In Singapore, accounting firms play a vital role in ensuring the city-state’s economic growth and overall development. The accounting industry is the focal point of economic activities, from business ventures to financial transactions.
Overview of the Accounting Industry in Singapore
As one of Asia’s leading business and financial destinations, Singapore holds a prestigious reputation for being a top-notch accounting hub.
At present, Singapore is experiencing steady demand for financial services and increasing pressure to enhance accounting roles. But because of its strong global standing and positive international outlook, it remains to have a competitive advantage and a dominant position as the focal point for finance.
That said, the city-state aims to provide the highest quality accounting services to fuel growth and economic prosperity.
If you are looking to engage an accounting firm to render services for small to medium-sized businesses, here are some tips to help you choose the most suitable accounting firm.
A licensed accounting firm ensures credibility and professionalism in order to provide you with the services you’ll need while meeting industry standards set by the government.
According to the Accountants Act, all entities providing public accounting services must first register with ACRA. Registered firms are then governed by the Institute of Singapore Chartered Accountants or ISCA to oversee qualifications and preserve high standards of professionalism.
An ideal accounting firm should therefore be registered with ACRA and have a team of accountants that abides by ISCA principles.
While some firms focus on core offerings, other mid-tier accounting firms in Singapore offer comprehensive services like accounting, bookkeeping, financial reporting, auditing, tax planning, managing financial statements, and many more.
Another consideration is the firm’s taxation knowledge. Making mistakes in tax documentation can create time-consuming and costly problems. That’s why it’s crucial to partner with accounting firms with a firm grasp of Singapore’s taxation system.
Having access to complete service offerings is advantageous, but you need to ensure that their specialisation aligns with your company’s objectives.
Size of the Firm
Besides their specialisation, you also have to consider the size of the firm. Do they have a big team to help you accomplish all your accounting tasks?
Rather than assigning one accountant to handle multiple functions, it will be much more efficient to provide different experts to aid in various tasks. Therefore, a collaboration among individuals with diverse experience and expertise can add value to your business.
Experience and Expertise
The last factor you need to consider is the firm’s expertise.
You can gauge their expertise through their years of experience in the industry. Based on their existing portfolio and past client relations, you can evaluate whether they are a good match for your company.
What’s more, you can tap on your connections and get recommendations from friends, relatives, or peers. In addition, referrals from other business owners and positive online feedback can help you make a more well-informed decision in selecting the perfect accounting firm.
Conduct an Interview
While doing your own research can give you ample information about a potential firm, a more practical approach is to conduct an interview.
Interviews can provide an in-depth look at the company, how they operate, and their existing workforce. Through their insights, you can better grasp the services they offer and how they can benefit you. In the same light, you can also use this opportunity to share your requirements and expectations as a business owner so they can provide a more concrete strategy to help you manage your finances and ultimately meet your goals.
Understand Industry Standards Placed on Local Accounting Firms
Although finding the ideal accounting partner can help you navigate your business, you still need to take an active role in familiarizing yourself with the ins and outs of the industry.
One of the most critical aspects you need to know is the country’s accounting standards.
In Singapore, the standards are based on the International Financial Reporting Standards (IFRS) and are localised in the form of Singapore Financial Reporting Standards (SFRS).
Due to the complexity of the standards, it may be challenging to grasp. But here are some of the basic concepts you need to know about it:
- Financial statements should be prepared under the accrual accounting basis, wherein the effects of all transactions are recognised at the time of incurrence rather than at the time transactions are paid. This enables accountants to get a clearer picture of the entity’s economic resources, claims, and performance. It also gives them an insight into the company’s operational efficacy as influenced by the market’s changing trends.
- Companies can apply for SFRS for Small Entities (SE) if they meet the following criteria: total revenue should not exceed SGD10 million, total assets should not exceed SGD 10 million, and the total number of employees should not exceed 50. What’s more, small businesses cannot be publicly accountable. If eligible, small entities can benefit from simpler preparation of financial statements and reduction of disclosure requirements.
- Regardless of the size, Singapore authorities mandate all companies to submit annual reports within the three months before the fiscal year ends. The report should contain comprehensive income statements, balance sheets, company details, shareholder details, AGM and annual return dates, and cash flow statements.
- Any business in Singapore that fails to comply with the standards will be subject to penalties such as arrest warrants and fines. That’s why it’s important to find a firm that understands the standards and can therefore help your business thrive.
Invest in the Right Accounting Firm
Finding the best accounting partner for your business is essential to ensure your company’s survival. Improper financial management and non-compliance with accounting standards in the hands of an inexperienced firm can result in business failure.
Corporate Services Singapore is an experienced accounting services provider for local and multinational companies that provides accurate record-keeping and in-depth financial monitoring to help manage your finances and eventually grow your business.
Our team of accounting experts is committed to meeting your requirements and bringing a positive impact on your overall operations.
Contact us today to know more about how we can lead your business toward success!