Singapore has been ranked as the 10th startup ecosystem in the world. For every 5,200 startups, 42,000 are in the tech industry. Unfortunately, like many startups worldwide, many entrepreneurs experience difficulties in the first three years. It is during this period that 30% of startups fail and close shop. The main challenge faced by business owners is inadequate and poor management of resources. With the support of Prelude, you will have a clear understanding of how your business is performing from the beginning.
Proper management of resources
Many startups do not fail because the concept was poor or the market was inadequate. Sometimes, the problem is the absence of an accounting system. Every penny needs to be accounted for from the moment the business starts spending or earning revenue. The capital needs to be recorded so that the real investment is measured against actual income.
Unfortunately, many startups seek accounting services too late. By the time a certified accountant comes in to prepare records, most of the required information is missing. It is easy to lose data on money spent if proper records are not kept.
It is easy to keep track of how money is spent
A proper accounting system is supposed to balance. Many business owners forget what they spent some of the investment on, especially when records were not kept. All investment records need to be preserved so that a proper analysis of the health of the business is carried out. It is easier to change strategies early if investments are seen not to be yielding returns. For example, if a marketing strategy is taking more money out of the business that it is bringing in, it is essential to change things before it uses all the finances of the business.
Helps in the development of a business model that works
Large corporations have had to change their business model regularly. Innovation is an essential part of business management. An excellent accounting system will help in the shaping of the company’s future endeavors. Consumer behaviors change over time, and it is essential for businesses providing services to adjust based on the trends. Having an accounting system that works ensures the company retains a portion of the profits for future investments.
Accurate tax remittances
Every company is required to meet its tax obligations. How much the company remits is determined by the profits made. Unfortunately, without the necessary information, it is difficult for businesses to keep track of how much they should remit. In case of an audit, a company that does not have all the supporting receipts may be penalized due to the absence of records. It is easier to dispute any tax liabilities if the appropriate supporting documents are available.
No business can escape the value offered by accounting systems. The profit and loss accounts are critical for any decisions business owners take. Even if a company seems to be doing well, poor management of resources sinks it to the ground. Having an accounting system will help safeguard the business.