Singapore is one of the best countries in the world to establish a business. Not only due to its strategic location, but the government has also established a very business-friendly regulation that can help both local and international businesses thrive in Lion City.
One of the best businesses to open in Singapore is a service-based company. Service-based businesses are poised to thrive in the Singaporean market due to these 3 ultimate factors, which are;
- Urban Lifestyle: Singaporeans lead busy lives in the urban environment, creating a demand for various services that cater to convenience, efficiency, and time-saving.
- Diverse Demographics: A multicultural society with expatriates and locals creates a diverse customer base, leading to a demand for a wide range of specialized services.
- High Disposable Income: The country’s high per capita income allows Singaporeans to afford and seek premium service experiences, creating opportunities for upscale service providers.
Singapore’s affluent population creates a favorable environment for service-based businesses to flourish in the country.
What Is A Service Business?
A service-based business represents an establishment formed by individuals or groups with a primary focus on delivering services. Service-based companies leverage their workforce to offer services to clientele within the realm of service-related activities.
Some service enterprises may need to invest in costly equipment like vehicles to furnish services, while others place greater emphasis on human resources and maintain minimal assets.
To conclude, a service company is defined as a venture that vends intangible products, addressing people’s requirements without a concrete physical presence. Examples of service enterprises encompass tasks such as law firm, yard maintenance, residential cleaning, goods couriering, food delivery, online transportation, and laundry services.
Given the absence of tangible products, service-based businesses do not engage in the conventional buying and selling of goods. Their revenue solely derives from the services rendered.
How Bookkeeping Works In Service Businesses?
Just like any type of business, services-based businesses need to ensure that they maintain the financial aspect of the business to thrive and can make a profit. Because service companies don’t sell products, they don’t usually keep inventory on their balance sheets because they don’t need to deal with tracking goods after sales.
The distinction lies in the simplified accounting procedures for service companies compared to retailers’ businesses, as they do not involve inventory tracking or calculating the costs of goods sold.
Conversely, service-based business income transactions primarily revolve around documenting revenue received or obtained. For example, an attorney invoicing a client for services rendered would record the transaction by debiting accounts receivable and crediting service income. Once the payment is received, the attorney would debit the cash account and credit accounts receivable.
Service-based companies will also need to track outstanding payments from clients. They need to record incoming payments, create reports, and send reminders for overdue invoices. Utilizing an efficient invoice maker can streamline this process, allowing businesses to automate invoice creation, track payments, generate reports, and send timely reminders for overdue payments.
Accounting plays a crucial role in managing the financial aspects of service-based businesses. And Indeed, the accounting system employed by service companies differs from that of product-based enterprises. This is due to the distinct application of accounting cycles between service and trading businesses.
If you are not confident to take on bookkeeping of the company’s financial record by yourself, you can instead opt to hire professional accounting services in Singapore to help you create concise financial statements. They will take a lot of stress out of you because you no longer have to manage bookkeeping and cash flow by yourself.
Do keep in mind that though Singapore has one of the best business-friendly regulations; if you fail to produce a concise financial statement – you may get a fine as a result. Thus avoid this cost, and hire a professional instead!