December is around the corner and it’s time to focus on your year-end closing. Your accountants will, no doubt, be hard at work to collate key information with your stakeholders and have an overall review of your company’s cash flow, budget, and performance.
These are stressful times, but luckily, there are ways to avoid that. Here are 4 ways you can take the pain out of compiling your year-end financial statements in Singapore.
1. Have a robust review of the revenue recognition policy
A lot of the time, challenges occur because of simple oversight. When a business is involved in a simple case of selling products and recognizing revenue, accounting is straightforward and easy. Revenue recognition gets complicated when the business needs time to produce the said product. It is therefore advisable for the company to determine when control of goods and services will transfer and when the accounts should recognize revenue.
A more detailed explanation can be found on IRAS’s website here.
2. Ensure you have efficient internal communication
The last thing you’d want to do is to follow up with various business units to explain their business activities that may have occurred months ago. Make sure everyone is on board and aware of the importance of end-of-year processes. The lesser confusion, the smoother and more painless the process will be.
3. Consider carefully the functional currency
To USD or not to USD? (Or any other currency for that matter). Functional currency reflects where the business generates and spends the most money, and the accounting ledges track this. For instance, a company that buys and sells in USD should be using USD as a functional currency instead of SGD – even if the company is based physically in Singapore.
4. Make sure you’re not missing important documents
This may be obvious, but missing key documents is a pain you can never afford. This causes delays and incorrect processes – plus you could waste a lot of time and money trying to get your paperwork in order. Always keep your bookkeeping in pristine condition. They are, after all, important to running a successful business.
In summary, while it can be challenging trying to stay on top of everything during the year-end financial compilation, staying ahead can help you through the processes quickly. This means that you’ll be able to make timely strategic decisions, allowing you to make quick executive decisions when needed to put your business in the right direction.
At Tan, Chan, and Partners, we have decades of experience managing our client’s accounts as well as providing sound tax advice (amongst other things). We’re always aware of updates in statutory regulations as it happens and can help you respond accordingly. In short, we’re good at what we do, and you may want our help. Whether you need accounting and audit services, corporate secretarial services, or just need some tax advice – we’re just a call away. Here’s how to find us.