DIY Bookkeeping for start up companies in Singapore PART 1 of 2

Prepared for incubators and
founders in Singapore,
f d S
May 2012.

BOOKKEEPING
FOR #START-UP
COMPANIES

SPONSORS

www.futurebooks.com.sg

ABOUT US

@futureb00ks


FINANCIAL + JUDICIAL
RESPONSIBILITIES

Incorporation
Company secretarial
p y
Bookkeeping
Annual financial accounts (audited / unaudited)
Company tax computation
Personal income tax computation Download


COMPLETING AN
INCORPORATION

Business name Shareholders
Registered mailing
g g • Individual
address
• Corporate holding
SSIC code
Paid up capital
Directors
Shares
• Local
Company secretary
• Foreigner


#1 BIZFILE

Download


#2 M+AA

Download


#3 SHARE
CERTIFICATE

Download


#4 BOARD OF DIRECTORS
RESOLUTION

Download


LIVE INCORPORATION

http://futurebooks.com.sg/services/company-start-
up/singapore-private-limited-incorporation-form


Search for
‘Singapore
incorporation’
on the App Store.
Store


IPHONE APP

Check availability of
company names
p y

Check URL
availability

Buy incorporation
packages
k


WHO DOES WHAT?

Bookkeeper
Accountant
Tax advisor
Auditor
Company secretary


ROLE OF THE
BOOKKEEPER









ROLE OF THE
ACCOUNTANT / AUDITOR





ROLE OF THE
TAX SPECIALIST





ROLE OF THE
COMPANY SECRETARY

Set the date for an Annual General Meeting
Take minutes and help pass resolutions
pp
File the Annual accounts with ACRA + IRAS
Store documents safely in company registrar folder


ACCOUNTS ARE A
SAUSAGE FACTORY


ACCOUNTS ARE A
SAUSAGE FACTORY

Bookkeeper makes
management accounts

Accountant makes annual
financial accounts
Tax advisor makes the
tax computation

Corporate secretary holds
the AGM and files reports
f p

TIMELINE
Annual financial
f
accounts

Management
Incorporation DIY bookkeeping accounts

MONTHS 0 6 12 18


BUDGET FOR ACCOUNTING
SERVICES YEAR 1

One-time fees Annual fees
Incorporation
p $
$750
Company secretary $700
Annual bookkeeping $3,600
Unaudited annual financial $1,500
accounts
Personal tax $300
TOTAL $750 $5,100


BUDGET FOR ACCOUNTING
SERVICES YEAR 2

Annual fees
Company secretary
p y y $
$700
Annual bookkeeping (inc GST + CPF) $7,200
Unaudited annual financial accounts $2,000
Personal income tax $300
TOTAL $9,900


HIDDEN FEES

Annual fees
Corporate holding
Audited annual financial accounts +$1,000
+$1 000 or S$5million+ in
$ ll
Quarterly GST filing +$1,200 turnover
TOTAL $2,200
S$1million+
in turnover.


#CAAA
C
AASH


ENTREPRENEURS
HATE BOOKKEEPING

I have no
time for it.
I hate it.

I don’t
understand it.

It adds no
value.
It s
It’s for bean
counters
Whatever


AWAKEN THE CFO

Establish a
budget

The money
belongs to the
company

Setup a finance
email address


SETUP A CFO
AVATAR

PEACEFUL AGGRESSIVE


IDENTIFY YOUR
STAKEHOLDERS

Transaction type Stakeholders Risk
Accounts receivable Customers Default on
(AR) payment
Cash payments (Cash) Customers Security
Accounts payable (AP) Suppliers Cashflow
Payroll Staff + Government Penalties and
(IRAS + MOM) staff turnover
GST Government (IRAS) Penalties


ANALYSE TRANSACTIONS
ACROSS 3 BUSINESSES

Consulting business

Restaurant business

App store business


IDENTIFY YOUR
STAKEHOLDERS

Consulting business (B2B)
220
#Cash, 2 TRANSACTIONS

Payroll,
20
GST,
20
AR, Stakeholder:
80 customer

AP (fixed),
50

AP (variable),
50


IDENTIFY YOUR
STAKEHOLDERS

Restaurant business (B2C)
450
Stakeholder: TRANSACTIONS

staff + Govt
Payroll,
Payroll
60 #Cash,
90
Stakeholder:
GST, AR, 10
Govt. 50

AP (fixed), Stakeholder:
50
suppliers
AP (variable),
200


IDENTIFY YOUR
STAKEHOLDERS

App store business (B2C)
GST, 10
1500
TRANSACTIONS
AP (fixed), 30 Payroll,
100 Stakeholder:
staff
AP (variable),
150
AR, 10

#Cash,
1,000


TRANSACTION
COMPARISON

P ll
Payroll

GST App store

Restaurant
AP (fixed)
Consulting
AP (variable)

