Bookkeeping service refers to the service where bookkeeper records financial transactions according to double entry concept and classifies the transactions into purchases, sales, debtors, creditors, receipts, payments, assets and liabilities. It forms the initial stage of the whole accounting service and lays the foundation for other related services.
Double entry concept of bookkeeping means that there is a debit (left side) and a credit (right side) for each financial transaction in the account. Every transaction would have an effect on the left side and a similar effect on the right side resulting in an equal amount entered in each side (i.e. equal and opposite effect is recorded when there is a transaction). This means that the amount at the left side must always equal to the right side (i.e. debit = credit so that the accounts are balanced). As such, the total of all debit (left side) accounts will always be the same as the total of all credit (right side) accounts. This ensures the relationship of Assets (Debit) = Liabilities (Credit) + Equity (Credit) + Profits (Credit) is maintained. This practice requires the bookkeeper to enter a financial transaction twice – at the Debit and Credit side – which creates a self-checking mechanism and reduces the chances of error. If one side is entered incorrectly, the relationship or equation above will not be maintained. For example, if you buy goods with $400 cash, you would Debit Purchases with $400 and Credit Cash with $400. Similarly, if you sell goods for cash, you would Debit Cash and Credit Sales. Debit is denoted with “DR” and Credit is denoted with “CR” in the accounts.
Double Entry Principle
The following financial transactions would increase the Debit side for bookkeeping:
- Increase assets
- Increase expense
- Decrease liability
- Decrease income
- Decrease equity
The following financial transactions would increase the Credit side for bookkeeping:
- Decrease in assets
- Decrease in expense
- Increase in liability
- Increase in income
- Increase in equity
Bookkeeping work is gradually taken over by machines or computers where financial transactions are recorded digitally at source via ERP Software. For example, sales are capture at source when the bar code is scanned. Receipt is captured at source when payment is made via credit cards or Nets.
Our duty is to ensure financial transactions are recorded properly and in accordance with accounting principles. We approach bookkeeping and accounting services systematically and logically. It is our way to provide you with a peace of mind when there is any financial audit to be conducted.
With technological advancement, accounting software becomes a critical part of the bookkeeper. It automates many functions and integrate with information of other department for the purpose of financial analysis. It becomes an indispensable part of the accounting cycle.
Complying to accounting rules is just one part of the whole compliance process. Tax rules is another part which a business has to pay special attention. Our tax service would ensure that you comply with corporate tax, personal tax, withholding tax and goods & services tax rules in addition to accounting rules.
Besides tax, Companies Act and ACRA's regulation is another area which companies need to ensure compliance. We are a qualified filing agent under ACRA and have qualified individuals to assist you in complying with ACRA's regulation and Companies Act. Call us now for business & company registration and corporate secretarial service.
Payroll service ensures that you have paid and recorded the correct remuneration for accurate reporting of payroll cost of the employer and taxable payroll income of the employee.