A Singapore company must keep accounting records that explain its transactions and show its financial position, and it prepares financial statements each year. Most small companies keep the books monthly, close the year with an accountant, then file with ACRA and IRAS. Audit is required only where the company does not qualify for an exemption.
The Companies Act 1967 requires every company to keep accounting records that correctly record and explain its transactions, allow the financial position to be determined with reasonable accuracy and allow true and fair financial statements to be prepared. The records must be kept for at least five years, and directors are responsible for making sure it happens.
Records include sales and purchase invoices, receipts, bank statements, payroll records, fixed asset registers, contracts and board minutes that explain a transaction. A ledger entry without the underlying document is hard to defend if IRAS or an auditor asks for it.
Records can be kept electronically if they can be produced in a readable form within a reasonable time. Backups and access control are part of the duty, so decide who can see and change the books.
A written bookkeeping policy of one page, covering who records what, which documents are mandatory and where they are stored, turns the legal duty into a routine that survives a change of staff.
The chart of accounts is the list of accounts used to record transactions. For a small company it should be short enough to use without errors and detailed enough to answer the questions that matter: which revenue streams make money, which costs are rising and how much is owed to and by the company.
Separate GST accounts for input tax and output tax, a payroll liabilities account for CPF and withheld amounts, and director's current accounts. Keep personal and company spending apart from the start, because mixed payments are the most common source of year-end adjustments.
Agree the structure with the accounting firm before the first entry. Renaming accounts later is easy, but moving a year of entries between accounts is slow and risks leaving gaps in the audit trail.
Foreign-currency items need a rule. State which exchange rate source you use for invoices and payments in other currencies, apply it consistently and record the rate on the entry so the figure can be traced later.
A reliable monthly cycle has five steps: record sales invoices, record purchase invoices, reconcile the bank, review receivables and payables, and post accruals and depreciation. Doing it within the first ten days of the following month keeps GST and management reporting current.
Collect source documents continuously. A shared folder with a naming rule, such as date, supplier and amount, beats a shoebox of receipts at year end. Ask staff to submit expense claims with receipts by a fixed day.
Review three reports each month: aged receivables, aged payables and a profit and loss against last year. Surprises in these show up long before they appear in the tax computation.
Close the month formally, with a note of who prepared and reviewed the accounts. A closed period prevents back-dated entries that change figures already given to the bank or the tax return.
Companies prepare financial statements under Singapore Financial Reporting Standards. Eligible smaller companies can use the Singapore Financial Reporting Standard for Small Entities, a simplified framework with fewer disclosures. Eligibility depends on size and public accountability, so confirm it with your accountant.
The statements normally include a statement of financial position, a statement of comprehensive income, a statement of changes in equity, a cash flow statement and notes. The directors approve them and sign a statement saying they give a true and fair view.
They go to the shareholders and are used for the corporate tax return, for bank covenants and for ACRA filing. Present them in Singapore dollars unless the company has a different functional currency, and show comparative figures for the prior year.
A company is exempt from audit if it qualifies as a small company, which generally means meeting at least two of three tests for turnover, total assets and number of employees for two consecutive years, or if it is a dormant company. Thresholds are in the Companies Act and on the ACRA website.
Even when audit is waived, the financial statements must still be prepared. Many shareholders and banks ask for review or audit anyway, so exemption should be a decision, not an assumption. Where audit is required, appoint an auditor registered with ACRA before the year end.
The annual return to ACRA reports officers, shareholders, share capital and, where applicable, the financial statements. Deadlines run from the financial year end, so keep the calendar from the incorporation file. IRAS filings run in parallel, and the numbers must reconcile.
The year-end checklist should include a stock count, fixed asset review, confirmation of bank balances, a list of unpaid invoices and a schedule of director loans, all of which the accountant will request in the first week.
4softerp.net is a multi-company financial ERP for your own bookkeeping, and 4invoices.net produces PDF invoices and keeps an invoice archive that you can share with your accountant. They give you one place to store documents and entries.
There is no ready-made Singapore chart of accounts or audit-format export in these products. Statutory accounts, the ACRA filing and the tax computation are prepared by you and your accountant outside the tools.
Review who has access to the books each quarter. Remove former staff, restrict posting rights to people who prepare entries, and keep a separate approval for journal entries that adjust profit, because an unreviewed journal is the easiest way for an error to reach the statements.
Source documents — invoices, receipts, expense claims — are scattered across email, WhatsApp and shared drives. The accounting firm spends hours or days collecting them before each filing, and some are inevitably missed.
Collect invoices, receipts and expense records in one place and share them with your accounting firm using whatever access method you agree. 4invoices keeps a PDF invoice archive; documents are not auto-categorised for the accountant.
The chart of accounts has been set up generically without Singapore-specific categories, making year-end adjustments time-consuming and producing financial statements that require significant reworking.
Agree the chart of accounts with your accounting firm and set it up in 4softerp yourself. There is no ready-made Singapore chart of accounts or audit-format export; statutory financial statements are prepared outside the products.
At least five years. That period applies to the accounting records that explain transactions and support the financial statements, and IRAS applies a similar period to tax-related records. Keep invoices, receipts, bank statements, payroll records and contracts in a form you can produce quickly, with ledger entries linked to the underlying documents.
Not always. A company that qualifies as a small company under the Companies Act, or is dormant, can be exempt from audit. The small company test looks at turnover, total assets and employees over consecutive years. Even if exempt, the directors must still prepare financial statements, so confirm your status each year.
It is a simplified version of Singapore's financial reporting framework for smaller companies, with fewer recognition and disclosure requirements than the full standards. Not every company can use it, because eligibility depends on size and public accountability. Ask your accountant whether you qualify before you adopt it, and document the decision for the auditor.
Yes, the law does not require a professional bookkeeper. Directors remain responsible for accurate records and financial statements, though. Many founders keep the monthly books themselves and hire an accountant for year-end statements and tax filing. The main risk is gaps in documentation, so use a consistent monthly routine and keep every source document.
A typical chart groups accounts into assets, liabilities, equity, revenue and expenses. Add accounts for GST input and output tax, CPF and payroll liabilities, and director's current accounts. Keep it as short as the business allows, agree it with your accountant before the first entry and avoid mixing personal and company spending.
A multi-company financial ERP for your bookkeeping. Statutory accounts are prepared with your accounting firm.
