on what matters – growing their business and getting more clients.

From handling tax accounting to managing statutory compliance reporting for companies in Singapore and across Asia-Pacific, we help companies with our full suite of accounting services, allowing them to remain compliant, maximise their tax benefits and stay organised in their bookkeeping.Contact us today and empower your organisation with greater freedom through our accounting solutions.

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The Accounting and Tax Trends that are strengthening Singapore’s Economic Growth Prospects

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The Accounting and Tax Trends that are strengthening Singapore’s Economic Growth Prospects

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As a global hub for trade, finance and technology, Singapore presents a wealth of growth prospects for businesses looking to expand throughout Asia. Its high-income economy, low corporate tax rate and abundance of business incentive programs (such as the tax exemption scheme for new companies) further enhance its appeal in the eyes of foreign investors.

The Monetary Authority of Singapore has predicted that Singapore’s economic growth will slow down in 2023, which means your organisation’s resilience is now vital. Building this required resilience necessitates a robust understanding of the latest trends in tax and accounting.

Particularly in the face of increasing expectations for environmental, social and governance (ESG) action – bolstered by the government’s newly shortened timeline for achieving net zero emissions – prompting finance teams to elevate their sustainability reporting.

BoardRoom Singapore’s Director of Accounting, Yang Shuzhen, discusses the most significant tax and accounting trends in 2023 and the strategies you can use to prepare for economic change.

Singapore business tax trends

Singapore business tax trends

The 2023 Budget contained several significant tax updates that will impact the corporate sphere. Notably, the government announced its plans to implement the Global Anti-Base Erosion rules of the OECD/BEPS two-pillar plan.

Developing tax trends in Singapore businesses therefore include:

The introduction of a domestic top-up tax
Preparation by businesses for Pillar Two
Fresh tax incentives
The Singapore GST increase, now already in effect

1. The introduction of a domestic top-up tax

Under Pillar Two, the new minimum Singapore corporate tax rate will be 15% for multinational companies with revenues of at least EUR 750 million. These group entities will need to redress their profits so they are paying a minimum effective tax rate of 15%.

Countries involved in the OECD/BEPS collaboration are still deciding on their approach to implementing Pillar Two. Once the government of each country that your organisation has a presence in has announced how it will implement Pillar Two, you can decide in which country you will pay the top-up tax.

2. Preparation for Pillar Two

The best thing businesses in Singapore can do right now is to undertake an audit to identify where they are conducting their value-creation activities. It is a good time to tidy up your operations and ensure that both your value creation activities and your revenue and profits are recognised in the same country.

In Singapore, the new top-up tax is scheduled for implementation from 2025. Preparing for this change may require major adjustments to business operations, so organisations should begin the process now to ensure a smooth and successful transition.

3. Fresh tax incentives

The 2023 budget announced the following tax incentives to encourage foreign investment and economic growth:

  • Corporate Income Tax rate remains the same, with the partial tax exemption on the first $200,000 of a company’s chargeable income;
  • a 200% tax deduction on qualifying market expansion and investment development expenses under the DTDi scheme;
  • an additional tax allowance for businesses that incur qualifying fixed capital expenditure on approved projects under the IA scheme;
  • 100% IA support on the amount of approved capital expenditure and net of grants for approved automation projects;
  • concessionary tax rates of 5%, 10%, 12%, and 13.5% on income from qualifying banking and financial activities, and corporate and advisory services under the FSI scheme;
  • the introduction of a new Enterprise Innovation Scheme to raise tax deductions to 400% on qualifying expenditure incurred from the YA 2024 to YA 2028 on various innovation boosting activities; and
  • enhancements to the double tax deduction for internationalisation DTDi Scheme.

The budget also announced extensions for a range of incentive schemes across various industries.

View our Singapore 2023 Budget Tax Highlights for a complete list of announced tax updates.

4. The Singapore GST increase

Singapore’s goods and services tax (GST) rate rose from 7% to 8% in 2023. This rise has impacted businesses in various ways, with many organisations facing increased costs across core expenses such as materials, labour, rent and utilities.

Some businesses are choosing to register for GST to claim on the GST paid for purchases. However, there are a few factors to consider to determine whether this is worthwhile for your organisation. For example, you should decide whether the associated compliance costs outweigh the benefits of claiming on taxes paid. Additionally, you must be mindful when fulfilling your compliance requirements for quarterly GST returns to avoid making an error and being penalised for it.

