Managing finances is the majority of things most companies can do, especially growing the business where you are required to wear multiple hats. A great system must enable clear accounting, avoiding tax problems, and reducing risks. This study details the challenges and importance of accounting on small business performance, discussing the accounting solution deemed suitable, and then gauging such solutions’ functionality performance towards solving the accounting matters experienced by small businesses in Singapore.
Singapore has long been a popular location for overseas entrepreneurs to establish businesses. A small business is a key catalyst for innovation and job creation in many developed countries, including Singapore. Singapore is singularly the best country for starting and doing business in the world. Favourable economic factors and the startup-friendly environment, primarily influenced by the government’s strong support, underpin many entrepreneurs in Singapore to launch small businesses, knowing their ventures will have the support they need to grow the company. According to government statistics, small businesses in Singapore make up around 99% of all enterprises, employing 65% of the workforce in Singapore. With 80% of Singaporeans not interested in entrepreneurship, the percentage of people expressing an interest in starting a business, according to the global data survey, is 16%. The research shows that a mere five out of ten small firms manage to survive beyond five years, leaving many startups with a large share of failures. This is why accounting services for small business Singapore is important.
Overview of accounting services for small businesses
There are numerous types of accounting firms, such as a traditional accountant, a modern accounting firm, and various essential services like bookkeeping, Xero, and QuickBooks accounting software. These firms may have their uniqueness and individual benefits, for example, the ability to provide various classes of accounting services to different types and sizes of companies, the ability to cater niche accounting solutions for startups, cost-effectiveness, or the provision of high-value services from their specialization in providing professional services and guidance.
In Singapore, the Accounting and Corporate Authority (ACRA), a public accountancy monitoring body, estimates that a default business can take over 8 hours a month to keep the books and records up to date. Such a large investment in administrative activities instead of sales and business expansion can slow down the startup’s development. Moreover, poor financial decisions can be made as well. To suppress such havoc, a professional accounting and bookkeeping firm should be sought to be “partners” and assist in the daunting task.
Are you an SME or a business owner who is time-poor, does not have any accounting background, or is struggling to do your own accounts? Your burden can be alleviated by partnering with a reliable accounting firm, especially when there is no restriction on which company size or type to do so.
Accounting is a critical part of a business, but it has also become more challenging with growing compliance and reporting needs. The need to stay agile, as well as the requirement to make decisions quickly, has put pressure on CFOs and finance teams. Managing these challenges requires an integrated approach using technology and data.
Importance of accounting solutions for small businesses in Singapore
Researchers found some gaps from the review of available articles in the area of accounting solutions available to businesses and also from practical experiences. However, despite other research conducted, the findings will not be relevant to the setting of the small business community in Singapore. The environment in Singapore is entirely different due to legislation, and the volume of transactions being completely different from many other countries.
Having the most basics in order and finding workarounds for the rest would not help businesses in any way. The need for strategic information is part and parcel of any quick decision making for the future of the business. With online accounting software, which was initially meant for multi-location sharing of information or freelancers maintaining lower volumes, it seems to upgrade environments and maintain high volumes considering the computing processing capacities that can be leased on tap.
In Singapore, the Companies Act compliance makes it mandatory for companies to appoint company secretaries and directors to maintain accounting records and prepare unaudited accounts and audited accounts in accordance with financial reporting standards. This accounting requirement should not just be seen as another compliance, but as an opportunity for managerial decision making. As such, choosing the right accounting software could become a make or break decision not just for today, but for the future of the business.
In Singapore, small businesses make up more than half of the GDP, with a simple majority in the employment contribution by enterprises. This information was supported as part of the budget, where the government proposed tax exemptions for companies with an annual turnover less than SGD 5M from YA2020 to Y2024.
From the start to the end, the function of accounting stays intact. Moving from Italian Renaissance to double entry bookkeeping in the medieval times to the present accounting technology, it is safe to mention that accounting was one aspect of trade that was at the forefront of business operations.
