How Book-Keeping Services Are Done In Singapore (2023)

Many companies all over the world prefer to open one branch in Singapore as this is a very business-friendly country in the Asia-pacific region. To register any business in Singapore is not too difficult a task. Also, there are few agencies available that can offer all kinds of support for incorporating your company in Singapore.

After you have successfully registered your Singapore Company with ACRA and after incorporating the company, the next thing that you would like to do is focus on your business operations. At the end of the day, it is your business operations that will drive in the profits for your company. You will not want unnecessary interruptions to your business operations.

Irrespective of the size of your business, it is very important that you must have a certain sound financial management in place to sustain your business. One of the essential building blocks for keeping your business financially sound is by implementing a perfect bookkeeping process.

It has generally been observed that many business companies often concentrate more on the nitty-gritty of their business and neglect their record-keeping activities. Often people do not pay enough attention to that as much as it is needed.

However, due to the absence of any well-maintained record-keeping process, many businesses often suffer from cash flow issues, audit risks, money problems, and many other non-compliance issues with the government.

Proper accounting and bookkeeping help in getting proper data on cash flow and profits. It will help in analysing and cutting down on unnecessary expenses that are eating into the profits. Moreover, it allows businesses to identify the areas that can help in increasing revenues and reaching short-term and long-term goals.

If you want to do your business successfully in Singapore, can you afford to miss your growth opportunities by neglecting your record-keeping? It is certainly not worth taking all such risks while you are running your business in Singapore. If you are simply not aware of how you can keep your bookkeeping efficiently then in this post we shall discuss briefly on this issue.

There are many companies in Singapore that can offer you support to maintain your bookkeeping in a proper manner, and we are a trusted book-keeping firm in Singapore.

What is bookkeeping?

This is nothing but recording all your daily financial details and all the transactions that you made. To ensure your business remains financially stable, you must take care of these tasks:

• Record all your financial transactions

• Post all your credits and debits

• Generate invoices

• Maintain all your current balance accounts, general ledger, historical accounts

• Complete payroll

Few tips for your efficient bookkeeping

1. Implement a system

Bookkeeping is not merely keeping all receipts and invoices, but also one must remember all the key objectives for record-keeping so that one can help manage his business efficiently.

All these record-keepings will be necessary when any government agency ever tries to assess your business then they can get the real picture.

2. Make it your habit

You must track your daily expenses regularly. At least some time must be devoted only to this activity at least once or twice a week.  You must be fully committed to it and if you have accurate data about all your business transactions that can always help you to run your business efficiently.

3. Keep your entire records

All companies operating in Singapore need to maintain all their records which is mandatory. If you fail to do then may invite penalties from the authorities. The following records must be maintained:

• All receipts in serial order

• All invoices

• All purchase and expense records

• All income records

• Account statements.

4. Keep up with all compliance and obligations

Accounting information and bookkeeping will provide you with financial foresight as one of the benefits. You can discover whether there are any patterns in your expenses, any areas where your financials can be improved, and an overall picture of your total cash flow. This is also often known as a corporate secretary, which can be freelance or a company.

5. Hire a professional

Most entrepreneurs may not have enough time or skills to maintain their book-keeping properly. Therefore, hiring a professional is the only way out. However, that may need an additional expense and most start-up companies may not even afford that.

Therefore, instead of hiring an accountant in Singapore to do that job, you can look for a certain company that can offer this service at a very reasonable cost.

How is book-keeping different from accounting?

A novice might consider bookkeeping and accounting to be the same thing while in reality, they are different from each other. Bookkeeping refers to the process of recording and organizing financial statements and transactions of a company. It maintains ledgers and records statements such as expenses, purchases, and sales. On the other hand, accounting has a much broader scope that entails analyzing financial data to make core decisions for providing strategic guidance for the organization. Effective bookkeeping is essential to ensure that all your accounting tasks and interpretations are able to provide meaningful insights for your business.

Essentials of bookkeeping in Singapore

In Singapore, the ACRA Accounting and Corporate Regulatory Authority oversees bookkeeping and financial reporting of organizations. Based on the Companies Act, they have devised standards and ACRA guidelines to which businesses must adhere to to ensure compliance and smooth operation. For any business operating in Singapore, a know-how of the following essentials of bookkeeping is a must.

