Month: June 2023

Why Your Business Needs Accounting Services in Singapore

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Why Your Business Needs Accounting Services in Singapore

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Accounting is one of the essential functions your business requires for robust financial management, no matter how small or large your company is. However, many business owners still engage an in-house accounting team to take care of these tasks. This not only takes up their valuable time but also heightens the risk of compliance issues that could cost their business in the long run. 30% of Singapore start-ups fail within the first three years, and poor financial management is one of the principal causes.

In Singapore, there are a number of accounting requirements your business needs to fulfil if they don’t want to be penalised, which could be stressful for your company to manage and be compliant with if you are low on resources.

This is where outsourced accounting services rise to the forefront. Outsourcing professional accounting services offers a multitude of benefits that go beyond just bookkeeping. These services help facilitate the financial operations and planning of your company, allowing for better management, cash flow, and compliance, whilst giving you more time to focus on your core business goals.

Discover what different types of accounting services are essential for business success, ranging from advisory to tax filing, and why getting them outsourced to a reputable accounting firm is pivotal to propelling your company to even greater heights.

Types of accounting services

There are numerous services that fall under the blanket of accounting, all of which need to be paid careful attention to in order for your business to run smoothly and efficiently. When you engage an outsourced accounting service provider, you should ensure they can deliver the following essentials:

  • Tax Accounting & Planning: Supports with all taxation-related matters, including but not limited to tax filing, tax preparation, and tax strategy.
  • Bookkeeping: Provides regular maintenance of all your company’s important records, reports, statements, and so on.
  • Statutory & Governmental Compliance Reporting: Ensures your company is operating in accordance with local laws, such as preparing financial statements in XBRL format.
  • Management Accounting: Conducts business analysis, identifies trends and opportunities, and advises on long-term strategies.

Accounting services: understanding why to outsource

What with all the different components of accounting, a high level of effort and expertise is required in order to carry out all these tasks correctly and in a timely fashion. Doing this in-house could prove to be a huge strain on many businesses, potentially resulting in errors and inefficiencies. By outsourcing these services to a professional accounting team, your company can effectively relieve all of these stresses, giving you access to individuals proficient in various areas of accounting, be it tax management or bookkeeping. This opens up the possibility of a range of benefits for your business, such as:

  • Staying compliant with statutory requirements and regulations
  • Saving on hiring costs and recruitment training time
  • Enjoying professional accounting advisory services from experts in the field
  • Gaining a clearer picture of your company’s financial health to make informed decisions
  • Maximising your tax savings and deductions
  • Establishing an organised and automated accounting flow

What is the upside of accounting advisory services?

Accounting advisory services guarantee your business gets the best, most credible advice on any accounting issues you need to handle, no matter how technical or specific these instances may be. By nature, professional accountants have extensive knowledge of all aspects of financial reporting processes in accordance with local laws, which includes the Singapore Financial Reporting Standards (SFRS). They will also keep your business up-to-date with all the latest rules and regulations, making sure you know what is going on at all times, and thus ensuring you stay compliant in a field that is constantly evolving and changing.

What can accounting and bookkeeping services do for my business?

Bookkeepers in an accounting firm can help you to keep a record of general ledger reports, trial balances, profit and loss statements, balance sheets and schedules.

Bookkeeping also involves bank reconciliations, which compares your accounting data to what the bank has recorded, helping to identify any discrepancies in your records or possible transaction errors.

An accounting firm doing your bookkeeping also ensures that all relevant documents and information (financial statements, tax computation and supporting schedules, comprehensive profit and loss statements) are kept for easy reference. This helps to speed up the retrieval of documents for statutory reporting and filing of taxes.

With thorough and updated bookkeeping services, you can swiftly identify problems related to revenue and cash flow early, helping to avoid any adverse impacts on your business if otherwise left unchecked.

Why does my company need statutory accounting and tax compliance reporting services?

As your business grows, there will be a myriad of legal obligations your company has to comply with. These obligations include the notification of changes of share capital if new shareholders or directors are added or removed, as well as the meeting of tax and accounting requirements that could change depending on your business model and activities.

Another key obligation is the filing of year-end financial statements and board resolutions that are needed by Singapore’s Accounting and Corporate Regulatory Authority (ACRA).

A credible accounting firm assists you in the understanding of convoluted statutory requirements and ensures that you comply with the laws.

The last thing you want is an audit by IRAS digging through your past records, wasting even more of your resources and time or worse – issuing a hefty fine to your company for non-compliance and/or errors!

How can tax and accounting planning services help my business?

While staying compliant is of critical importance, outsourcing your tax and accounting services in Singapore allows you to enjoy tax breaks and exemptions that you might have been unaware of, whilst helping you develop long-term planning strategies to help you achieve significant tax savings over time.

To claim certain tax rebates and business expense deductions, you must meet a set of qualifying conditions. Many nuances are involved in obtaining these deductions successfully and legally.

Moreover, if you conduct business overseas, there are numerous tax treaties that you may be unfamiliar with. This could lead to double taxation, causing you to pay more taxes than you need to.

A professional accounting firm can advise you on all the tax benefits you are entitled to along with helping you obtain them so that you minimise costs and keep profits high.