Top Accounting Solutions in Singapore
Xero is a reliable and easy-to-use online accounting software. It was developed for small-sized enterprises. It is equipped with one of the fastest-growing innovations in the digital accounting world. Xero provides its users with access to accurate financial information anytime and anywhere. Some of the exceptional features of this new innovation are: automated bank feeds, tracking of expenditure automatically, enabling multi-currency transactions, creating dynamic and accurate reports, on-time bill payment, price level tracking, and efficient management of inventory. Xero aims to serve the small-scale businesses, thus providing them with essential financial tools needed to run any business from anywhere. In a nutshell, Xero caters to the following: retail trade, software trade, and other communication and media agencies. Really, this platform is essential for all businesses of any class.
QuickBooks by Intuit provides easy-to-use and simple cloud accounting that is designed mainly for small and medium-sized businesses. It is also suited for use by freelancers, such as designers, web developers, real estate professionals, and many more. QuickBooks accounting software can perform many of the following tasks: invoice creation, creation of expense reports, skillful management of sales and income. It also organizes, tracks, and simplifies payroll processing and deduction of payrolls. It breeds your business with cloud-sync and protects your data with 24/7 security. It tracks sales and creates professional invoices. In addition, QuickBooks can be used to monitor expenses and deepen analyses with real-time reports.
In this section, we have dug deep to explore some of the top tech-savvy accounting solutions in Singapore. It has been carefully chosen based on these key factors: features, costs, reviews, location, and usability. They are:
Cloud-based accounting software
All business entities—large, small, and newly created—will require some form of accounting record-keeping. An important decision is the choice of accounting solution, especially for small and micro-businesses. There is a range of accounting solutions available on the market, including the use of dedicated accounting software, use of spreadsheet-based accounting records, and outsourcing accounting functions to bookkeeping and accounting firms. Of these options, the use of dedicated accounting software allows small business operators to stay in control of their business operations and understand the business-related numbers first-hand. It also allows for meaningful and effective communication with accounting and finance professionals. Given that many small businesses have limited resources and a focused operating plan, it makes sense to explore affordable and user-friendly accounting software for such businesses. In this paper, the focus is on the discussion of affordable dedicated accounting software, which is often cloud-based for easy access, easy to use, and user-friendly. These features are particularly important for first-time and small business users with minimal operational and/or accounting experience.
The first accounting compilation method we will examine is the use of dedicated accounting software, focusing on the cloud-based programs available in the market. Cloud-based accounting software is an alternative to the traditional accounting software that is installed locally on a computer. The software is hosted on remote servers, which users access using a web browser. The move towards cloud-based computing has become a significant trend, and accounting software has made significant inroads in this area. Benefits of cloud-based accounting programs include anytime, anywhere accounting access, user-friendly web-based interfaces, reduced hardware demand, and regular updates from the provider. However, data privacy and security are key concerns for cloud-based accounting software.
Outsourced accounting services
The basic accounting and tax services package ideally includes bookkeeping throughout the year, fixed asset and depreciation schedule management, payroll accounting, year-end financial statements and XBRL filing of the financial statements to ACRA (Annual Corporate Regulatory Authority), as well as the corporate income tax filing and the shareholder’s personal tax returns. The other alternative could be to take up secretarial services in addition to the accounting and tax services package. Some other alternatives that might seem to uplift the service package would be the management reporting and cash flow management services.
Having someone internal taking care of your business’s numbers and, especially, preparing your financial reports can sometimes become a bit expensive. For a small to mid-sized company that does not ideally need an internal accountant or a team of them to manage their financials, becoming a client of an accounting firm can become a reality by outsourcing this service. By having the chance to become a client in other accounting firms, your company can benefit from an increased number of services provided on your financials, as well as potential discounts to the services provided. The first service package you may find attractive would be the accounting and tax services package.
Virtual CFO services
Virtual CFO services near me range from a one-time site visit accompanied by a phone consultation within two weeks of the visit to periodic online or telephone conferences with or without a site visit. Therefore, there are two potential areas for future expansion of virtual CFO services. The first is some virtual CFOs specialize in the provision of strategy and operations-related services but are not chartered accountants or chartered financial analysts who are qualified to render finance execution and governance-related services such as ensuring accurate and timely financial information reporting. Future service providers could consider developing an online platform that enables virtual CFO service providers to create profiles advertising their qualifications and experiences, and small businesses in the market for virtual CFO services to browse and select qualified virtual CFO service providers based on their needs. A timely expansion to such a platform would be the implementation of a schedule for virtual CFO marketing virtual CFO services to perform online or telephone consultations around financial and budgetary matters with small businesses.
