Benefits of Combined Payroll and Bookkeeping Services
Studies estimate that SMEs are likely to oversee a 15% long-term cost when outsourcing payroll & bookkeeping services as a combined service. Aside from cost, there are many other benefits associated with combining payroll and bookkeeping services compared with multiple vendors managing these business-critical administrative functions, as described below. With the ongoing pandemic and changes in the business landscape, SME companies, which are the majority of companies in Singapore, are encouraged to focus on cost savings to the company. Unifying the payroll or bookkeeping service sections can avoid unnecessary duplications of work. For example, the process of inputting payroll liabilities into your accounting software can avoid adjustments (after payroll is generated) since everything was processed at the same time by the same person or team (payroll compensation and accrued expenses).
While many companies can see the great benefits of outsourcing either payroll or bookkeeping, many are not aware of the additional benefits of combining both services. This is something that many small and medium-sized enterprises can do, considering the increasing range of all-in-one service packages designed to streamline business processes. Collaboration between the payroll team and the bookkeeping team is crucial to provide accurate and timely payroll processing, statutory filings, and financial records (books). Many SMEs have separate bookkeeping and payroll services that do not currently offer integrated services.
Overview of Payroll and Bookkeeping in Singapore
Bookkeeping services: All businesses operating in Singapore must prepare and present their financial records. Keeping records is very important for companies. Record defaults result in a fine of between $300 and $5,000 per court order, and individuals failing to operate will be required to pay a fine of $300 to $3,000 or serve six months in prison. Business accounts are a combination of internal and external transactions, including: sales and purchase invoices, applies to agency distributions and bills, deposits and withdrawals from bank accounts, general expenses or cost vouchers, depreciation, and assets continue to be created, monitoring of accounts.
Payroll: Singapore employers are responsible for deducting Central Provident Fund (CPF) contributions from their employees’ monthly wages and paying employers’ CPF contributions to an employee’s ordinary wages every month. As CPF obligations are fulfilled online, the easiest and most effective way to meet employers’ CPF obligations is to set up a ‘SingPass’ account either on the CPF Board website or at the CPF Board or participating banks. CPF contributions include Ordinary Wage (W), Additional Wage (W1), and Additional Wage (W2) defined by EC or supplemental agreement or workforce administration.
Streamlining Payroll Processes
A company must not review its company payroll service each time there is a new employee or a staff with a change in salary. The use of a fully integrated payroll system that syncs with the general ledger, hence no manual payroll postings, can actually save time for human errors. Linking software also allows the use of various management reports to reduce the company’s workforce. Staff can be more efficiently deployed when companies are issued with a weekly manpower report. Budgeting on overheads and salary expenses becomes more accurate when monthly salary, monthly overheads, long-term benefits such as accumulated leave payout, client termination benefits, are set up and produced with a rollover to budget or new year with ease.
One of the key points of combining payroll & bookkeeping services is the ability to link payroll and bookkeeping software, as well as the capability to retrench employees or change salary through the same system. The timely retrieval of information can make efficient decision making. This has become a pertinent demand when a client has multiple employees and a high frequency of payroll runs. The software’s capability to handle the requisite complexity must be able to describe in detail the role of an employee, signaling if a person has decided to retire, indicating the years of service, calculating the benefits of a long-term employee based on the system and policy set up, etc. One of the key reasons is also to maintain a level of system access security.
Automating Payroll Calculations
It is evident that most businesses either outsource their payroll function to bookkeepers or payroll services in order to avoid the time and understanding which is required in keeping up with all of the necessary statutory compliance requirements. Such a system allows productivity to be maximized based on “empowering” your employees with the needed resources to do what they are hired to do. Having an automated process in place would also result in significant cost savings in the long run.
Automating payroll calculations. It goes without saying that calculations need to be performed systematically, such that there are no errors in the process. By connecting your payroll function to your company’s time and attendance system, individual salaries and statutory payments are calculated seamlessly. The system you are using will always take into consideration the latest updates on allowable deductions and consents, etc., without the need for constant manual checking. Staff are paid on time, every time they expect to receive their salaries, and there would be no headaches or multiple disruptions involved in speeding up a process that is usually faced at the end of each month!