If your business is spread across different locations, these services can also evaluate the tax consequences of cross-border transactions to improve your company’s tax position, having a breadth of knowledge of different jurisdictions. In short, they are readily equipped to support and advise on all your tax accounting needs.

How will management accounting services help my business?

Accounting doesn’t just keep you compliant with regulations, it is also a component of good business management that can help your company to grow.

A regional accounting firm has management accountants that can conduct a business analysis of past and present accounting data, as well as help analyse different sales channels, products, services, marketing activities and business models.

Management accountants will analyse the basic data and make forecasts, budgets, performance measurements and plans, then present them to senior management to assist in its operational decision making. A management accountant may also identify trends and opportunities for improvement, improvement, analyse and manage risk, arrange the funding and financing of operations and monitor and enforce compliance.

By staying up to date with industry trends, management accounting can provide and advise on long-term strategies that enable you to surpass your competitors and achieve your business objectives.

Do accounting services include accounting software?

As part of their service offerings, some outsourced accounting firms use specialised accounting software to streamline business operations – such as Xero Cloud Accounting System, which BoardRoom can help set your business up with as a Xero Platinum Partner.

It takes more than just getting the software set up in order to boost your accounting efficiencies, which is why working with a team of experts who are well-versed in the accounting system’s implementation is crucial. By assisting with set-up and optimisation, your company can then fully leverage the benefits of accounting software, whilst having peace of mind that your financial data has been transferred securely and correctly.

Choose BoardRoom as your outsourced accounting services provider in Singapore

Whether you’re running an SME or are part of a multinational organisation, hopefully this article has helped you better understand why your business will appreciate the advantages of outsourced accounting services.

At Boardroom, we are experts in accounting, helping companies from corporations to fast-growing SMEs, with their accounting outsourcing, allowing them to focus on what matters – growing their business and getting more clients.

From handling tax accounting to managing statutory compliance reporting for companies in Singapore and across Asia-Pacific, we help companies with our full suite of accounting services, allowing them to remain compliant, maximise their tax benefits and stay organised in their bookkeeping.Contact us today and empower your organisation with greater freedom through our accounting solutions.

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Maximise company formation with a knowledgeable company secretary

Maximise company formation with a knowledgeable company secretary

Maximise company formation with a knowledgeable company secretary

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For business leaders looking to expand internationally, Singapore is an attractive destination. Its competitive, high-income economy offers enticing growth prospects for new companies, and its tax and regulatory systems are purposefully designed to benefit foreign investors.

However, starting a business in Singapore can be complex, especially if you are new to the region. This is why it is crucial to appoint a highly skilled company secretary who can help set you up for success.

A company secretary with extensive tax expertise or who works closely with a tax advisor, can provide tailored advice on the ideal business structure while also ensuring your new entity meets its regulatory requirements and manages compliance risks from the outset.

In this article, we speak with Eunice Hooi, Head of Corporate Secretarial for BoardRoom Singapore, about the role of the company secretary in business today and the immense benefits of appointing a company secretary with strong taxation knowledge when setting up your business.

The role of a company secretary in Singapore

Throughout the lifecycle of a business, company secretaries undertake many important duties across various business functions. Top-tier company secretaries with tax expertise or who work with a team of tax professionals are an invaluable asset to your executive team.

Three core responsibilities that lie with the company secretary are as follows.

1. Ensuring a seamless incorporation process

When setting up an entity in Singapore, there are defined sets of pre-incorporation requirements and post-incorporation obligations you must satisfy per the ​​Singapore Companies Act and related regulations.

An experienced company secretary can guide you through every stage of incorporation, providing specialist advice on the various business structure options as follows:

  • What are the different business structures available in Singapore
  • How to choose an appropriate business structure
  • What are the legal and tax implications involved in selecting the appropriate business structure
  • What are the available tax incentives and exemptions for the chosen business structure
Ensuring a seamless incorporation process

As an example, Eunice explains “the introduction of Variable Capital Company (VCC) legislation in January 2020 has made Singapore an attractive destination for asset management in the Asia Pacific region. In addition to supporting with incorporation requirements, VCC’s in Singapore may qualify for a tax incentive application, subject to meeting certain qualifying conditions.”

In addition, the experienced company secretary can guide you in choosing the company’s financial year-end (FYE). The company’s financial year-end represents the final day of its accounting period. You may choose any date, but the common choices in Singapore include 31 March, 30 June, 30 September and 31 December.

Eunice explains that there are three key reasons why this is a critical decision for companies incorporating in Singapore:

    The company is required to hold its annual general meeting (AGM) within six months post their FYE, and file its annual returns to Accounting and Corporate Regulatory Authority (ACRA) within seven months after FYE. This is specifically in reference to private companies
    The company is required to submit an Estimated Chargeable Income (ECI) to the Inland Revenue Authority of Singapore (IRAS) within three months post their FYE. Briefly, ECI is an estimate of the company’s taxable profits (after deducting tax-deductible expenses) for a specific Year of Assessment
    If the company is a start-up, they may be eligible for the Start-Up Tax Exemption (SUTE) for the first three consecutive years of assessment. For a company to maximise the benefits of this tax exemption, it is best to make the company’s first basis (tax) period as long as possible within the 12-month period

    “Therefore, you may consider choosing the first FYE to fall on the last day of the 11th month from the date of incorporation to maximise the coverage of the SUTE benefits,” says Eunice.

