Accounting in Singapore
The Singapore Companies Act requires all companies in Singapore to maintain proper books of accounting. Following the associated guidelines and protocol for these books can be quite difficult, so many Singaporean companies opt to hire an accounting specialist to assist with accounting, payroll, and GST registration. Most accounting services in Singapore are outsourced to specializing firms for simply for convenience. However, outsourcing bookkeeping or accounting services also ensures that companies are fulfilling the requirements created by the ACRA and IRAS, thereby avoiding any fines.
What’s the difference between accounting and bookkeeping? The two terms have some overlap. Both processes record financial tax activities, cash flow, and overall business performance. Accounting, however, includes all of the work processes from recording, reporting, classifying, and analyzing detailed and organized data reports in order to improve a company’s financial standing. Bookkeeping is consistent record keeping, an important part of the accounting process that includes recording daily financial transactions in the order in which they occur.
Responsibilities of Accountants
Companies offering accounting services are responsible for the following:
- Collecting and filing all valid supporting documents necessary for the corporate activities, business transactions, and secretarial work
- Verifying the authenticity of the book of accounts in Singapore
- Compiling finance procedure manuals, preparing and providing the summarized reports for Singapore company financial statements and filing the yearly tax returns (The submission can be the responsibility of the bookkeeper or he can assist company accountants with the reports)
- Answering queries and providing and facilitating the support services during audit check
Cycle of standard Singapore accounting
The accounting process can be divided into three separate types of transactions, discussed in further detail below.
1. Beginning of Period Processing
This step determines that all reversing entries made in preceding periods have actually been reversed; this is done to prevent a double-record of one entry in the current period. Today, accounting software typically flag reversing entries so that the reversal is automatic. However, these accounts must be individually examined manually in order to check that the reversals have been completed.
2. Individual Transactions
The next step deals with identifying the nature of individual transactions. Once the type of transaction is identified, a document is prepared to either recognize or initiate the transaction. Then, any related accounts are identified so that the transaction may be filed appropriately with the account that it pertains to. The transaction is recorded and entered into the system either in the form of a journal entry or digital transaction form. This process is used to record all individual business transactions in the accounting records.
3. Period-End Processing
The last step combines all of the preceding information that has been gathered and compiles it into a financial statement. First, one must identify all of the ending balances in each account, otherwise known as a trial balance, and ensure that the debit amounts are equal to the credit amounts. Any inconsistency points to an error in the original transaction entry. If necessary, the errors found are corrected. Once the ending balances have been verified, the financial statements are ready for preparation. This combines the balance sheet information with information from the income statement. Once the financial statement is ready, it’s time to close the period. This includes shifting any remaining balances into the retained earnings account so that the post-closing trial balance does not have any account balances for all the revenue and expense accounts.
Range of book keeping and accounting services:
– Accounting/book keeping services on monthly / quarterly / half-yearly / yearly basis
– Bank reconciliation
– Preparation of management accounts (Balance sheet, Income statement)
– Preparation of sub-ledger listings (Fixed Asset / Accounts Payable / Accounts Receivable)
– Preparation of schedules for audit purpose
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