While it is not uncommon for companies to have virtual finance professionals, it is likely that a significant proportion of such professionals have only performed one-off financial reporting, corporate finance, corporate governance, and wealth management services such as preparing budgets, business plans, and valuations. They may also have conducted financial due diligence for mergers and acquisitions.
Some growing businesses may not require hiring full-time CFOs. An interim measure for such companies may be to engage a firm that provides virtual CFO services on an as-needed basis until the point when it is necessary to hire a full-time CFO. These firms are able to offer flexible and responsive services at a fraction of the cost in two main ways. They are able to connect you with finance professionals who possess qualifications and expertise that you may not be able to access otherwise. Only hire a virtual CFO when you have a project for them. This way you do not need to worry about finding work to keep a full-time CFO occupied.
Benefits of Accounting Solutions for Small Businesses
For small and medium-sized enterprise (SME) owners, accounting is hardly ever fun. It is time-consuming, complex, and highly stressful. It is also a testimony of how well you’re doing with your company – financial management is, after all, a key tenet of business success. The tide of compliance regulations to adhere to in Singapore certainly doesn’t make things easier to swallow. As a business owner, you need to ensure that you are in line with the Singapore Financial Reporting Standards (FRS), the Singapore Financial Reporting Standard for Small Entities (SFRS for Small Entities), Singapore Institute of Accredited Tax Professionals (SIATP) rules, and the stringent regulations mandated by the ACRA. A breach in any of these could warrant a severe penalty. Bespoke to the individual needs of various businesses, professionals like accounting and bookkeeping companies will assist in outsourcing requirements. While it is certainly beneficial to have a professional on board, when starting out with your business, you may not have the financial resources to do so. Let financial guardians research simple accounting software solutions that cater to the accounting needs of small businesses if you’re currently living off instant noodles.
A small business in Singapore can range from 1 to 200 employees, and industries like beauty and health services, retail, and F&B, among others, all fall under this category. However, running a business is no mean feat as it involves a host of administrative responsibilities, of which accounting is key. In the digital era, it makes sense for administrative tasks to go hand in hand with technology, so consider one of these accounting solutions and let them do the heavy lifting for you. Why are countless business owners already using accounting software services like these? For one, it simplifies a tough process, making it easier to handle. On top of that, these products help generate an overview of the business, provide better options for integration, and, ultimately, help ensure that everything is legally compliant.
Enhanced financial management
The financial management will cover both real-time and long-term fiscal health of the company along with the crucial information necessary to make business income and losses. The present financial management challenges have resulted in business opportunities such as providing advice reviews on the wealth of economic indicators and the important resources necessary. The business agenda will rebuild the country’s economic strength, thereby reducing the unsustainable deficits. Businesses are concerned about various key economic and competitive measures that shape the business agenda. Even individual accomplishments that mold the professional career are also important along with the functional performance where the business takes place.
Effective accounting solutions provide a comprehensive architecture designed to develop and build strong financial management functions in the organization. Business intelligence is an important tool that helps the organization understand the various aspects of revenue generation and the associated procedures with it. The reporting ideas on the accounting pack can analyze the daily report that will give feedback to the user in a systematic manner. This will help in reducing task times and also increase team productivity. Various cloud systems with unique features are available with accounting that provides true openness on the work culture followed. The Canadian finance analysts with innovative features help in constructing different possibilities.