    For example, if the company is incorporated on 15 May 2023, they may choose its first FYE date as 30 April 2024. This means that the company’s first set of accounts will close on 30 April 2024. As a result, the company’s basis (tax) period will be from 15 May 2023 to 30 April 2024.

    Staying up to date with local regulations

    2. Staying up to date with local regulations

    By staying informed across all the local laws, rules and regulations pertaining to your organisation, a company secretary helps you remain fully compliant for the life of your business.

    Good company secretaries are extremely familiar with the Companies Act and regulations set by the Accounting and Corporate Regulatory Authority (ACRA), as well as the listing rules and reporting requirements of the Singapore Stock Exchange. They are responsible for ensuring the timely submission of regulatory reports and providing astute advice to directors and senior managers on company compliance matters.

    As a result, your company’s risk of being penalised for non-compliance is drastically reduced.

    To remain informed about shifting regulations, company secretaries usually take the initiative to engage with regulatory authorities on a regular basis and/or participate in the consultation papers issued by authorities. In doing so, they gain a solid understanding of changes in advance and can assist your organisation in achieving compliance before the changes come into effect.

    3. Maintaining productive relationships with stakeholders

    Effective company secretaries maintain close relationships with the key stakeholders in an organisation (for example, directors, regulators and senior management). Depending on your company’s unique structure, operations and needs, these relationships will look different.

    Considering the high-level advisory role your company secretary will need to perform, appointing a provider with exceptional interpersonal communication and relationship management skills is essential.

    Maintaining productive relationships with stakeholders

    An overview of corporate tax in Singapore

    On the World Bank’s global Ease of Doing Business ranking, Singapore consistently comes in second. One reason for this is the nation’s investor-friendly tax system.

    Singapore also offers a variety of incentive schemes that cater to different types of businesses. Currently, and as long as you satisfy the necessary criteria, some notable schemes your business could take advantage of include:

    • Start-up tax exemption (SUTE) – a tax exemption for new start-up companies of a 75% exemption on your first $100,000 of normal chargeable income* and a further 50% exemption on the next $100,000 of normal chargeable income* for the first three consecutive tax years.
    • Partial tax exemption – a 75% tax exemption on your first $10,000 of normal chargeable income* and a further 50% exemption on the next $190,000 of normal chargeable income* [*Normal chargeable income refers to income that is subject to tax at the prevailing Corporate Income Tax rate of 17%.]
    • Global Trader Programme (GTP) – a concessionary tax rate of 10% or 5% for well-established companies that have set up their regional trading base in Singapore
    • Regional/International Headquarters Award – a concessionary tax rate of 10% or 15% apply to the qualifying income of companies that establish their headquarter activities in Singapore.

    The Singaporean government regularly introduces new tax incentives to spur economic growth and build corporate resilience, with many exciting initiatives recently announced in the Singapore Budget 2023.

    The benefits of appointing a company secretary with strong tax knowledge

    If you engage a company secretary whose expertise is limited to company incorporation, you may fail to capture all the valuable growth opportunities available. Company secretaries with robust tax knowledge, or work side by side with an in-house tax expert, can add more value to your new business venture by:

    • explaining the different legal vehicles you can incorporate as, including how they work and their suitability for your situation;
    • developing a tax-efficient corporate structure based on your wider operating model and supply chain arrangement, ensuring your business group pays the lowest fair share of tax while extracting maximum profit;
    • determining your eligibility for available tax incentives; and
    • liaising with executive staff and regulatory bodies to develop a group-wide governance framework that incorporates beneficial, fully compliant tax and transfer pricing strategies.

    If you are branching into Singapore and your existing company has a large, complicated structure, these value-add opportunities can help minimise confusion during the incorporation process while also ensuring a bright, prosperous future for your new entity and wider corporation.

    How to choose the right company secretary

    How to choose the right company secretary

    Your choice of company secretary can significantly impact the short- and long-term performance of your business in Singapore. To ensure the support and advice you receive is of the highest quality, ensure your company secretary has professional qualifications and a wealth of experience to their name.

    If you have plans to grow your business throughout the Asia-Pacific region, consider engaging a global company secretary services provider who:

    Has offices located throughout the region
    Has a long track record of helping businesses thrive
    Offers a full suite of complementary end-to-end corporate services, especially a tax advisor

    Providers who fit the above criteria can provide prompt, highly customised advice and support for all your business functions via one point of contact, resulting in a smooth, clear and productive service experience.

    For more than 50 years, BoardRoom has been helping businesses flourish in Singapore and beyond. Contact our specialists today to discuss how BoardRoom’s world-class corporate services can help you reach your growth goals.

    Contact BoardRoom for more information:

    Eunice

    Eunice Hooi

    Head of Corporate Secretarial

    E: [email protected]

    T: +65 6536 5355

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