SFRS and IRFS

The Singapore authorities have developed the Singapore Financial Reporting Standards (SFRS) based on the International Financial Reporting Standards (IFRS), taking into account the local context and regulations. SFRS has different rules based on local standards when it comes to processes such as inventory valuation, real-estate valuation, and deferred taxes. A bookkeeper should have comprehensive knowledge of the SFRS which will also help him to work in areas where IFRS is implemented. Key knowledge about SFRS guidelines ensures that businesses are able to show consistency and transparency in their financial reporting.

Goods and Services Tax (GST)

In Singapore, the government imposes a GST of 8% on the supply of goods and services. Not all businesses are required to register for GST; only the businesses with an annual turnover of more than SGD 1 million can charge GST on their taxable supplies. For those businesses, accurate bookkeeping of GST is essential. The GST bookkeeping includes filing regular GST returns, making GST declarations, recording transactions and maintaining those records, and collecting and remitting the collected GST amount to the government.

Financial Year End

While many countries impose the calendar year end as the financial year end for businesses, Singapore allows businesses to choose their own financial year end. Therefore, each company can have its own specific financial year end where they have to submit their financial reports. This gives businesses the freedom to align their business operations with their own chosen financial year end. The only requirement for them is to ensure that the financial year does not exceed 12 months and when a business has chosen its particular financial year end date, they must follow that date in the coming years.

Exemptions for small companies

Singapore has introduced a lot of incentives and exemptions for businesses qualified as a small business. To qualify as a small business, the company must fulfill at least two of the following three requirements:

• The total annual revenue of the company is less than SGD 10 million

• The total assets of the company in the particular financial year is less than SGD 10 million

• The number of employees at the end of the financial year is less than 50.

If a company qualifies as a small business, it enjoys exemptions such as complete tax exemption on the first SGD 100,000 of chargeable income and a further tax exemption of 50% on the next SGD 200,000 chargeable income. The company also enjoys adherence to simplified bookkeeping requirements and reduced disclosure requirements.

Computerized accounting systems

The Singapore government and IRAS maintain computerized records and encourage all companies to use computerized accounting softwares so all their records and reports are in compliance with IRAS’s e-tax guidelines. Therefore, bookkeepers must have sufficient knowledge about computerized accounting softwares used in Singapore along with IRAS’s guidelines to ensure accuracy and consistency.

Why should you hire a certain professional bookkeeper?

There are several benefits of hiring a professional bookkeeper for your business, some of which are discussed below:

• Bookkeeping and other accounting tasks take up a lot of time and effort. When you hire a professional bookkeeper, you can use that time in other important tasks related to your business’s growth while the bookkeeper handles all your day-to-day financial tasks as well as the tedious reporting aspects.

• A bookkeeper is a professional in his/her field and has the required expertise and experience to do an excellent job. Having a bookkeeper handle your financial tasks ensures that the accuracy of these tasks greatly improves.

• A bookkeeper in Singapore also has extensive knowledge about the country’s tax laws and regulations and will make sure that your company complies with them. This can help you meet all your tax deadlines and avoid penalties and fines.

• Since a bookkeeper ensures that all your records are up-to-date, in case of an audit, you can rest assured that all your accurate records will make the process of audit smooth and efficient. This means that you will be done with the audit in no time and you can go back to focussing on growing your business.

• When all your financial records are accurate and up-to-date, this financial data can be used for analysis and interpretation to make informed decisions about your business’s growth. This can help you discover which areas need improvement and which areas are proving profitable so you can continue growing in that area.

• In case you wish to secure loans from a bank or a creditor, having accurate financial reports and records will go a long way in showing them the financial position of your business which will help make their decision easier to grant you the loan.

• When you hire a professional bookkeeper, it also gives you peace of mind as you know that your records are legally compliant and up-to-date. You can focus all your energies on making important decisions for your business which will result in better efficiency and productivity. All these factors will contribute towards an increase in revenue and profits for your business.

In Singapore, you will find many such professional companies that can efficiently maintain your bookkeeping. Make sure you choose the bookkeeping service provider who offers custom solutions to meet the specific requirements of your business.

Should you need help with more in-depth matters such as incorporation services, tax advisory, corporate recovery, GST filing or litigation support, find our team and we can best advise you on what to do next! 

Conclusion

Whether you're starting a new business or looking to improve your current operations, Morrison Consultants is here to help. Our company incorporation services ensure a smooth start for your business, while our accounting and GST filing services allow you to stay focused on growth without worrying about compliance and financial management. Let us handle the details so you can focus on what matters most.