The GST rate is set to rise another percentage point from 2024, which means your decision to register for GST will only become more important.

Singapore accounting trends

Singapore accounting trends

The accounting function is quickly evolving in response to changes in economic growth and environmental sustainability matters, as well as technological advancement.

In Singapore, this transformation is largely characterised by the following three trends:

  • the digitisation and digitalisation of financial management;
  • the provision of meaningful corporate disclosures; and
  • the rise of sustainability reporting.

1. The digitisation and digitalisation of financial management

The COVID-19 pandemic accelerated digital transformation of many vital business functions, including accounting. Now, businesses have the opportunity to use innovative digital technologies to promote efficiency, productivity and stability in volatile times.

For the best results, consider breaking the digital transformation of your accounting function down into three parts:

  • managing your human resources, including the training your people need to utilise new software and follow new processes;
  • selecting the right accounting software depending on your business needs and implementing it effectively; and
  • refining your processes post-implementation for improved results and reduced risk.

2. The provision of meaningful corporate disclosures

Singapore’s Financial Reporting Standards are updated every year, meaning businesses must constantly elevate the quality of their corporate disclosures to maintain compliance. Fortunately, digital advancement is creating opportunities for improved data collection and analysis.

Beyond standard facts and figures, regulators are now demanding more qualitative information in business reports.

“Businesses need to ask themselves, ‘Through our processes, how do we keep track of the narratives and qualitative information we need to satisfy compliance requirements?’” Shuzhen says.

In addition to reducing your business’s compliance risk and improving its reputation, strengthening your disclosures with data-driven insights will also enhance your understanding of your business’s health and outlook.

Business leaders who facilitate strong financial forecasting are empowered to:

  • make informed decisions about the strategic direction of the business; and
  • bolster the confidence of stakeholders by advising them of what is to come.

3. The rise of sustainability reporting

Businesses in Singapore are under pressure from regulators, consumers, shareholders and workers to produce insightful ESG reports. Most accounting teams are already publishing valuable ESG-related information in their financial reports, so they are well positioned to help demonstrate the ESG efforts of businesses through sustainability reporting.

Business leaders can empower their accounting teams to deliver timely, high-quality sustainability reports by implementing procedures for collecting specific ESG data that aligns with stakeholder expectations.

Remember that upgrading your data collection processes can be a complex, time-consuming endeavour, especially amid shifting regulatory demands. The earlier you establish procedures to capture the right data, the easier it will be to file your reports at the end of the financial year.

Skills finance professionals need in 2023

Skills finance professionals need in 2023

This year, tax and accounting professionals can support businesses to prepare for uncertainties in Singapore’s economic growth by embracing innovation and expanding their skill set. The key competencies finance teams now require are twofold.

1. An open and adaptive mindset

“Accounting teams need to be open to exploring new software and using the built-in functionality to understand how it could help them generate financial statements,” Shuzhen says.

“Gone are the days when accountants would merely key in numbers. Modern systems such as Xero can now take care of much of the groundwork traditionally done by accountants, such as capturing and generating data.”

Numerous accounting software options are available to businesses today, so it is important to consider which programs will best serve your needs. Understanding the types of data you need to collect will help you determine which systems are strong enough to generate the information you need.

Business leaders who are hesitant to explore new functionalities serve to limit the possibilities for what their teams can achieve and may struggle to navigate shifts in Singapore’s economic growth trajectory.

2. Well-developed analytical skills

Now that many transactional and data-collection tasks can be automated, modern finance professionals are able – and expected – to take a more strategic role within businesses. “They now have more time to spend on analytical work and quality reporting,” Shuzhen says.

A recent global survey showed that, in 2023, just under half of C-suite and finance professionals in Singapore plan to invest in data analytics capabilities to make better decisions using data. Accounting teams with data analytics skills can make strategic recommendations for optimising operations to minimise the impact of external disruptions and promote business recovery.

Finance professionals should also be able to present data in meaningful ways to specific stakeholder groups – thus maximising the value of the available data.

“For example, if I report to a Finance Manager, they will want to go through all the details, line by line,” Shuzhen explains. “But if I present the information to a Chief Financial Officer, I will do this in the form of a flash report that shows EBITDA and provides some analysis on the ratios important to the business.”

Drive business success in Singapore

For over 50 years, BoardRoom has been helping businesses achieve their expansion goals with our holistic approach to corporate services. Our teams possess in-depth knowledge of local business environments throughout the Asia-Pacific region, which means we can help you consolidate multinational taxes and manage cross-border accounting to ensure strong local compliance, reduce risk and enhance efficiency.