Time and cost savings
Time and cost savings. The time required to arrange accounts can be included even when accounting professionals go on to streamline their assignments, invoices, and tax submissions. With intelligent financial guardians, you can save a considerable amount of time preparing financial and meeting accounting standards. There are appropriate documents that record the date, transactions incurred, and price. If the invoicing structure contains contracts, live balance, and balance sheet updates, you can prepare tax returns and payment transfer documents faster. Also, having the balance sheet balance at the end is also easier and 70 percent faster, which is a significant personnel retention for firms preparing financial guardians because the staff is busy in more complicated tasks. The problem with accounts remains deep in costs. Conversely, it takes time to prepare an annual lease account for owners. If we apply these “complicated” tax obligations, we will also have a certain time-based decrease, and quantity will be affected by the “time and input” employees and rating reviews. However, if the cost savings target time is less than $2,000 per employee, and fees for accounts located in Queensland range from $300 to 10 per year, this would be a significant saving for smaller companies with a fixed value of $500. Thanks to the high cost of accounts, paying less than 8% saves over $1,800 on average, not only time but also employees. With a current budget from a Singapore account, savings can be formulated to achieve a minimum cost of 9 I time a in the Singapore financial report, saving an average of over 17,000, due to effort and cost.
A cloud-based financial guardian in small business is a strong component that allows small establishments the same power, productivity, and performance as their large business counterparts. They can plan, bill, drive maximum financial performance, help to understand tasks easily, maintain day-to-day work, and support the activities that allow companies to recognize such advantages. Small business guardians can introduce technological advancements that can make the company more efficient and competitive. The tools range from FAST solutions, Small Business Budgets, and Rumors and Failures.
Compliance with regulations and tax requirements
There are a lot of rules and regulations that companies must follow in Singapore to keep them compliant and in good legal standing with the Financial Reporting Standards (FRS) and Accounting Standards (SSA), International Financial Reporting Standards (IFRS), and all other important rules and regulations when it comes to taxation. These rules and regulations are required for director’s reports and audit reports to be in place, which show transparency with many Singapore standard financial reports. These important reports must meet the standard requirements and must be submitted to the Accounting and Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority of Singapore (IRAS), the local tax authority. ACRA reports focus on the accounting, taxation, forecasting, financial consulting, and auditing compliance of Singapore’s Companies Act and Singapore Taxation Law requirements for SMEs.
It is important to keep compliant with the rules and regulations set by governing bodies and the tax requirements in Singapore. Different businesses have different types of compliance, tax, and accounting needs based on their revenue, number of orders and purchases, where the goods and revenue are sourced, and the amount of money they are spending to expand and maintain their companies. Therefore, one of the factors that SMEs need to consider for their accounting and bookkeeping services is to outsource a trustworthy and reliable accounting service provider to save time and help them focus on running their business instead of working on time-consuming accounting tasks.
Choosing the Right Accounting Solution
Small businesses are usually thinly staffed, and every individual in the organization has to make significant financial management decisions because capital is scarce. Accounting information helps managers to monitor business progress and identify problems. However, strict accounting rules can be intimidating and time-consuming. Prior research finds that many small businesses in Singapore invest in accounting solutions to minimize errors and create more polished documents. However, in reality, some small business owners still waste resources on handwritten accounts. Furthermore, these businesses are in danger of becoming uncompetitive as they grow. Large businesses can generate information to perform a competitive analysis and inflate numerous advantages at the expense of the smaller players. We contribute to the accounting literature by examining how managers of up and running real-world businesses arrive at this important decision. More importantly, our research also addresses firm revenue and employee concerns. Furthermore, while a business inventory can aggregate financial data, no existing study examines the preference of individual owners.
This study investigates how small business owners make decisions about their accounting solutions. We hypothesize that business size information and time-saving preference will be positively associated with accounting solution complexity preference, but financial education will have a negative impact. We collect data from more than one hundred companies in Singapore. Our results support the hypotheses and reveal several significant trends that can inform policy and marketing strategies.
Assessing business needs and requirements
Accounting requirements can vary widely. Anything from handling simple bookkeeping requirements to tracking, managing finances for separate business entities, and other dimensions related to employment or online store operations. The type of business requirement has a substantial impact on the accounting system that will match the company’s preferred scale and business processes. For example, simple double-entry accounting provides a straightforward approach mostly suitable for businesses with low levels of complexity, activity, and financial transactions. But as businesses shift from basic day-to-day accounting practices, critical processes such as invoicing, stock control, recording and analyzing costs of goods sold, performance measurements, and related transactions progressively become more complex and inadequate. This leads to an increased possibility of errors, longer reporting cycles, and development can easily be underestimated. To avoid this, the selection of an accounting system must match the business’s complexity and growth.
