In recent years, business owners have faced higher expectations regarding financial transparency and government compliance. Many businesses struggle to juggle the day-to-day responsibilities alongside more complicated tasks such as accounting, compliance, finance, and risk management.

Accounting outsourcing, in a way, is hiring a service provider such as Allied Services to handle the accounting responsibilities of your business. Essentially, outsourcing your accounting to professional accounting firm reduces fraud and allows for better internal controls. Your outsourced accountant should be able to identify problems, flag errors, and notify you of any inconsistencies. This will help you have a better understanding of your business’s financial health, allowing you to make more confident and informed decisions.

There are a number of accounting requirements in Singapore your business should be aware of in order to avoid penalties. For instance, your business needs to file important documents in a timely fashion throughout the year, including Financial Year-End (FYE) reports, Estimated Chargeable Income (ECI), and your Annual Tax Returns. There is also a set of Singapore Financial Reporting Standards (SFRS) to follow, which all companies with a financial period starting on or after 1 January 2023 need to comply with.

If you need more advice or information on these requirements, our professional team of accountants at Allied Services is happy to help answer any questions you may have.

If your company’s year-end ends after the date of commencement of the Companies (Amendment) Act 2014, i.e., 3 January 2016 and is a dormant non-listed company (other than a subsidiary of a listed company), your company is exempt from requirement to prepare financial statements, if your company:

• fulfills the substantial assets test;
• has been dormant from the time of formation or since the end of the previous financial year; and
• the directors of the company have lodged with the Registrar a statement by the directors that:
  (i) the company has been dormant for the period set out in paragraph (b), as the case may be;
  (ii) no notice has been received under section 201A(3) of the Act in relation to the financial year; and
  (iii) the accounting and other records required the Act to be kept by the company have been kept in accordance with section 199 of the Act.

The substantial assets test is that the total assets of the company at any time within the financial year must not exceed $500,000. For a parent company, the consolidated total assets of group at any time within the financial year must not exceed $500,000.

Dormant listed companies and their subsidiaries, and dormant unlisted companies which do not fulfil the substantial asset test must prepare financial statements but are exempt from audit. This remains unchanged from the current position.

In Singapore, every registered company is required to file financial statements with Accounting and Corporate Regulatory Authority (ACRA) annually and have their statements and accounting records officially audited every year, unless they are exempt from audit

This requirement ensures the financial transparency and accountability of private limited companies to their shareholders and other stakeholders. Failure to comply with this requirement can result in penalties and legal consequences.

In Singapore, all companies are required to appoint an auditor within 3 months of its incorporation unless exempted from an audit. The audit exemptions applies for companies that falls under the “Small Company” or “Small Group” category:

Audit Exemption Criteria

• The company's total revenue does not exceed 10 million SGD.

• The company's total assets for the financial year end does not exceed 10 million SGD.

• The number of full-time employees at the end of the company's financial year does not exceed 50.

A financial audit of a company by a private auditing firm can bring several benefits, including: Increased credibility and confidence: An independent audit provides assurance to stakeholders, including investors, creditors, and customers, that the company's financial statements are accurate and reliable. For cases where a company is applying for business loans from a bank or a third-party, it is usually a common practice by the lender to request an audited report for considerations.

Seasoned and pro-active accounting firm such as Allied Services develops a deep understanding of their target clients' pain points, challenges, and industry-specific requirements. As a result, they can craft customised solutions that precisely address these needs, demonstrating their expertise and dedication to meeting clients' unique demands.

At Allied Services, we emphasise on communication, teamwork, problem-solving, and analytical abilities. These skills are highly valued in accounting and finance roles, as they contribute to effective collaboration and decision-making.

The main differences between outsourced accounting and an in-house accountant come down to training, control, reporting, and cost. It is critical for a business to understand these pros & cons in order to find the right solution to your accounting and bookkeeping needs.

A small mishap from any of your in-house accountants may cost you far more to fix than having the right outsourced accountant do the right job from the start. It saves you the time and money required to recruit and train and relieves you from paying payroll taxes, salary, insurance, benefits, time-off, etc.

You can prepare your own company’s financial statements in Singapore. However, it is essential to note that certain requirements must be met to ensure that the financial statements are accurate and compliant with local regulations. If you are not aware of these rules and regulations or fail to meet them, there may be consequences such as fines imposed by the authorities.

In addition, any inaccuracies in your financial statements can lead to penalties such as late filing fees and interest payments that could have been avoided with professional assistance. As such, it is also important to note that company financial statements that do not meet specific requirements may require additional filings.

The process of preparing company financial statements can be a complicated one.

First, you need to compile all relevant data from your records and those of other companies you have been associated with as either shareholders or debtors. This includes income, expenses, assets, and obligations for each month or the year-to-date period covered by your statement.

After compiling this information monthly, it is necessary to calculate the total net profit for each month/year-to-date period covered by your statement. The next step would be computing taxes payable on these profits. Once these calculations have been made, we must summarise them into a balance sheet and Profits & Loss report.

Accounting software is one of the important systems in a company. So, it takes careful consideration in choosing that meet your business requirements. The process in accounting is not only payment transactions but also includes tax management, accounts receivables management, invoices for clients, and so on. Accounting software offers efficient financial controls, improve accuracy, and automatic calculation, enabling real time reporting.

At Allied Services, we prefer accounting solutions that support businesses of all shapes and sizes.depending on our customer needs and preference, we use two of the most popular and efficient cloud-based accounting software (namely Xero and QuickBooks Online) for keeping our customers’ accounting transactions safe, accurate, and timely.

If your accounts are messy, during onboarding, our team will address it by doing an initial accounting review to identify any issues and to propose the best corrective measures. This process is known as a ‘Transactions Review and Reconstruction’ and is a necessary to ensure our client’s accounting transactions and records are in good standing which is in accordance with the Accounting Standards of Singapore.