When you engage our expert tax advisory and filing and accounting services, you will also start saving time and money that can be redirected to progress core business objectives.

To find out more, please contact us today.

Contact BoardRoom for more information:

ShuZhen

Yang Shuzhen

Director, Accounting & Tax

E: [email protected]

T: +65 6536 5355

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Fast-track business growth with a seamless transition to outsourced accounting services

Fast-track business growth with a seamless transition to outsourced accounting services

Fast-track business growth with a seamless transition to outsourced accounting services

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If your company has plans to expand throughout the Asia-Pacific region (APAC), outsourced accounting services can promote smooth business growth in a volatile economic environment.

Considering the complexity of the accounting function, it is not unusual for business leaders to feel daunted at the prospect of engaging an external team. In this article, we discuss the ways that outsourcing supports a smart business model and the steps you can take to ensure a seamless transition process.

Why outsource accounting?

The many benefits of outsourcing bookkeeping and accounting mean it is becoming an increasingly popular option for APAC businesses. In fact, a 2020 global study found that almost half of finance accounting professionals are considering outsourcing more processes.

There are three main reasons for this trend.

1. Access to expertise and experience

Firstly, outsourcing provides access to trained professionals who possess a high level of relevant knowledge and skill — qualities that are not always easy to attain through recruitment.

“Companies often want to move to outsourcing because they’re looking for professionals who can help them improve their processes,” says Yang Shuzhen, Accounting Director for BoardRoom.

Operational teams and managers are usually tied up in day-to-day matters, which makes it harder to look at processes objectively and identify opportunities for improvement. This is just one area where an external team can help.

“And with COVID hitting the world, lots of people have moved back to their home countries,” Shuzhen points out. “This means the labour market is very tight, so many businesses are no longer able to look for the necessary expertise and experience in their own countries.”

2. Quick, reliable service

Secondly, accounting outsourcing provides immediate, effective support at a time when turnover of finance staff is high. “A lot of financial professionals want to take a break or try a totally new industry,” Shuzhen says. “So people are leaving, and in many cases, companies are not able to replace them at the same speed.”

This can result in insufficient handovers as well as staff shortages, where transactions and processes become undone. Businesses facing these challenges will thus turn to an external firm that will have a pool of trained, professional accountants ready to assess the situation and take over the processing.

“They need people who are experienced enough to not only take over their accounting tasks but also advise them moving forward,” Shuzhen says. “An external team can help you establish standard operating procedures and internal controls, which are critical for success.”

Quick Reliable Service

3. Support for digital transformation

The accounting industry is undergoing a period of major change, with digital transformation opening up opportunities to turn data into actionable business insights. The finance function is now expected to help progress strategic business goals in addition to completing transactional tasks, which means the necessary skill set for finance professionals is evolving.

A 2020 Deloitte study found that finance’s new role as a strategic business partner will require businesses to balance human and machine-based competencies while also embodying the four qualities of future-ready companies: analytical, adaptive, agile and anticipatory.

The data analytics skills and technological expertise required to achieve this can be difficult to maintain internally, which is why many businesses are engaging premium accounting firms as a solution.

The impacts of the COVID-19 pandemic have increased demand for outsourcing even further, with the global finance and accounting outsourcing market expected to reach USD 53.4 billion by 2026. This is mainly due to an industry-wide desire for streamlined solutions and stability in uncertain times, which is exactly what corporate services firms can provide.

The challenges of in-house accounting

There are two key reasons as to why APAC businesses are moving away from in-house accounting.

It is labour-intensive

Recruiting, training and managing a finance team takes time — as does expanding the team as your business grows.

“A firm that’s rapidly expanding will see a lot of resources going towards training the team, keeping morale up and ensuring the team is functioning well,” Shuzhen says. “This is important because good financials and timely reporting help the business when stakeholders are making decisions.”

But resignations can be tough on a team. Businesses may spend time on a proper handover and training for the new team, but there will be a learning curve, so it is unlikely they will have the same input as the previous team. There is also no guarantee that the workers will stay for multiple years.

“When these transitions become frequent and handover periods are tight, deliverables may be affected,” Shuzhen says.

It is difficult to adapt to technological change

Digital advancement across APAC is putting pressure on internal teams to adopt new accounting systems that are more complex than traditional ones.

