In recent years, many fresh graduates and office workers start entrepreneurship journey with their own knowledge and years of experience. But on the journey, frustrations are indispensable. You don’t just need business’ knowledge, but you also need an accounting report to support your business! As an entrepreneur, if you don’t have a proper accounting report, what problems will you face?
As an entrepreneur, you need to play multiple roles in a company such as admin, sales, accounting, payroll and more. This means that you need to handle everything for the company, at the same time it also increases the possibility of mistakes will happen. Secondly, you have no time to update the accounting record and also no time to keep up with the accounting standard changes or tax changes. For example, three years ago, the government implemented GST, but last year, the government implemented SST. The changes are much faster than entrepreneurs to update!
When you don’t have a complete accounting report, you will face these problems:
- No Visibility On Cash Position
Did you faced these problems: You have good sales, but the cash keep running out? Or you have decease the unnecessary cost, but there always have not enough cash? You have no idea where the money goes. This mostly because you don’t have a proper accounting record to record down the profit and expenses. For example, you might have overpaid for supplies or you forget to collect due from your customer. These will result in you having a tight cash flow!
- Fraud by Employee
Without a proper accounting record, it has a high chance that fraud happen to your company. Your employee might be claiming things that you are not aware and you have no record to keep track of things.
- Non-compliance with Tax Law
In order to do tax return, you need to have proper accounting record to do tax computation. Without it, you might be overpaid or under pay the tax and it may result in getting fine from the government.
- Unable to Obtain Loan
Most of the bank require companies to have proper accounting record for asking financing to company.
- Hard to Look for Investor
If you are looking for investors to join company or some investor interest to invest. Without a proper accounting records, they may turn away.
- Unable to Analyse Company Performance
This can cause the company to miss the opportunity to pursue, and it will be slowly kick out by market.
As a smart entrepreneur, you need to have a proper accounting record to expand your business. With an accounting record, everything is OK!