AR

Cash

0 100 200 300 400 500 600


ESSENCE OF DIY
BOOKKEEPING







AVOID RESCUES

Rescues are performed
when companies don’t
keep regular books.

http://futurebooks.com.sg/services/boo
kkeeping-service/bookkeeping-rescue


SAVE 30% IN
OO
BOOKKEEPING G
FEES BY DOING
S O G
FOUR THINGS

#1 OPEN A CORPORATE
BANK ACCOUNT


#2 OPEN MAIL
WEEKLY

Get comfortable File mail Toss out


#3 PAY SUPPLIERS
MONTHLY

Promote the billing
cycle to stakeholders

Image as a g
g good
Make paymaster
bookkeeping day
sacred


#4 MANAGE PERSONAL
CLAIMS MONTHLY

Download

http://futurebooks.com.sg/blog/5-useful-excel-template-
sites-to-streamline-your-bookkeeping/1329


IMPORTANT
DATES


DO YOU REALLY
NEED TO BUY IT?

Buy items which contribute
directly to revenue

Think twice.


AVOID CHEQUE
PAYMENTS

They are erroneous

They bounce
Th b

They are rejected

They go missing
yg g

Never banked


TREATMENT OF
CHEQUE PAYMENTS

Write once a
W Scan using
S i
Fill in stubs month camera phone

Record cheque #


USE BANK TRANSFERS
OR CARDS

Statements Cannot over draw
your limit


STATEMENTS

Highlight
g g
claims


BANK RECONCILIATION

Tick,
highlight,
hi hli ht
annotate


SETUP QUICKBOOKS
ONLINE

Invoice
I i Expenses
E Snapshots


VALUE RAPIDLY
DIMINISHES
AFTER A SERVICE
IS RENDERED
ROGER DAWSON SECRET OF POWER NEGOTIATION
DAWSON,


POSSESSION
IS NINE-TENTHS
NINE TENTHS
OF THE LAW
A SMART LAWYER


ANTICIPATE RESISTANCE
COLLECTING PAYMENT

Credit checks

Credit control

Credit payments


CREDIT CHECKS

Rating of 5 is
g f
below average.


CREDIT CHECKS

List of creditors
in front of you


CREDIT CHECKS

Company may
p y y
be stressed


CREDIT
PAYMENTS

Outsource
credit risk


CREDIT
PAYMENTS


CREDIT
PAYMENTS

If you have a dog,
why do the barking?


1.5 3%
1.5-3% YOU
CAN HAVE A
DOG DO THE
BARKING

ACCOUNTING FOR
DIRECTORS

Director’s expense Director’s income
claims
• Salary ( y incur
y (may
• Expense claim CPF)
• Loan to the • Director’s fee
company
Shareholder
• Loan to directors
• Dividend


GENERAL
LEDGER

Every transaction
y
in date order


PROFIT + LOSS
STATEMENT

Download


BALANCE SHEET

Download


STATEMENT OF
CHANGES IN EQUITY

Download


FINANCIAL
RATIOS

Computation Notes Keep it simple

Current ratio 23.11 Very healthy result. The company has Higher the better. A
enough cash and accounts receivables
h h d bl score of 1 is poor.
f
to pay off its current debts.

Gross profit ratio 10% Unless the company is going for Higher the better.
volume, this is not a good result. Most
industries do a minimum of 15%. They
may be inflating expenses to buy back
stock.

Accounts receivable 1.48 Accounts receivables are a little high. I Lower the better.
g Download
turnover would be checking receivables older Less than 1 is
than 90 days. excellent.

http://futurebooks.com.sg/blog/6-financial-ratios-every-entrepreneur-should-master/774


COMPLICATED
OPERATIONS

Quarterly GST filing

Monthly CPF


IT IS TIME TO GET A
BOOKKEEPER

Honey, shouldn’t
you delegate that?


VALUE OF TIME

Satisfied customers Dissatisfied customers
wanted $21 reward
d d wanted $60 reward for
d df
for waiting. waiting.

http://www.acrwebsite.org/volumes/display.asp?id=11176


FOCUS ON WHAT
YOU LOVE


INCREASE YOUR
FINANCIAL ACUMEN

Revenue over time and
sales projection
p j

Download

http://futurebooks.com.sg
/services/bookkeeping-
service/bookkeeping-
retainer


INCREASE YOUR
FINANCIAL ACUMEN

Net profit over time
and projection

Download


INCREASE YOUR
FINANCIAL ACUMEN

Score entrepreneurs
performance

Download


METRICS

Cost per
click
li k

Daily Active
Users (DUA)

Cost of
acquisition


INTUIT’S
STORY


QUICKBOOKS
ONLINE

Futurebooks provide
training, customisation
and bookkeeping
services.


STAY IN TOUCH

Email us at or visit
our website.

@futureb00ks


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DIY Bookkeeping for start up companies in Singapore PART 1 of 2

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DIY Bookkeeping for start up companies in Singapore PART 1 of 2