Ensuring Accurate Employee Compensation
One of the most important procedures for having a payroll service is the distribution of all your statutory duties, such as CPF, SDL, and EIS. You are very focused to ensure that all the qualifying criteria and information are taken in the application. For example, you must ensure that you have submitted all their medical leaves for your workers. If the government boards should refuse to accept your request to collect their fees from you, it is against the rule to transact straight with your employees. A certified HR organization may have an application to distribute this to the relevant government boards to ensure that you comply with the business act. You might think of saying that all of them might be checked/monitored on CPF’s website. However, it’s not feasible. Similar challenges, especially when errors arise because details were not rectified soon or, God forbid, brought to the worker, would stop or delay bank processing wages. In the worst-case situation, the problem lands on the desk or the door of the cops.
The most common service that payroll companies provide is managing the payroll of your employees. To start with, a payroll company will need all employee and compensation details such as the employee’s allowances (such as shift, meal, and travel allowances) and any deductions the employee has undergone (such as from his medical leave). It may be a complex procedure to keep track of these details, but it is necessary. When you appoint a payroll provider, and this is done for you, you don’t have to go through the maze of producing the payslip for your employees. Tech can also be made available to promote quick creation and change of payroll data that will also reduce stress associated with manual computation.
Compliance with Singapore Payroll Regulations
Furthermore, employees with age 55 and below are also subjected to a wage ceiling threshold. If their monthly wage permits, the ceiling functionality limits their employee’s CPF contribution according to the table.
Employers are also mandated to accept the CPF contributions and deduct the employee’s CPF contributions according to three specific thresholds: the age of 60 and below, employees earning more than S$750; second, age between 50 and 60 and TPM (S$750) S$4,500 regardless of the earnings. The data specifies the CPF pay intention withholding for Singapore employers based on the Medical, Special, Venture, and Regular Accounts specific thresholds according to the table.
Further, employers must keep written records that specify all overtime work hours. Employers with non-Singapore employees earning less than S$1,500 are exempted from overtime and work-related regulations. Overtime work hours must be in front of the employees during work hours and within their pay discussions. Singapore employees are entitled to Gross Salary (OTW) x 1.5.
To begin, the Singapore Employment Act stipulates payroll requirements should they hire employees to work according to Part IV of the Act. Employers need to maintain a written record specifying the employee’s full name, residential address, and basic salary, including the date of assessment. Employers must keep these records for at least two years from the period they were created.
While maintaining accurate payroll records is essential for compliance, fulfilling specific Singapore payroll regulations is equally important. Some of the specific Singapore payroll regulations that businesses must observe include following the Employment Act, accepting the CPF contribution, and deducting the employee’s CPF contribution according to specific thresholds, submitting timely IR8A Forms, and the Wage Credit Scheme (WCS).
Integrating Bookkeeping and Payroll Systems
There are many circumstances when businesses should consider outsourcing their payroll processing. A combination of bookkeeping and payroll processing provided by an outsourcing company creates yet another level of convenience and efficiency. After all, business owners desire the most successful overall business strategy. Business owners, especially those just starting up and establishing themselves in their industry, may consider how difficult it may be to keep a proper balance between processing their payroll efficiently and on time, with the daily, weekly, monthly, and quarterly demands of keeping their books as accurate as possible.
By integrating these all-important services through a payroll outsourcing company, all business information required at a glance, allowing for streamlined payroll preparation and other specific advantages. Payroll outsourcing companies can perform these duties in a much more efficient and professional manner, ensuring business compliance with labor laws and tax regulations.
At some point in time, many small business owners have attempted to cut down on their payroll processing costs by taking payroll services in-house using do-it-yourself accounting programs. The problem here is that the information required for payroll comes from all areas of the business, and if the bookkeeping or accounting side is not being managed simultaneously (and managed well), efficiency levels simply will not be there. However, the opposite is also true. Keeping payroll and bookkeeping systems separate simply multiplies the chance for costly mistakes in either or both, which can lead to legal penalties in the case of payroll processing, back taxes and fines from various governing bodies, or costly overpayments due to bookkeeping errors that can seriously impede or destroy business growth.
Centralizing Financial Data
Centralizing Financial Data: The first integration is to simplify the workforce admin, the second for accounting. As payroll is one of a small business’s most essential administrative tasks, a basic payroll system is already in place. Most small business owners use OdaPay as an independent software, and some HR and accounting systems provide their own add-on payroll programs. The cost of this consolidation is less costly than I imagined. ADP Unipac uses an expensive, high-scoring Suffolk system, but other providers have costs starting at $10 and up, plus a low per-employee fee, subject to markup if our employees are based outside the U.S. In due course, the employees themselves can save paper and time because many suppliers provide self-service options. Payroll can be handled more simply when it is handled in just one location.
