The Inland Revenue Authority of Singapore (IRAS) requires businesses to maintain accurate records and accounting of their commercial dealings. These accounting records must be preserved in order to create honest and fair financial statements for the business and to be able to explain the company's transactions and financial status. This article provides a detailed overview about accounting records and answers the question, “how long to keep accounting records in Singapore” for Singapore companies.
What Accounting Records Should A Singapore Company Keep?
Companies must maintain a proper record of their financial transactions. The following are the accounting records that a Singapore company must keep:
Source records that support every business transaction, including bank statements, receipts, invoices, vouchers, and other pertinent documents sent to or received from clients;
Accounting ledgers, schedules, and journals that detail the assets, liabilities, income, and profits and losses of the company; and
Any further written documentation of business-related interactions.
IRAS has also provided a record-keeping checklist for Singapore companies. Take note though that the required records may be different if the company is GST or non-GST.
How Should A Singapore Company Keep Its Accounting Records?
A Singapore company may keep its accounting records manually or electronically, as long as these records of financial transactions can be easily and correctly audited.
If the documents are going to be retained manually in physical form, they should be arranged and kept in a legible manner. If the records are held electronically, the business must make sure that the necessary internal controls are set up to guarantee the accuracy, dependability, and integrity of the electronic data.
The First Schedule of the Evidence (Computer Output) Regulations, which outlines requirements for archiving imaged business records, may be reviewed by Singapore companies.
How Long To Keep Accounting Records In Singapore?
When it comes to the question, “how long to keep accounting records in Singapore?” Singapore companies should know that account records must be kept for at least five years following the end of the fiscal year in which the related transactions were made.
For instance, if a company's fiscal year finishes in December, records for the financial year that started on January 1 and concluded on December 31, 2022, should be preserved until at least December 31, 2027.
Where Should Singapore Companies Keep Their Accounting Records?
Singapore companies are required to maintain their accounting records at their registered office or any other location that the company directors deem appropriate. The directors should always have access to these records for review.
What Are The Consequences Of Non-Compliance In Keeping Accounting Records?
The company and any relevant officer may be liable to a 12-month jail sentence or a $5,000 fine, as well as a default penalty under the Companies Act if they fail to maintain accounting records in a correct manner. Singapore regulations consider accounting records to be improperly kept if:
The records are not preserved;
The records are not kept for a minimum of five years; or
The records are not kept in a suitable location or manner.
Additionally, keeping inaccurate records could be a tax violation. This violation could lead to IRAS denying the company's capital allowances and expense claims.
According to the Income Tax Act, those convicted of improperly maintaining records linked to income taxes may also be subject to a fine of up to $1,000 or a jail term of up to 6 months.
Need Professional Accounting & Bookkeeping Service Help?
It is crucial to keep accurate records when conducting business in order to make sure that your organization complies with Singapore regulatory requirements and to be able to manage your company's finances more effectively.
For peace of mind, you and your team can benefit from professional accounting and bookkeeping services, which will ensure that your organization complies with all the accounting and financial record-keeping requirements.
SJH Advisory’s Accounting & Bookkeeping Services can help you maintain your books by providing solutions based on your company's needs. Get in touch today to start working with an expert and experiencing first-hand the results of their professional corporate services.
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