The ability to maintain proper accounting records is the foundation to building a well-run company. In Singapore, it is specified legally that all companies must keep their accounting records and supporting documents a period of not less than 5 years from the end of the financial year in which those transactions or operations to which those records relate are completed. Show
All companies are required to maintain proper records of their financial transactions, source documents and relevant supporting documents, including:
For Goods and Services Tax (GST) registered companies, these records also include GST account summary of input/output tax, business goods put to non-business use, and the disposal of business goods. Generally, all the above records would be required by the firm providing you with accounting services in Singapore for the preparation of accounting records and/or financial statements. As the responsibility with retention of records lie with the directors of the company, these records should eventually be returned to the company for safe keeping and accessibility should the need arise. For companies that have been struck off, all books and papers of the company are required to be retained by any person who was an officer prior to the striking off for at least 5 years from the date of striking off. In addition, for wound-up companies, the company’s liquidator must retain such records for 5 years from the date of dissolution. If you are unsure about the record-keeping requirements for your accounts, it will be wise to consult professional firms providing accounting services in Singapore to assist you. For GST-related records, seek the advice from firms providing GST compilation services. In line with the general digitisation of business, companies should also consider digitising their accounts and cloud accounting services. Most providers of accounting services in Singapore should be able to advise you on digitisation but do seek out companies that have a strong track record. Keeping accurate and up-to-date records is vital to the success of your business. Good records help you to minimise losses, manage cash, meet any legal, regulatory and taxation authority requirements and improve financial analytics. Your accountant can help you set up a record-keeping system. On this pageUnderstanding financial record keepingRecord keeping is how you log, store and dispose of important financial information for your business. Records are:
You may need to access your records at different times of the year (e.g. for end of financial year) or on request (e.g. by the Australian Taxation Office). Seek professional informationTalk to your accountant or financial adviser for tailored advice on:
Benefits of good financial record keepingGood financial record keeping can help you:
Good record-keeping practices videoIn this video you can learn about creating and maintaining good record-keeping practices in your business. This video covers:
Transcript of video How to keep financial recordsThere are certain record-keeping requirements for businesses in Queensland, and there may be specific laws and requirements related to your industry sector. You can keep records using either an electronic or manual system. You also need to make sure your records are secure, private, backed up and can be easily reported on if needed. The Australian Taxation Office (ATO) recommends that businesses use an electronic record-keeping system. The same record-keeping principles apply to both electronic and manual records. Learn more about digital record keeping for businesses. Seek professional adviceTalk to your accountant or financial adviser for advice on which method or system is best for your business, and your legal responsibilities for keeping records. Assess your record-keeping skillsUse the ATO record-keeping evaluation tool to identify what records you need to keep and review how well your business is keeping records. Electronic record keepingAn electronic record-keeping system, such as accounting software, makes it easier to capture information, generate reports, and meet tax and legal reporting requirements.
Having good accounting software or systems is important to keep your business running smoothly. The right system can help warn you if it looks like your business might run out of cash. Make sure the software has standard business reporting (SBR) forms needed to report to the ATO (such as BAS statements) and meets Australian tax requirements. Review what your business needs from accounting software before deciding which one to buy. Consider if you need software that can:
Free or paid software optionsThere are many software packages that allow you to successfully control records without needing accounting experience. There are free software packages available but make sure these meet your business's needs. There are many commonly used purchased accounting systems used by small businesses that are billed monthly or purchased outright. Consult with your accountant, financial adviser or industry organisation to assist with identifying the most appropriate software package. Software for Single Touch PayrollAll businesses must report tax and superannuation information directly to the ATO. This is known as Single Touch Payroll (STP). You should check that STP reporting is included in your accounting software. The ATO provides a register of software products that support STP reporting, including low-cost options for micro employers. SuperStreamYou must use the ATO's SuperStream to pay employee superannuation guarantee contributions to super funds. This ensures money and data are sent electronically in a standard format across the superannuation system. Make sure your accounting software is compliant with SuperStream. Understand your SuperStream requirements as an employer (including if you are self-employed). Learn more about digital record keeping for businesses from the ATO. Manual record keepingYou may prefer to use a simple, paper-based record-keeping system.
How long to keep recordsYou must keep your records for a certain period. The length of time will depend on the type of record and your business type or industry. Legal informationThere are legal requirements for how long you keep some records. These include:
Keeping your records secure and privateLegal informationIf you collect and keep customer records, you'll need to protect and respect your customers' privacy. You may have to comply with the Privacy Act 1988. Read the Office of the Australian Information Commissioner's guide to privacy for small business to help you apply the national privacy principles. New technologies make it easier to access, transmit and misuse personal information. You will need to pay particular attention to securing online and electronic records. You should develop a privacy policy and train staff to implement it. Learn more about protecting privacy and information. Reporting on your recordsIf you use an electronic record-keeping system, you must be able to produce a hard copy of a record if the ATO or Australian Securities and Investments Commission (ASIC) request it. Find financial reporting requirements broken down by business type from ASIC. Backing up recordsSet up a secure electronic backup system to ensure records are safely stored and regularly backed up. Daily backups are recommended, particularly for important records. Online (or 'in the cloud') backup services allow you to access records from anywhere, at any time. They are generally inexpensive and offer benefits for flexible work and business continuity. Make sure any online system protects the privacy and security of your business and customers. Learn more about cloud computing. Cheap backup options include memory sticks and external hard drives. Make sure any physical backup copies are stored in a separate location to your business in case of fire, theft or a natural disaster. What records to keepKeep these records to meet basic taxation legal requirements. Cash movement
Sales
Purchases
Keep these records to meet legal requirements and to accurately determine your tax position at the end of the financial year. Stocktake
Debtors and creditors
Capital gains details
Depreciation
Expenses
Staff and wages
Basic accounting records
Agreements
Assets and liabilities
Other documents
TipsKeep your personal and business records separate to simplify business reporting and tax returns. For example, use a dedicated business credit and debit card for business expenses to make it easy to separate business and personal expenses. Financial record-keeping checklist
Also consider...
What are financial record used for?To identify all your business assets, liabilities, income and expenses. This information can then be used to compare with your sector's averages and highlight your strengths and weaknesses. Good records are essential for the preparation of your end of year returns and financial statements.
What are the types of financial records that you are required to keep?The five key documents include profit and loss statements, balance sheets, cash-flow statements, tax returns and aging reports.
What is one of the main reasons why businesses need to keep accurate accounting records group of answer choices?Better Marketing. Accurate and up-to-date accounting helps you make better revenue forecasts for your company. ... . More Financial Stability. ... . Investments in Quality and Efficiency. ... . Hiring and Maintaining Happier Employees. ... . Fraud Prevention. ... . Controlling Costs. ... . Better Security. ... . Good Financial Management.. |