After the close of the financial year, preparing for annual reporting is all at once an obligation, duty and likely a chore, especially if you’re a small business owner with a newly incorporated company that does not house dedicated personnel to take care of such matters. One option to avoid scrambling through the year’s invoices to finalise the company’s accounts and file the required reports to ACRA and IRAS is to hire a Singapore Accounting Company. Even if you have no such inclination to do so, it is still certainly worthwhile to inquire about the service scope and price of Singapore Accounting Services from the corporate services provider you incorporated with.
Singapore Accounting Company
With years of experience in year-end compliance matters, a Singapore Accounting Company will make sure that your books and accounts are up to date and ready to compute and submit to avoid any penalties. The following is a typical year-end checklist that Singapore Accounting Services work with. It is definitely a handy checklist as to what to prepare annually for companies that are planning to handle accounting and compliance matters on their own.
1. Organise Invoices and Receipts
The last thing you need to deal with come year-end is messy and cluttered accounting records, such as business receipts, invoices and expenses. Throughout the year, all receipts should be clearly categorised and stored either physically or electronically using dedicated folders or an accounting software. Good maintainance of financial records big and small will make an auditing process easier and keep your accounting books accurate, which will help take the stress out of tax preparation. Receipts should be stored for at least three years, just in case your company ends up in an audit.
2. Assign Value to Inventory
If your business involves manufacturing or mechandising, you will need to account for the value of your raw materials, work-in-progress and finished goods, as inventory counts as a current asset on a company’s balance sheet, and therefore makes a difference in your tax situation. Properly accounting for inventory is not only required in tax returns, where revenue and profit is concerned, but it is also essential to running a profitable business.
3. Statement of Comprehensive Income
Also called Income Statement or Statement of Profit and Loss, a Statement of Comprehensive Income comprises the net income and other comprehensive income of your company. An accountant will take the net income from the income statement and add or subtract the “other incomes” where necessary. It is your business’ total revenue and expenses, in other words, the extent of the profitability (or loss) of your business for the period, especially useful if you compare it to company budget to shed light on how well you have performed against your business plan for the year.
4. Statement of Financial Position
More commonly known as Balance Sheet, the Statement of Financial Position, which is typically prepared monthly, quarterly and annually, reveals your company’s net worth and financial health. It lists all your company’s assets, liabilities and equities, which include resources, obligations and ownership details. You can rely upon your periodic Balance Sheets to monitor the performance of your assets and liabilities.
5. Statement of Cash Flows
A Statement of Cash Flows is a bridge between your Statement of Comprehensive Statement and Balance Sheet. It shows how cash and cash equivalents enter and leave your company, in other words, where your company’s money has gone, so you can determine if your business has sufficient capital to get through the new year. It lists cash inflows and outflows that belong to operating activities, investing activities and financing activities, which include revenue, expenses, investments, assets purchased or sold, and loans paid or taken.
Statement of Comprehensive Income, Balance Sheet and Statement of Cash Flows work together to help analyse your business’ current ratio, total debt ratios and profit margin.
6. Track Tax Deadlines
Companies in Singapore file their annual income tax returns by paper or electronically. Deadline for paper filing is 30 November and deadline for e-filing is 15 December. The two corporate income tax forms to be submitted to IRAS are: Estimated Chargeable Income (ECI) and Corporate Income Tax Returns (Form C-S or Form C). All companies in Singapore are taxed at a flat corporate rate of 17%. However, if you’re a newly incorporated business under three years, you will qualify for IRA’s partial tax exemption and tax exemption scheme for new start-up companies.
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