Record keeping in Singapore: A complete guide (2024)

Record keeping is a foundational element of running a successful business in Singapore.

Beyond ensuring compliance with ACRA and IRAS, proper record-keeping helps businesses maintain transparency, manage financial health, and prepare for potential audits. 

This guide provides an in-depth overview of record-keeping requirements, best practices, challenges, and more.

1. What is proper record keeping in Singapore?

In Singapore, recordkeeping means storing all documents and information related to a company’s financial activities and transactions. 

According to IRAS, this includes maintaining accounting ledgers, journals, and schedules that show the company’s income, expenses, assets, liabilities, profits, and losses. 

Additionally, businesses must keep source documents, like receipts, invoices, bank statements, and any other paperwork related to sales and purchases. These records prove the accuracy of financial information and help with tax reporting, compliance checks, and audits.

For companies registered for GST, extra documents are required, such as tax invoices and records for the sale or disposal of business goods, as they are needed for GST reporting.

2. Why do businesses keep records in Singapore?

Keeping accurate records is not only recommended but mandated under the Companies Act and Income Tax Act in Singapore.

Without organized and up-to-date records, companies face numerous risks, including:

• Legal and financial penalties: Singapore law imposes fines for non-compliance with record-keeping requirements. Failure to produce accurate records can lead to investigations or increased tax liabilities.
• Operational inefficiencies: Poor record-keeping can hinder decision-making, making it difficult to assess the company’s financial status or forecast cash flow accurately.
• Reputational damage: If non-compliance becomes public knowledge, it can harm client trust and discourage future partnerships.

In addition to these risks, Singapore companies may face potential audits by ACRA or IRAS. 

Well-organized and complete records make it easier to provide necessary documentation during an audit, reducing stress and ensuring a smoother audit process.

3. Must-know Singapore record-keeping requirements

3.1. How long to keep accounting, and tax records for the Singapore company?

The Singapore Companies Act stipulates that businesses must retain records for a minimum of five years from the end of the relevant assessment year. 

This duration ensures that all necessary documentation is available for audits or inquiries by tax authorities.

For example, a trading company in Singapore's financial year ends in November. For the company’s financial year of 2023, it must keep all of its required records until at least 31 November 2028.

3.2. Where to keep the Singapore company records? 

According to ACRA and IRAS guidelines, Singapore companies can maintain business records in 2 ways.

1. At the company registered office or at a place deemed suitable by the company’s directors or;
2. On cloud storage with robust security. 

The stored document must be legal, and accurate. These business records must be available for inspection at all times in the required period.

3.3. What business records must the Singapore company maintain?

According to IRAS guidelines on Records That Your Company Must Keep, businesses are required to keep accurate records of all transactions. This includes:

1. Accounting ledgers, journals, and schedules: These should reflect the company’s financial details, such as income, expenses, assets, liabilities, profits, and losses.
2. Source documents: These are essential records of each transaction, including receipts, invoices, bank statements, vouchers, and other documents provided to or received from customers.
3. Additional transaction evidence: Any other documentation that verifies business transactions must also be maintained such as contracts.

Here is a checklist from IRAS listing all the records your company must keep depending on the company's GST status.In total, there are 30 types of records your company must maintain. 

Note: The requirement records are mandatory for tax purposes. The recommended records such as bank statements should be kept as good practices. These records should be available upon request by the tax authorities when needed.

4. Best tips for effective record-keeping for small business

Maintaining an effective, simple record-keeping system helps for small and medium businesses reduce compliance risks, improves accuracy, and ensures that records are readily available if needed.

4.1. Choose a consistent record keeping system

Choose a method for categorizing and storing documents, whether physical or digital. Label folders clearly and group documents by type, date, or purpose. 

Examples of record-keeping systems

• Alphabetical or Chronological Organization: Helps to quickly locate documents and check if any records are missing. For example A, B, C, D, E, in alphabetical order or format Month/Year for chronological order.|

• Segregation by Type: Create separate folders for financial, operational, and statutory records, as well as tax-related documents.

Example of keeping records by type

4.2. Leverage the best record-keeping software

The shift toward digital records offers security, convenience, and ease of access. Accounting software like QuickBooks, Xero, and Zoho Books can help automate tracking, categorization, and storage with these 2 benefits:

• Cloud storage: Store records in cloud platforms with security protocols and encryption for sensitive information. 
• Automated tracking: Many accounting tools offer real-time tracking, expense categorization, and document storage, helping to streamline monthly reconciliation.

In addition, to cloud storage systems, small and medium businesses can opt for Google Drive or OneDrive to use.  To optimize the fee, you can choose to use a physical disk of around 5-10 TB to keep digital documents in a safe place.

4.3. Security measures

Securing records is essential to protect sensitive information. 2 tips below is recommended for extra protection

• Access Control: Restrict access to sensitive documents to authorized personnel only.
• Regular Backups: To avoid data loss, schedule regular backups and keep copies of critical records in secure, secondary locations.

5. Penalties for not following record-keeping requirements

Non-compliance with record-keeping regulations is a serious issue for businesses in Singapore, and it can have significant consequences. Your business records may be considered improperly kept if:

1. Records are not maintained: If you fail to keep your accounting and related documents up to date, this is considered improper record keeping.
2. Records are not kept for the required time: Businesses must retain accounting records for a minimum of five years. 
3. Records are not organized properly: If your accounting records are disorganized or stored inappropriately, they may be deemed improperly kept.

If your business does not maintain adequate records, both the company and its officers could face serious penalties, including a jail term of up to 12 months or a fine of up to $5,000, along with a default penalty under the Companies Act.

Additionally, improper record-keeping is considered an income tax offense. This could result in IRAS rejecting your company’s claims for capital allowances and expenses. Under the Income Tax Act, those found guilty of poor record keeping could face up to six months in jail or a fine of up to $1,000 if they fail to make required payments.

6. How can Global Link Asia Consulting help you maintain proper records?

No matter what stage you are, a startup, a running business or a company wanting to expand overseas, Global Link Asia Consulting can help you on your mission.

We can help you:

Register a company in Singapore;

• Open a corporate bank account in Singapore with a 99% success rate;
• Appoint a reliable nominee director and an experienced secretary;
• Choose the right company types for tax optimization in Singapore;
• Apply for Singapore business licenses;
• Get an affordable, professional registered office address for business;
• Support to open, authenticate, and manage Stripe Paypal Business in Singapore, Hong Kong, and the U.S;
• Handle all your tax accounting needs, timely annual filings, auditing, and more.

7. FAQs about record keeping for Singapore company

We offer a comprehensive range of accounting and tax services for Singaporean companies. Our services include:

• Tax Consulting including corporate income tax, GST tax, contractor tax, and more.
• Monthly/Annual Tax Accounting services in accordance with Singapore accounting standards (SFRS).
• QuickBooks Consulting and Licensing.
• Corporate Income Tax Return Preparation
• GST Tax Return Preparation.

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