Balancing the intricacies of managing your employees, while ensuring the financial state of your business stays healthy, is no small task for any company operating in Singapore. And though these aspects are the polar opposites of what a business should focus on, they in essence make up two halves to form a whole Singaporean business’ financial matters. The distinct differences between payroll and bookkeeping make it so important to ensure they both operate seamlessly and effortlessly within your company. Balancing both on your own can seem almost impossible, and those who have tried will know that it keeps you occupied for far too long, taking up time that could be invested into other aspects of your company’s growth. Ultimately, these two services place important roles within a company.
Benefits of Payroll Services
An additional benefit of partnering with a trusted payroll company is compliance. All companies must make sure that they adhere to the rules set in place by the government in terms of paying employees as per agreements. However, these regulations can change, leaving business owners struggling to keep up with the variations. Your trusted payroll partner will keep you in check and ensure everything moves like clockwork. In return, you get a failsafe system for all your payroll services due to a keen eye always watching and controlling what needs to be corrected. This provides you with a greater peace of mind, which in turn, can help you focus on the much-needed aspects of the business. Payroll services can also free up your time which allows you to focus on growing your business rather than stress about your HR management. Streams of paid transactions are well-organized and easily tracked so you can control and predict more effectively. With the hours regained from such a business management task, your business can continue to shine and climb the corporate ladder. Explore using the payroll services your area offers and decide whether the investment is right for you.
Like many companies, the demands of running your businesses don’t stop. Payroll mistakes happen. Many business owners do not have the time, energy, or skills to handle the HR portion of business operations. The penalties and extra time spent on handling payroll manually or otherwise usually don’t offer the best bang for your buck, especially if you run a small business with low profit margins and your primary focus is moving forward. Payroll processing can even be more time-consuming when your company decides to forgo investing in a trusted payroll partner to help you streamline and professionalize the process. Conversely, whether big, small, or medium-sized, with the right payroll service provider at your side, human resources management becomes a cinch. Business owners can spend more time securing profits rather than struggling with the tedious task of the payroll.
Accurate Salary Calculation
Some say that all entrepreneurs should focus on the business instead of thinking about things related to payroll, bookkeepers, and so on. However, several entrepreneurs often find it interesting to deal with payroll and bookkeepers who are on their own, although rarely. Special package prices are made to be able to calculate the salary directly, in the form of one as well as bonuses. Is it comfortable in all industries? The most risky thing is when the calculation of this salary is delayed. Several things must be taken into account in payroll calculations, such as taxes on freight, tax withheld, and a detailed report.
The payroll department is totally responsible for calculating the salary of each employee at the end of the month. Regardless of the reason for the delay in salary calculation, this will not greatly satisfy the employee. A specialist in bookkeeping and payroll accounting must be very cautious so that he does not make any mistakes in the salary calculation. The calculation of the accurate salary, tax, bonuses, and taxes is part of the employee’s earnings. Do you know failure to address this will deeply demotivate various staff? Want to know how to be able to impress multiple employees? Want to learn directly about the price of the service? If that happens, merely go straight to the Year End Payroll price for some special offers.
Timely Payment Processing
Our service alleviates both the time track and payment processing problems that small companies face by using tools that allow an easy and transparent transition between these devices and bookkeeping software. One such device is the integrated time clock software. It simplifies staff time entries and automatically exports the data directly to the general ledger for a seamless payroll cycle.
One of the most critical functions of payroll is the securing and processing of employee time records. This data is essential for determining the total labor costs and benefits due at the end of each pay cycle. It also directly affects W-2 calculations. But the quantity of this data may be massive, making it challenging to process. This challenge is exacerbated if a company uses biometrics or electronic work schedules as part of its time tracking systems. Moreover, some small businesses that still use printed time cards that are then manually calculated are faced with the labor-intensive process of reconciling employee physical presence with overtime payments and attendance reports for labor compliance purposes. This inevitably results in a slower payroll cycle.
Compliance with Employment Laws
Engage a competent payroll services provider just to meet the statutory requirements associated with having employees. They should also be able to provide the correct professional advice on varied payroll matters such as: knowing when an employee is required to contribute to CPF, employment of foreign employees including their Work Pass status, different allowances that are not CPF deductible, and contributions and maternity benefits under the CPF Act. Enforcement of various laws depends on the employees reporting such infringement. Like every other crime, the person reporting may have computed gain, and someone who sees another failing to pay his CPF may think it is none of his business. But what if he finds out that his pay is lesser than his colleagues because the company has been subsidizing their portion of CPF? Someone residing in the same division and performing similar responsibility would surely want to know why.