The issue with managing separate payroll and bookkeeping services is that the financial flow itself is bipolar. The effect is that data relevant for payroll and bookkeeping might be recorded twice every month. This is inefficient and costly, especially when the work expands and accounting requires in-depth consistency. Centralizing financial data, with bookkeeping and payroll integrations, is considered a great workout when the time and expenses are supported and spent wisely.
Enhancing Financial Reporting
It is no doubt that accurate and timely reports are a requirement that businesses should aim at. Looking at how critically large enterprises take their financial reports and how the stocks of the publicly listed companies are affected, it is unnecessary to pressure small and medium-sized firms with the demand for more accurate and timely reports. There is a clear risk to be addressed through professional reporting. Owing tax reporting and internal financial decisions without proper financial reporting is like driving a car blindfolded in a dark night. When it comes to the business financial transaction, tax reporting is a must. Even during the occurrence of unusual events such as disasters and political or social unrest, the tax reports still must be filed with combined payroll and other financial transactions. In fact, better reporting allows visibility that can drive better decisions.
Every business person is keen on enhancing their company’s financial performance. However, not all are knowledgeable about how to achieve that. Outsourcing financial reporting services is becoming a trend as companies are beginning to see the benefits associated with it. Expert reporting is what every company craving for growth needs. Considering that time and financial resources are scarce commodities that need continuous effort in making sure that they are effectively utilized, it is important to consider hiring a team that will help with timely and accurate reporting. While it is easy to create payroll using several online tools, this financial reporting support complex solutions may not offer guidance and support. It is therefore important to look at the benefit of combined payroll and bookkeeping services and understand how the entire finance of your business can be taken care of and how that will translate into profit maximization.
Simplifying Taxation and Auditing Processes
Frantics over accounting processes are deeply entrenched, but this really shouldn’t be the case. With proper bookkeeping, tax preparation and filing are a walk in the park. To many, though, bookkeeping can be dreaded. Fifty-six percent of SME owners, for example, spend hours each day in bookkeeping and accounting processes to make sure their work is error-free, initially taking anywhere from 3-hour intervals. With cloud-based payroll or bookkeeping service Singapore, however, at least 1 week’s worth of work can be saved annually. More so, with combined payroll and bookkeeping services in Singapore, incorporation firms are able to provide these more easily and in more efficient timeframes.
Users requesting combined payroll and bookkeeping services in Singapore have probably heard one common complaint – the taxation and accounting landscape is not user-friendly. In fact, over 98% of SMEs consider it tedious and overwhelming to file their corporate taxes and meet regulatory requirements. The challenges to ensuring compliance, therefore, are not just due to SME owners lacking understanding but also due to the reluctance to seek help. With combined payroll and bookkeeping services in Singapore, though, these users are able to gain access to simplified and streamlined tax preparation and auditing services. It is easier than ever to overcome annual tax and compliance jitters.
Improving Data Security and Confidentiality
It is important to note, however, that for higher-level fraud risks, control owners’ identification and documentation can ultimately be difficult and time-consuming. Reduced administrative costs, heightened efficiencies, and enhancement in data security and confidentiality through the use of combined bookkeeping and payroll services can yield competitive advantages and cost savings. Specialized bookkeeping service providers typically cater to multiple clients, benchmarking employee compensation across a variety of industries and verticals, including the client’s specific industry. Employees are more likely to be content with not only what appears to be fair compensation but also incentives in the form of potential career advancement and the opportunity to work on state-of-the-art accounting and bookkeeping technology. This leads to more satisfied, motivated, and loyal staff members who are more productive and work more effectively, producing financial information that provides accurate and consumable insights for management and stakeholders.
With a single point of contact looking after both functions, accounting can more directly control who in the organization has access to sensitive reports and data, resulting in improved security and confidentiality. Auditors are assured of confidentiality in using the company’s own employees as they already understand the client’s industry, business, and systems, promoting a forthright relationship with. In addition, specialized bookkeeping firms have strict family rules to prevent fraud or concealment. Hence, they do not have the user rights to approve payment, which creates a system of checks and balances.
Choosing the Right Payroll and Bookkeeping Service Provider
It is essential to pay attention and evaluate information for payroll and bookkeeping service provider’s performance to be sure and could explain it as part of the company’s daily economic activity. Hiring professional payroll service providers can contribute to risky activities, resulting in strong financial controls, financial reporting services, and consistency in practice. The best part of hiring an expert payroll and bookkeeping service provider is that these co-workers can do their tasks as reliably and efficiently as possible, while you or other key workers could focus energy and time on other company core products. There are benefits to hiring an expert payroll and bookkeeping service provider, as the high level of competence would leave you secure and not needing to deal with the drawbacks of an in-house professional.