All aspects of the accounting process, including the software selection, involve developing a comprehensive plan and understanding the primary business’s needs, requirements, intended use, and responsibilities. It is also important to take this opportunity to decide who will be responsible: is it going to be you or another employee (in-house) or an external accountant or accounting firm, but also ensuring the application chosen can help the business grow without the need to change software. Defining the business’s key requirements before acquiring or developing the accounting solution is a crucial part of the accounting software selection process. It ensures that the accounting solution chosen fulfills the objectives and requirements of the business, while also reducing the total cost of ownership by optimizing the efficiency of accounting and business functions. Documentation of key business requirements should also involve clearly articulating your company’s expected growth over the next few years. This growth can lead small businesses to move from a single-user accounting system to an accounting solution that acts as an integrated system across all departments as it expands. It can also involve implementing new layers of security to adhere to industry and regulatory compliance standards. This should ensure that the new accounting software solution enables current and future business operations and success as Singapore’s small and medium enterprises steadily prepare for growth.
Evaluating features and functionality
Though all accounting packages allow users to enter basic transaction details and turn them into management and financial reports, accounting practice clients are first and foremost business managers. So, an intimate knowledge of the specific business processes that separate the client from their competitors will enable an appreciation of which software features the client will find invaluable. One practitioner describes his experience as a sales call on a retailer. Remembering how the customer was struggling with barcoding items on receipts so that transaction data could be fed efficiently into the accounting package, he instantly realizes that the best choice is MYOB with its barcode processing feature. To understand business processes, one needs to be conversant with the industry by attending trade shows and using the trade press to avoid data brain freeze when trying to consider all choices. Another useful strategy for ensuring that business solutions are pinpointed includes brainstorming sessions that stimulate knowing by doing, as this helps the staff of accounting practices to envision innovative ways in which leading-edge technology can be leveraged to streamline business processes and provide customer value.
Selecting the best accounting software depends on the individual needs of accounting practices. Being proficient in filling in forms, a package with more sophisticated features may not be necessary. A package that includes features that relate to the client’s industry, e.g., job costing for direct labor and materials, may be overly relevant. One that includes stock management and control for distributors is the key criterion. The needs of the client should be the primary focus. However, these needs will remain immune from the danger of being underestimated, now that best practice has done away with the need to eliminate those features that do not spark immediate enthusiasm in the client. Instead, instant interest is creating greater opportunities to identify features and functions that were not obvious before. A needs analysis before the needs analysis saves time and almost instantly reveals the client’s software choice along with its best feature. Every choice set includes.
Considering budget and scalability
As a small business owner, it is also important to understand the difference between costs that are calculated per business and taxes that are calculated per transaction. There could be a lot of legal hassle if important papers are not filed properly. Moreover, due to what has come to be known as the “transparency drive” by the government, Singapore has made changes in how it handles small companies. The Accounting and Corporate Regulatory Authority (ACRA) has ended the practice of letting almost 35,000 small companies appeal for an exemption to submit finances annually, marking an increase of close to two-fold since 2004, by moving to a “Simplified Annual Return” regime which may lead to these companies being charged with higher annual regulatory fees. Small firms in Singapore that have either generated an annual turnover of no more than S$10 million or the Balance Sheet Total of no more than S$10 million will be required to go in this new direction when preparing Annual Returns beginning 3rd March 2024.
While QuickBooks Online and Xero have budget-friendly prices, this could be offset by the number of additional modules and users added in the future. While QuickBooks Online is advantageous for businesses wanting to get started at a more affordable rate, Xero charges an additional $20 per month for 2-5 users. More than 5 users will add another $24.60 every month. Then add GST to all those costs. Both solutions provide you with a free trial period, but be sure to plan out your future accounting management processes and costs when deciding which solution scales well with your business plans and budgetary constraints.
