All companies follow specific procedures and timeline to close their accounting books and prepare financial statements for submission to ACRA.
The financial year close varies from companies (i.e. it can be any month of the year)
Singapore is not an exception since its tax year begins from 1 January to 31 December (known as Year of Assesment (YA)).
These stipulated timelines guide various processes such as tax filing and annual regulatory reporting to ACRA.
These are catered to Singapore incorporated companies once a year.
The process will involve for the past one calendar year.
In a nutshell, it means that the company closes it books once in a year and outsource this task to an local accounting firm like us.
The outsourced accountant will prepare the in accordance with Singapore Financial Reporting Standards and also in the filing of annual returns.
As compared to monthly, quarterly or half-yearly accounting services, annual accounting services involve data entries and compilation of data over an entire year.
This approach is quite effective for the company with little transaction volume though it has both pros and cons.
a. An analysis of a complete set of annual data provides a complete financial standing of the company. Annual accounting occurs in once a year thus its relative cost when compared to monthly, quarterly or half-yearly accounting services is relatively small.
b. The accuracy of data is effectively enhanced since lesser mistakes are made when all data are recorded at one go. Yearly accounting ensures all taxation details are covered extensively and enable easy filling of tax returns.
Most companies with many shareholders have annual general meetings (AGM). Any shareholder attending the meeting would expect to receive comprehensive financial statements. This expectation has to be met to ensure efficient running of business and profitable in long run.
Each company has its unique practices and goals.
Some companies, especially SMEs and startups, need to analyse the very latest trends in the market to plan for the next phase.
This necessitates a continuous accounting process that cannot be postponed until the end of the year.
On the other hand, most large enterprises have long-term goals and targets; they usually only need to analyse the data once a year.
This approach is disadvantageous to most of the companies as it creates a broad generalisation on trends that vary significantly all over the year.
The cost is quite high for a company that has relatively small amounts of transactions. This is because contracted companies have minimum rates for all tasks they undertake.
It would be much cheaper to pay a salary to one accountant on a full-time basis than to outsource annual accounting services.
All the aspects will vary from one business to another. It’s the practices and policies in a company that would dictate on whether the use of annual accounting services is beneficial.
We provide annual and for more information and getting in touch, simply send us an enquiry today!