7 Accounting mistakes to avoid for every small business in Singapore

accounting services in Singapore

It’s very important to maintain the accounts of your business properly. Any major mistake can create lots of confusion and chaos.

accounting services in Singapore

Maintaining accurate records of all financial transactions is critical to the success of any business, large or small. 

Good accounting practices help business owners make informed decisions about where to allocate their resources, track their progress toward goals, and identify areas where they may be losing money.

Recommended post: Why do small businesses in Singapore need accounting services?

In this blog post, we have shared 7 common accounting mistakes that every small business in Singapore should avoid.


#1 Fail to hire the professional accountants

One of the major mistakes that a small business can do is to hire an accounting firm that is not a good fit for their business. This can lead to problems down the road, and it is important to make sure that you find an accounting firm that is a good fit for your business.

There are a few things to consider when looking for an accounting firm in Singapore, and you should make sure that you take your time to find the right one for your business.

  • Experience
  • Expertise
  • Portfolio
  • Affordability
  • Communication
  • Support
  • Reliability
  • Other services

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#2 Mixing personal and business transactions

You should avoid mixing personal and business transactions in your accounting as this could be a big mistake. This is because it can be difficult to keep track of your expenses and income if they are all mixed. It can also make it more difficult to file your taxes correctly. 

Therefore, it is best to keep your personal and business finances separate.

When you hire a Singapore accounting firm, this is perhaps the most common advice that can give. Not to mix personal and business transactions.

#3 Failure to track business costs properly

One of the major mistakes small businesses make is failing to properly track their business costs. This can lead to a few problems down the road, including making it difficult to make informed decisions about where to allocate resources. 

Without accurate cost information, it’s easy to make decisions that end up being counterproductive in the long run.

Therefore, you must make sure you keep track of all your expenses, so you can stay on top of your finances and avoid any potential disasters.

When you hire a bookkeeping firm in Singapore for your accounting, they would keep a track of all the business costs for you.

#4 Lack of cash flow management

Many small businesses make the mistake of poor cash flow management. This can be a major problem that can lead to many other issues. 

It is important to hire a professional accountant to help manage your cash flow properly. This will ensure that your business stays afloat and grows successfully.

#5 Lack of a budget plan

If you don’t have a budget plan, you may be making a huge accounting mistake. Without a budget, it’s difficult to know how much money you have coming in and going out, which can make it difficult to save money or make ends meet. 

A budget can help you track your spending and make sure that your money is going where you want it to.

When you hire a professional accounting firm in Singapore, they will always ensure that you have a budget plan for your business.

#6 Inability to maintain good records

One of the most common mistakes businesses make is failing to maintain good records. This can lead to a few problems, including difficulty tracking expenses, missed opportunities for tax deductions, and confusion when it comes time to file annual reports. Good record-keeping is essential for any business, no matter how small.

#7 Fail to backup accounting data

Small businesses may find that backing up accounting data can create issues. This is because small businesses often have limited resources and may not be able to afford to invest in reliable backup systems. 

Additionally, small businesses may not have the expertise or manpower to manage and maintain a backup system properly. As a result, if a small business’s accounting data is lost or corrupted, it can be very difficult and costly to recover.

It is therefore recommended that small businesses should hire a bookkeeper in Singapore who can manage the accounting data for them.

Recommended post: Accounting & Bookkeeping Tips For Small Businesses


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ACRA Cancels Registration of Filing Agent and Qualified Individual for AML/CFT Breaches

The Accounting and Corporate Regulatory Authority (ACRA) had cancelled the registrations of filing agent (RFA) and qualified individual (RQI) on 18 January 2024. The registrations were cancelled in view of breaches of anti-money laundering and countering the financing of terrorism (AML/CFT) controls under the ACRA (Filing Agents and Qualified Individuals) Regulations 2015 (the “ACRA Regulations”).

Some of the basic AMT/CFT controls that a RFA and RQI are required to exercise are as follows:

(a) perform additional customer due diligence measures when a customer is not physically present during onboarding;

(b) inquiring if there exists any beneficial owner in relation to some of its customers; and

(c) perform risk assessments i

RQIs and RFAs provide corporate secretarial services for business entities, such as helping customers to incorporate companies, file annual returns and fulfil other filing requirements under the Companies Act 1967 or other Acts under ACRA’s purview. RQIs and RFAs are required to perform customer due diligence measures in accordance with the ACRA Regulations, and conduct their business in such a manner as to guard against the facilitation of money laundering and the financing of terrorism. RQIs and RFAs must also satisfy statutory requirements such as being fit and proper persons, to be registered or continue to be registered.

RQIs and RFAs who breach their statutory obligations may be subject to enforcement actions, such as financial penalties of up to $10,000 or $25,000 per breach respectively or have their registrations with ACRA suspended or cancelled.

Therefore, RQIs and RFAs play an important role in helping to detect and combat illicit activities.

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