While this adaptation is important for ongoing productivity, staffing shortages brought on by the Great Resignation mean there is often not enough time to ensure new systems are implemented in a correct manner. As a result, the new software can become more of a hindrance than a help, resulting in further delays and expenditure.

An expert accounting partner can communicate effectively with software vendors to ensure new systems are properly customised to suit your business. They can also coordinate a rollout of the new software that’s both strategic and trouble-free, ensuring the most important solutions are implemented first.

How to outsource accounting services

For a straightforward transition to outsourced accounting services in Singapore, we recommend following these steps:

  1. Reflect on the accountancy challenges you are currently facing and what you are hoping outsourcing can solve for you.
  2. Assess the budget you have available for accounting outsourcing.
  3. Contact a reputable accounting services provider. They will talk with you to understand your current situation, help you gather all the necessary information and advise you on the next steps.
  4. Enquire about accounting software solutions the firm provides to determine the most suitable one for your business.

A skilled provider will attend to the critical tasks that need attention first. Once these are under control, they will then work with you to devise a holistic end-to-end accounting solution to suit your business and provide personalised guidance thereafter.

To promote smooth and efficient communication with your provider, it is also worth considering who in your organisation is the best person to liaise with them directly.

The appointed person could be either a finance manager, CEO, business owner or a director: the most important thing is that they have strong finance knowledge and are able to discuss financial matters in detail. This will also help ensure the resulting solutions are tailored to your needs.

Accounting Professional

Choosing the right provider for your business

Your accounting services provider should seamlessly integrate with your business and have a thorough understanding of your challenges, just as an in-house team would. Essentially, your partner should provide all the advantages of an in-house team without any of the drawbacks.

A full-service firm will be able to take over all aspects of your accounting and bookkeeping, from your accounts receivable and payable to your general ledger and financial reporting. They will also be able to provide business support in other additional areas such as cash flow management to help your company reach its goals.

“At BoardRoom, our accounting service goes beyond transactional processing,” Shuzhen explains. “Financial data can be very useful, and we make full use of this data when advising our clients.”

It is important to seek an experienced firm because they will be able to quickly and easily identify effective solutions for any accountancy challenges you are facing. Also, you will be able to trust that the next time your company is audited, it has followed all the correct protocols.

What to avoid when outsourcing your accounting

If you are considering transitioning to accounting outsourcing, avoid delaying your decision.Businesses often waste resources trying to solve accounting problems on their own when an external services provider could have stepped in much earlier and applied solutions in a shorter time frame.

Financial obligations and issues can quickly accumulate, even if the entity is small. So if you are setting up a new entity or branch in a neighbouring country, it is best to engage an external team right from the start to ensure the right accountancy processes are in place.

The longer you wait to outsource, the more complex and time-consuming it can often be to organise your finances.

Financial Accounting

How can outsourcing fast-track business growth?

If your company has plans to expand, an accounting services provider can be an invaluable business partner on your growth journey.

They will be able to assist you by:

Providing detailed advice and accurate data at any time (so you can make timely decisions)
Preparing reports for potential investors
Preparing financial ratios so you can have timely conversations with banks

An accounting partner can also help establish internal accounting controls at your headquarters and roll these out within finance units in other countries. Having consistent internal controls in place across your regional locations means you can easily generate accurate group-wide data at any time of the year.

Ensure multi-country compliance

Another way accounting partners support business growth is by ensuring full regulatory compliance, including the preparation and filing of statutory reports.

In terms of your Singapore obligations, they will ensure all SFRS are met and GST returns are filed on time. Other APAC regions will have different regulatory systems, and some are quite demanding and complex.

By consolidating taxes with a global firm, you can have confidence your business is meeting its local compliance requirements on an ongoing basis.

Begin your transition to accounting outsourcing

No matter where you are on your expansion journey, preparing your accounts is vital for ensuring a smooth and profitable trajectory.

To find out more about BoardRoom’s world-class accounting and bookkeeping services, as well as our complementary payroll outsourcing service, please contact us.

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BoardRoom + Xero | Making your life easier

BoardRoom + Xero | Making your life easier

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How cloud accounting with Xero and BoardRoom is about to make your life easier

The benefits of cloud accounting platform, Xero, are well recognised. Implementing Xero will save your company time, money and effort. It improves your team’s productivity and can even help your company to get paid faster.

However, for most companies, these benefits may take time to achieve. Setting up Xero correctly and migrating your existing financial data into it can be difficult, especially for companies with complex structures. Plus, to truly realise the full benefits of Xero, it’s important to optimise your Xero file to its fullest potential.

