How Long to Keep Accounting Records in Singapore

Record-Keeping Requirements in Singapore

Maintaining accurate and thorough accounting records is crucial for businesses operating in Singapore. Using accounting software can significantly enhance the accuracy and efficiency of managing these records. This ensures compliance with various legal and regulatory requirements and supports efficient financial management.

Duration of Record-Keeping

Understanding how long to keep accounting records in Singapore is crucial to avoid penalties and fines for non-compliance. Companies must retain accounting records and supporting documents 1 from the relevant Year of Assessment (YA). 

Failure to comply with this requirement can result in significant penalties and fines. 

Consequences of Non-Compliance

Penalties and Fines

Non-compliance with record-keeping requirements can lead to severe consequences, including fines and imprisonment. Improper record-keeping can also result in disallowed expense claims and capital allowances. The specific consequences may include:

• Financial Penalties
  The Inland Revenue Authority of Singapore (IRAS) can impose monetary fines for failing to maintain proper records.
• Legal Consequences
  Persistent non-compliance can lead to legal action, including prosecution. This can damage the company's reputation and result in additional costs for legal defence.
• Tax Implications
  Inaccurate or incomplete records can lead to errors in tax filings. This may result in the disallowance of expense claims, adjustments in tax assessments, and potential audits.
• Operational Disruptions
  Regulatory authorities may demand inspections and audits, causing disruptions to business operations and consuming valuable time and resources.

Struck-Off Companies

If your business has been struck off or dissolved, an officer must ensure that all company books and papers are retained for at least five years after the date of dissolution.

What Records Must Be Kept?

Businesses must maintain proper records of all financial transactions. This includes:

Income Records

Documentation of all income received by the business.

Business Expense Records

Detailed records of all business-related expenses.

Purchase Records

Records of all purchases made by the business.

Accounting Records

Comprehensive records, including ledgers, journals, and financial statements.

Bank Statements

Monthly statements from all bank accounts used by the business.

Business Documents

Retain all associated business documents such as source documents, schedules, and bank statements.

Proper records of business transactions are essential for tax compliance and financial management.

Supporting documents such as invoices, receipts, vouchers, and contracts must also be retained to verify income and claims for deductions.

Importance of Record-Keeping

Complying with Laws and Regulations

Proper record-keeping is essential for:

• Fulfilling Financial Commitments: Ensuring all obligations to suppliers, employees, and creditors are met promptly.
• Complying with Legal Requirements: Adhering to laws such as the Income Tax Act and regulations set by the Accounting and Corporate Regulatory Authority (ACRA).
• Preparing Financial Statements: Accurate records are necessary for preparing financial statements and submitting precise tax returns.
• Making Informed Decisions: Detailed records provide valuable insights for future business decisions.

Methods of Keeping Business Records

At CFO Accounts & Services SG, we understand the importance of maintaining accurate and accessible business records. Here are the methods we recommend for keeping your business records:

Electronic Method

Electronic records can be maintained using software programs or cloud storage solutions. They offer a secure and efficient way to manage business records. Examples include scanned invoices and digital receipts. 

Our services at CFO Accounts & Services SG include setting up and managing these digital systems to ensure your records are organized and easily accessible. Digital records reduce the risk of physical damage and allow for quick retrieval, saving you time and effort.

Paper records can be kept using physical files or photocopies. However, they are susceptible to damage from incidents such as spills, fire, or misplacement. 

At CFO Accounts & Services SG, we can help you establish a robust physical filing system to minimize these risks. We also offer digitization services to convert your paper records into electronic formats, providing a backup and enhancing security and accessibility.

By choosing CFO Accounts & Services SG, you can ensure that your business records are maintained efficiently and securely, whether you prefer electronic or paper methods. 

Our expert team is here to support you in implementing the best practices for record-keeping tailored to your business needs.

Best Practices for Record Keeping

Establish a systematic approach to record-keeping that works for your company. Accurate records are necessary for tax purposes and help businesses comply with laws and regulations. 

Leverage Technology

Adopting a digital record-keeping system can save time and money, enhance accuracy, and ensure compliance with regulatory requirements. Let CFO Accounts & Services SG guide you in leveraging the latest technology for your record-keeping needs.

Additional Tips for Effective Record-Keeping

Implement a Record-Keeping Policy

Create and enforce a record-keeping policy that outlines what documents need to be kept, for how long, and how they should be stored. This policy should be communicated clearly to all employees handling financial documents. 

CFO Accounts & Services can help you develop a customized record-keeping policy.

Train Your Staff

Ensure that your staff understands the importance of record-keeping and is trained on the company's policies and procedures. Regular training sessions can help keep everyone up-to-date with the latest requirements and best practices. 

CFO Accounts & Services offer staff training sessions to ensure everyone is on the same page.

Regular Audits

Conduct regular audits of your record-keeping system to identify and address any gaps or issues. This proactive approach helps maintain compliance and improve overall efficiency. Regularly assess your record-keeping system to ensure it meets all legal requirements and supports efficient business operations.

CFO Accounts & Services provides auditing services to help you stay compliant and optimize your processes.

Targeting and Retargeting

GST-Registered Businesses

GST-registered businesses should refer to the Record Keeping Guide for GST-Registered Businesses. This guide covers the requirements for keeping business records for Income Tax and GST purposes, including electronic media and imaging systems.

Non-GST-Registered Businesses

Non-GST-registered businesses should refer to the Record Keeping Guide for Non-GST-Registered Businesses. This guide outlines the requirements for keeping business records for Income Tax purposes, including electronic media and imaging systems.

Maintaining accurate and thorough accounting records is not just a regulatory requirement but also a best practice that supports a business's overall health and success. 

By adhering to these guidelines and implementing effective record-keeping strategies, businesses in Singapore can ensure compliance, enhance transparency, and make informed financial decisions. 

FAQs

Ensure Compliance with Your Accounting Records!

Start your business journey in Singapore with ease and confidence. At CFO Accounts & Services SG, we provide expert guidance and comprehensive accounting services to ensure your business complies with all legal requirements. Reach out now and let us help you maintain accurate and organized records, setting a strong foundation for your success.