Salaries usually take up the largest share of a company’s expense and can be a significant liability in the form of non-compliance with any one of the numerous employment regulations. Regardless of company size, if an employee is employed under a contract of service, the employer has some mandatory obligations that they must comply with, including the monthly iration, filing of income, and the employer’s share of the contributions to CPF. Other potential liabilities can also arise owing to errors in administering your employees’ leave and salary payments. Over the last 5 years, the Ministry of Manpower has taken action against more than 1,700 employers for failing to pay employees and other employment-related breaches.
Advantages of Bookkeeping Services
In bookkeeping, there is an orderly recording of all financial invoices, opinions, and every statement of revenue (sales) and expenses (purchases). The more complex the company, the more detailed the documentation of its processes. Besides being helpful in thoroughly reviewing the company’s transactions, bookkeeping is advantageous in the preparation of the annual financial statement. Larger equity holders (lenders and shareholders) are concerned with the progress of their investments. Based on that information, they attempt to intervene in the company’s activities if it is necessary to discuss the need for changes to the operations, cost cutting, or item pricing. A business that does not have documented financial transactions is on a collision course with legal obligations and the risk of sanctions by the tax authority and other government bodies.
Bookkeeping is the process of systematically recording the financial transactions of an organization so that the ministry can quickly determine the true state of its finances. Should an error be detected, bookkeeping enables a detailed review of each of the ministry’s elements and processes in order to determine the root source(s) of that error. In addition, the information recorded by the bookkeeper can be used later to produce financial statements; these may be required by lenders, shareholders, or investors. Small business owners often skip this stage, believing that their company will not benefit from it. In fact, the exact opposite is true; only a meticulously inventoried collage of financial transactions will reveal whether you are operating a profitable business or one that is losing money.
Organized Financial Records
Organized financial records make it easier to produce your financial statements, thereby reducing the amount of data entry required by SMCCI Member Profile provided by Xero, where larger amounts of data increase the chance for errors. In addition, well-maintained financial records allow you to analyze the financial health of your company. With less time working on your records, you get to identify ways to reduce your cost and optimize your funds. A primary advantage an employer stands to gain from accurate and timely payroll preparation and reporting is that it provides both the employer and their employees with the same information, thereby preventing any chances of employees disputing the information. We live in an era where everything is documented, and employees can easily access basic payroll details legally, and any discrepancies might lead to distrust in employers.
In delivering payroll services, financial advisors and other payroll service providers usually work to a routine payroll checklist to ensure methodical processing of clients’ payroll data. For those providing it, payroll & bookkeeping services also follow a structured approach, and both sets of services entail frequent processing and generation of numerous financial transactions. With 28% of businesses with under 50 employees under the non-compliance trap and having to pay penalties of close to 50% as high as those of more than 1,000-employee businesses in the recent tax-reporting periods revelation by the Inland Revenue Authority of Singapore, coupled with findings by Xero that greater financial understanding translates into better business decisions, Singapore-based businesses, and possibly those elsewhere, clearly require both payroll and bookkeeping services to be provided. As in the Raymond Chabot Grant Thornton study, demand is just at 25% for payroll and 26% for bookkeeping.
Efficient Expense Tracking
Digitalisation of accounting and bookkeeping, whether through the use of cloud-based systems or software built specifically for certain purposes, has helped to automate many of the processes, including expense tracking. Time saved on manual operations and the avoidance of errors mean better focus and more efficiency in business operations, including sales and revenue-generating activities. In Singapore, an automated expense tracking system also directly promotes compliance, especially concerning goods and services tax. This is especially true for business travellers, as failure to submit adequate information on their expense reports could lead to challenges and delays in recovering their input tax, as well as the associated penalties and interest being imposed by the tax authority.
Another benefit of the synergy between payroll and bookkeeping services is efficient expense tracking. Whether for financial management or tax planning, keeping track of business expenses is crucial. It makes budgeting much easier, and it also leads to a higher possibility of expense recovery. The usefulness of expense tracking comes from the data that’s gathered in the process. With proper tracking and management of expenses, the overuse of cash reserves can be reduced. Further, there are additional savings from the old practice of accumulating expense receipts.
The Synergy of Payroll and Bookkeeping Services
By combining the two services, Singaporean companies can also look forward to the time saved on account reconciliation between bank statements, receipts, and payroll reports. They can finally shed the chains of onerous paperwork (and often space for filing) and focus on the benefits of the digital age, which comes with both payroll and bookkeeping software. The lesser consideration being that time is money, as we shall see in the next section with respect to streamlined communication. Larger businesses practicing the ‘division of labor’ may not necessarily see the time benefit of paying for a combined bookkeeping payroll service. However, earners in the low to middle class will certainly retire earlier if they knew that the opportunity cost of breaking up services was a potential promotion down the line.