Having payroll and bookkeeping services will help your company maintain the company’s efficiency indicators running and also ensure a smooth daily financial transaction process. These key features can be harnessed to ensure the effective implementation of complex operational tasks. Other than increased technological sophistication, high-quality financial statements are crucial to ensuring company sustainability. But to get the efficiency and advantages from those services, your company needs an explanation to yield to a reliable service provider.
Evaluating Service Offerings and Features
It also highlights the performance and efficiency-related metrics of their financial services in Singapore for business account holders and shows the cost differences of features offered in the services of the payroll and bookkeeping combinations. To understand what really counts in advantages over standalone or bookkeeping services that can help overcome opposed reservations, we empirically investigate its impact on business functions, shape technological readiness and propensity to use and adopt service aspects. Finally, inside the effects of client software cost differences, including free payroll direct deposits and future charges, estimate the amount of savings that both payroll accumulators and the serviceman clients can make and add the benefits of combining their bookkeeping services. The highly path at which both combined and standalone reporters with technology preparedness is effective in driving banking service adoption in Singapore is expatriating and due to the strong uptake rate of most domestically rooted companies.
Payroll and bookkeeping need to be functionally sufficient yet affordable for both big and small businesses. Understanding the features and services, capped at both low cost and smoother operational experience, given for fixed reasonable constraints can help eliminate tedious and resource-intensive processes such as billings, payment banking gateways, and payment in different modes and different accounts. As the accounting system maintains up-to-date accounts, accounting books prepare add-ons and everything provided for viewing and accessing.
Considering Pricing and Cost-Effectiveness
As it was mentioned in the previous section, hiring a third-party personal business advisor might be a financially beneficial decision primarily because a business owner will be able to allocate the role of his company’s CEO to this person, focusing his own attention on issues that matter to him more. Payroll is one of the processes that require personalized attention, especially when it is conducted for a small business. A business owner is the one who knows about every little issue that a company might face. The combined services of bookkeeping and payroll can significantly benefit a small company, primarily because they can finalize the company’s salaries, investing as little as 3-4 hours. Moreover, combining two services can significantly slash down the joint payment for both. Of course, if you require only payroll functions for a company with 3 professionals and everyone’s receiving a golden parachute kind of benefit, the price would be different from the price in the scenario, in which a two-person business owner makes a monthly salary.
Pricing is one of the key factors that businesses typically consider when it comes to outsourcing their bookkeeping functions and handling payroll separately. However, things might not be as straightforward as they appear to be. One of the biggest advantages that businesses enjoy from outsourcing their bookkeeping services in Singapore is affordability. However, when it is considered separately from another part of the business, which requires a similar level of attention to be provided, the same service might appear a bit expensive. If a business decides to separate its bookkeeping and payroll functions and outsource them to 2 different companies, it will need to deal with two fees.
Assessing Provider’s Reputation and Experience
Evaluate administration metrics: Before engaging the provider, do more study on its governance and management aspects. A service provider’s board of directors and senior executives must be people with the capacity and character to help promote the company’s success and shift attention away from decorative efficiency. They must be independent, operationally active, and have access to company service performance reports and finances. These metrics will help to establish transparency and ensure that the service provider is professionally focused on customer satisfaction. Opt for customer-oriented service providers versus those who are less diligent. Service providers that embrace a culture founded on the core business principle that is responsible business practices and controlled financial accounting disclosures are vital. This is a key management trait that needs to be evaluated since administration and corporate executives guide company operations for long-term, inspiring growth in client service lifeline. Such customer-oriented service providers may likely outshine other providers who prioritize functional operational efficiencies over customer satisfaction. In turn, better lifeline service may adapt better to customer needs, concerns, and support services for a better customer service experience.
Reputation provides foreseeable business expectations. Positive reviews reflect high levels of satisfaction and reliability from clients. Prospective clients should strive to engage service providers with a reputation for exceeding customers’ expectations. No business would be too willing to listen to or deal with highly unsatisfied clients. Always go for a qualified and reputable provider with the most positive customer reviews to make sure that you are also likely to receive a better or equal service quality. Years in the industry can often give insight into business experience and stability. Beware of employing service providers who seem to have just jumped into the industry or have been in business for less than five years. A more extended industry residency is a pointer of the provider’s business know-how and satisfaction rate whereby satisfied customers are likely to stay longer with the provider.
