Financial year end checklist for small business owners

Sep 21 2019
Financial year end checklist for small business owners

Most business owners choose the end of the calendar year (31 December) as their financial year end (“FYE”) for simplicity and convenience. Regardless of the FYE, there are two requisites to fulfil before business owners can meet the annual compulsory filing requirements of the Accounting and Corporate Regulatory Authority (“ACRA”) and the Inland Revenue Authority of Singapore (“IRAS”).

The requisites
Business owners need to complete the following after the close of each financial year:

A. Finalise the company’s accounts for that financial year
B. Compute and file tax returns to IRAS

Accounting and Annual Filling with ACRA and IRAS

A. Finalise your company’s accounts
Traditionally, finalising your company’s accounts can be a time-consuming process. With the advent of cloud accounting software, a growing number of small business owners are opting to record their business transactions in-house instead of outsourcing this work. To ensure timely finalisation of year-end accounts and accurate filing, small businesses will still seek professional assistance from their accounting advisors at the end of their financial year to:


1. Ensure completeness of accounting entries for the FYE

It is common for businesses to receive invoices for payments and expenses that are incurred for revenue that could be earned in the next financial year. Similarly, if the business paid for insurance premiums on its fixed assets and the period of coverage extends beyond the current financial year, adjustments to the accounts will have to be made. There could be other adjustments that apply to your company, depending on your business.

2. Prepare financial statements

After the accounts are finalised, a set of financial statements needs to be prepared in accordance with the Singapore Financial Reporting Standards. These financial statements have to be tabled at the AGM and will be used for statutory filing with ACRA and IRAS. Essentially, financial statements show a snapshot of the business’ financial health and comprises of the Statement of Financial Position, Statement of Comprehensive Income (commonly known as the profit and loss statement), Statement of Cash Flow, and Statement of Changes in Equity. Accompanying disclosures are also included.

3. Holding AGM/ Filing Annual Returns (AR)

For FYE before 31 August 2020 - A Singapore incorporated company has to hold its first AGM within 18 months from the date of incorporation and hold subsequent AGMs at yearly intervals of not more than 15 months. The company has to table its financial statements at the AGM and file its AR within 30 days from the date of AGM.

For FYE on or after 31 August 2020 - A listed company has to hold its AGM within 4 months and file its AR within 5 months after its FYE while any other types of company has to hold its AGM within 6 months and file its AR within 7 months after its FYE. AR can only be filed after:

(a) AGM has been held;

(b) Financial statements are sent if the company need not hold an AGM; or

(c) FYE for private dormant relevant company that is exempted from preparing financial statements


B. Compute and file tax returns to IRAS

Talk to a qualified tax advisor who can help compute the tax payable and identify eligible tax deductions, exemptions and grants that will help lower your tax liabilities. If you own a sole-proprietorship or partnership, find out which are the allowable business expenses for tax deductions to avoid errors in your personal tax filing. If you have an employment pass that is tagged to your company, seek advice and put in place an efficient remuneration plan to better manage your tax payable. 

If you would like to learn more about how AccountServe can help, please contact us