Good accounting isn’t just about compliance—it helps your SME stay financially healthy and grow with confidence. Here are 10 essential tips to help Singapore business owners stay on top of their numbers.
1. Choose the Right Accounting Method
Select between cash accounting (recording income/expenses when money changes hands) and accrual accounting (recording when transactions occur). SMEs typically start with cash accounting, but accrual provides more accurate financial insights as your business grows.
2. Maintain Accurate Financial Records
Keep well-organized records of sales, purchases, bank statements, payroll, and tax filings. Accurate bookkeeping is crucial for decision-making, audits, and meeting IRAS and ACRA requirements.
3. Use Reliable Accounting Software
Automate bookkeeping with software that suits your needs—like Xero, QuickBooks, or Financio. Look for tools that handle invoicing, tax, payroll, and reporting in one place.
4. Separate Business and Personal Finances
Use a dedicated business bank account. Mixing funds can lead to accounting confusion, tax issues, and a lack of clarity about how your business is truly performing.
5. Monitor Expenses and Cash Flow
Stay on top of your spending. Categorise costs, track overdue payments, and review cash flow regularly to avoid surprises and ensure you can meet obligations on time.
6. Know Singapore’s Accounting & Tax Regulations
All businesses must comply with ACRA and IRAS guidelines. Maintain records for at least 5 years, and understand requirements for GST registration, tax filing, and audit exemption status.
7. Forecast for Future Investments
Create financial projections to plan for hiring, equipment purchases, or expansion. Forecasting helps secure funding and prevents overspending.
8. Streamline Invoicing and Payments
Send invoices promptly, follow up on overdue payments, and take advantage of supplier credit terms. Use accounting software with automated invoicing features for better cash flow.
9. Review and Improve Accounting Practices
Schedule regular reviews of your financial systems. Look for outdated processes, inefficiencies, or compliance gaps. Update workflows and adopt digital solutions where possible.
10. Work with a Professional Accountant
Whether in-house or outsourced, a qualified accountant can help you stay compliant, minimise taxes, and grow strategically. They’re especially valuable during tax season or when applying for grants or financing.
Frequently Asked Questions
- 1. Do SMEs in Singapore need an accountant?
- Yes, even small businesses benefit from professional accounting advice for compliance, tax efficiency, and business planning.
- 2. What’s the benefit of using accounting software?
- It reduces manual work, improves accuracy, and makes it easier to generate reports, file taxes, and track business performance.
- 3. How often should SMEs review their finances?
- At least monthly. Regular reviews help identify issues early and support better decision-making.
- 4. Is it mandatory to file financial statements in Singapore?
- Yes. Even audit-exempt companies must prepare compliant financial statements under the Singapore Financial Reporting Standards (SFRS).
- 5. Can I outsource accounting services in Singapore?
- Absolutely. Many SMEs outsource to firms like Stars Bridge to save time, reduce errors, and access expert guidance.