It doesn’t have to be hard though. With a partner, such as BoardRoom, your journey with Xero can be a simple and rewarding experience that delivers the power of Xero to your company faster.

Cloud accounting vs traditional accounting

Cloud accounting uses online software and stores the data from your accounts in the cloud. ‘The Cloud’ is a network of remote servers storing vast amounts of data. In contrast, traditional software is installed locally on your computer with data stored on a hard drive or a server on-site.

Traditional accounting has the benefits of not requiring an internet connection and lets you retain individual company control of your security levels and access – providing you continually update everything. However, the advantages of cloud accounting far outweigh these benefits.

Cloud accounting makes it easier for your team to access and collaborate while reducing hardware costs and software expenses. It also offers your company a real-time snapshot of business performance while providing data security and protection. But, maybe most importantly, cloud accounting helps you save time and improve accuracy, which assists your company run more efficiently. This is why many companies use cloud accounting, like Xero.

Xero implementation can be simple with the right partner

Switching to any new accounting system involves effort commensurate with the nature, size and complexity of your company. Unless you have a team who are confident in navigating the set-up and implementation of a new accounting system such as Xero, you run the risk of misplacing data or accidentally limiting essential user access. Additionally, and perhaps most importantly, there may be negative regulatory or financial consequences if these errors occur.

Working with a Xero Platinum Partner, such as our team here at BoardRoom, will ensure your Xero implementation is seamless. We’re experienced in transferring your company’s data from your existing accounting system to Xero. We also know how to correctly set it up based on your company structure. Additionally, this process doesn’t require hours of input from yourself and your team. We request the data from you, and then work in the background to perfect your Xero file setup. This means your team can continue with business as usual.

In addition, BoardRoom offers training and support services to facilitate the change management process for your team. We work hard to help your team learn how to take advantage of all the features Xero has to offer so they can use Xero more efficiently. And if they do have any questions, they can contact BoardRoom’s Xero support services via phone, email or video conference call.

Risks during Xero set-up and migration for complex company structures

Companies with complex structures are most at risk of errors, issues and potentially expensive faults when moving to Xero. Strategic planning is often needed to ensure your company structure is reflected correctly in Xero and that it meets any regulatory reporting requirements.

Attempting a migration of existing data without an implementation partner can be treacherous. Having the support of a partner, such as our team, means you’ll have experts responsible for ensuring a seamless and certified implementation.

accounting software for small business

Our Xero data migration services ensure a complete data migration, comparative balances migration and porting over of last closing balances. Additionally, our online training modules will guide your team through purchase, sales, bank and reconciliation, inventory, reports and other advanced features.

Customising and optimising Xero to suit your company

In addition to ensuring your Xero file is set up correctly, and existing financial data migrated seamlessly, working with a partner like BoardRoom will ensure your company gets the most out of Xero. We’ll identify the apps and integrations, from the thousands available, which best suit your company’s needs and provide training to ensure a smooth transition for your team.

We also customise your chart of accounts or report templates, incorporate your logo into financial documents, or set-up tracking categories and contacts – plus more.

Remove geographical limitations through BoardRoom’s expertise

When you partner with BoardRoom, you’re not working with a regular accountancy firm. As professional services experts, we operate across multiple jurisdictions and offer a wealth of knowledge on all aspects of company administration. This means that no matter where your offices are located, whether Singapore, Hong Kong, Malaysia, China or Australia, we can assist you seamlessly integrate all of your accounts functions through your Xero.

xero implementation partners

In addition to Xero set-up and migration, we also provide incorporation, share registry, company secretarial, payroll, plus many other administrative services. Therefore, by partnering with BoardRoom, your company gains access to our wide range of skills and expertise to assist your administration and accounts teams operate more efficiently.

Save time, money and stress with Xero and BoardRoom

Minimise the risk when migrating your accounting data and ensure your team can easily operate your new Xero system from day one.

Consultations are available for full scale migration, set-up or integration of systems – such as payroll or point of sale. Regardless of the accounting system you are switching from or how complex your company structures are, our team of experts are available to provide support throughout each step of the process.

Partnering with BoardRoom to implement Xero for your company will save you time, money and stress.

Find out more about our cloud accounting software today.