The fact that global professionals combine payroll and bookkeeping services for cost savings is well documented. Given the high cost of living and other Singaporean factors such as mandatory employee benefits, rising rental costs, more frequent need for performance-based rewards and remuneration packages, Singaporean companies benefit from labor cost savings as well. There are also the savings from server space, depending on whether businesses choose payroll services in the Cloud or stand-alone software. Furthermore, based on the Singaporean rate for standalone Payroll Services, the cost of hiring separate bookkeepers could double that again. Cost savings also present themselves in the time spent on file transfer between the bookkeeping and payroll departments. What’s the point of timely payroll services if the payroll data finds itself lost in the uncharted territory known as a file transfer?
By combining payroll and bookkeeping services into one company, the focus for the end customer shifts from managing a supplementary operational aspect to a strategic one. The former lends more towards the task and the mundane, the latter towards an aspect that could potentially make or break a business. Payroll services focus on a company’s financial state, which no one can afford to lose track of, even in the hustle and bustle of everyday activities. Why else would companies have Payroll Departments? Bookkeeping services, on the other hand, can offer insight on this financial state and how to improve it. Simply put, by combining payroll and bookkeeping, businesses are able to break free of puny concerns and focus on the big picture.
Seamless Integration of Financial Data
Firstly, providers sell calculated payroll values, figures that are not subject to financial scrutiny, rather than selling the software and allowing businesses to calculate payroll values in-house. The end user has just as much involvement in the complicated world of payroll tax in this instance as in-house calculation under any other system. It is also not clear that providers are within their rights to calculate payroll values rather than providing payroll calculation assistance to businesses or the basis for those calculated payroll values to treaty processed. So, the provision of prepaid payroll services, which might be the most popular payroll model, would appear to fall foul of the Migration Act 1958. Secondly, providers lard their payroll calculated values with fees for, say, year-end reporting to the tax office. This adds to the expense for the small business.
Companies that have employees cannot hope to avoid bookkeeping altogether – payroll, expenses, and employee CPF (preserving) must appear in the books. It is therefore an ideal setting for a seamless integration of data between an external accounting firm (the integrator) and a business. For example, an accounting firm faces the problem of correctly splitting such expenses into the account balances of the employees and recognizing the goods and services tax (GST) component of each expense. The business provides account balances as of 30 June and some color around why an expense has an ambiguous GST treatment (a company that has contracts with no prescribed form no longer needs to provide a breakdown of expenses for GST purposes – a voluntary practice). Employee-related expenses are subsequently split accordingly, and the GST is treated appropriately when the business’s annual financial statements are being processed.
Enhanced Financial Reporting
The financial department currently holds a trove of business data reams. Again, your management team is freed up if you partner with bookkeeping and payroll services. They are already smart cookies and know where to extract these details. It also helps to zero in on the precise focus on financial reliability and business practicability constantly upon services. In conclusion, payroll and bookkeeping services that join forces facilitate full transparency in the financial state of your company, which will spill over into the quality of the business. Business operations, including hiring, promotions, and even internal job transfers, can be proposed to workforce liquidity.
More frequent financial reporting translates to better business results. Spurred to act as corporate culture shapes business behaviors, carefully monitoring finances precipitates a better future. When price movements loom, frequent, accurate financial statements play a much-needed host for smart, sound financial advice. For instance, there is an ample opportunity for profit as companies generate the highest profit in more than two decades. The use of payroll and bookkeeping services may foster better accountability because, as expenses are scrutinized, prudence and entrepreneurial spirit dodge a critical eye for business execution at this stage of corporate oversight.
Streamlined Tax Filing
The other area where the payroll and bookkeeping team works together is the merchandiser compensation. Based on their agreement, the merchandiser will be paid a minimum amount of fees in advance to harvest as much revenue as possible for the selling company. The achievement of gross sales targets can form the basis for additional bonuses, thus completing the commission structure of the traders. A full-service accounting package that promotes real-time analysis can share this vital sales information. Estimating future performance and relating earned revenues to the amount paid can help managers make decisions in this highly risky environment. These earned earnings can then be accurately identified, recorded and communicated to payroll to adjust the overall incentive payments made to the employee. Early identification and management of various compensation plans will help in the company’s tax planning – clinics are taxed as a resident for their profits. With the additional benefits of prudent tax optimization, their income may be low, which may improve their corporate tax position.
In a similar way that payroll data can be a source of accounting information, financial data can provide payroll functions. Expenses such as sales-based commission and bonuses are directly tied to corporate performance and form one part of the payroll expense. By having financial information updated on a regular basis, financial data related to these incentive programs would be available to build on the payroll information, enhancing business decision making. Day-to-day data entry would also be part of a full-service bookkeeping package. This is necessary for the timely management and payment of employee claims – talent and cash-sensitive prices are retained.