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Fine-tuning the Quarterly Reporting regime to save on compliance cost? But who’s counting? (5 February 2018)

Fine-tuning the Quarterly Reporting regime to save on compliance cost? But who’s counting? (5 February 2018)

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quarterly-report-imageIn the long-awaited outcome for SGX to reveal its plans for the Quarterly Reporting (QR) framework in Singapore, a Consultation Paper has been issued by the Exchange – worded in a way that seems to leave the decision-making in the hands of the investing public and corporate stakeholders. Some sectors may be comforted that the Consultation has taken into consideration certain options and alternatives which indicate a fine-tuning of the current QR framework, rather than an outright razing of the practice. Perhaps this is in response to the loud detractors of the QR since its inception.

MARKET-CAP CRITERION? YAY OR NAY?

quarterly-report-imageUnless you’re an ice-cream seller, it is near-impossible to please everyone. And I don’t think that SGX is going to find much luck in respect of this Consultation Paper. Some listed companies which hoped to be spared from what they claim to be a burdensome QR regime, citing unnecessary costs of compliance and reporting, will probably continue to gripe about retaining this practice. SGX has also been under pressure with the opinion that the QR regime makes Singapore unattractive to new IPOs. But is this true? Some Singapore companies which have attempted a dual-listing in an Exchange not-far-north have gone through much tighter listing-regulatory regimes and there doesn’t seem to be a lack of other companies trying the same.

One of the suggestions by SGX is to raise the market-cap criterion of listed companies that have to issue Quarterly Financial Statements from S$75 million to S$150 million. This criterion has been perceived as arbitrary and led to the view that this shifts the game towards institutional investors, where the reduction of transparency will further negate interest from retail shareholders and investors.

Although the raised-threshold addresses the reporting burden on smaller companies which may not have the resources for it, these same companies are also more likely to be family-run and do not fare as strongly for investor relations. Some analysts have noted that the Annual Reports of the smaller companies generally lack meaningful disclosure and therefore removing QR for such companies would further negate interest from investors.

Moreover, a “bright-line” criterion based on a market-cap quantum will bring further complications to companies with volatile share prices swinging between a bull and bear market. What if a company’s market-cap were to cross over and under S$150 million between quarters? And what of comparative-period financial information if a company was suddenly hurled above the threshold? Conversely, some minority investors hold the view that more regular information-flow is much needed during a bear-market and the market-cap is shrinking!

A CONSISTENT RISK-BASED APPROACH

Some capital market stakeholders have argued against a blanket-exemption, and for a risked-based approach. It has been suggested that listed companies with poor compliance records, qualified audit opinions, included on the SGX Watchlist etc, should not be exempted. Another suggestion in the SGX Consultation Paper allows minority shareholders to vote every 3 years on whether a Company can opt out of QR. This acknowledges that minority shareholders know best on whether frequent disclosure is important to their investment decisions.

Another critical question to be addressed – is this really about compliance cost? Quarterly financial reports are not required to be audited nor reviewed, and these are often already regularly provided by the Company’s in-house finance team. Most companies will probably have financial systems set up to monitor sales, expenses and receivables on a monthly-basis!

There are also other ongoing Consultation Papers issued by the SGX which indicate a more rigorous compliance regime – especially pertinent is the proposed Listing Rule changes consequential to Code of Corporate Governance review.

Here is my Personal Wish List resulting from this review –

quarterly-report-image

  • The frequency of reporting should not reduce from a quarterly-basis. But the extent of the disclosure should be amended to encourage more transparent information in a simple format.
  • GX RegCo should consider calibrating its approach to queries raised towards the listed companies on their disclosures. Very often, management of listed companies cite SGX-queries as a significant load on their reporting burden.
  • Should the frequency of reporting be reduced (say to half-yearly), the Board and Audit/Risk Committees of listed companies must continue to meet on at least a quarterly basis so as to ensure that business and risk developments are escalated and discussed. Critical developments could then be identified for Continuous Disclosure.

What I really hope to see – is for the QR framework to be enhanced in alignment with Corporate Governance and Continuous Disclosure, so that we address the most critical issues of information asymmetry and market efficiency.

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YOUR POINT OF CONTACT

Ang Lea Lea

Senior Tax Advisor

YOUR POINT OF CONTACT

Chester Leong

Regional Managing Director, BoardRoom Business Solutions

More “Small Companies” will be exempt from audit requirements

More “Small Companies” will be exempt from audit requirements

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YOUR POINT OF CONTACT

Ang Lea Lea

Senior Tax Advisor

YOUR POINT OF CONTACT

Chester Leong

Regional Managing Director, BoardRoom Business Solutions