Bookkeeping for Singapore SMEs: A No-Fuss Guide

Is your “office” a shoebox or drawer overflowing with receipts? Do you spend more time than you’d like managing spreadsheets than talking to customers? If that sounds familiar, you’re not alone. For many small business owners in Singapore, bookkeeping feels like a chore. A confusing, time-consuming puzzle of numbers and rules.

But here’s the thing: getting a handle on your books isn't just about keeping the tax authorities happy. It’s the key to understanding your business's health, making smarter decisions, and actually growing. Ignoring bookkeeping can lead to cash flow surprises, missed opportunities, and serious headaches with the Inland Revenue Authority of Singapore (IRAS).

This guide will break it all down. No jargon, no fluff. Just a straightforward plan to help you manage your finances with confidence.

‍

What is Bookkeeping Anyway?

At its heart, bookkeeping is simply the process of recording all the money that moves in and out of your business. That's it. Every sale, every supplier payment, every rental bill—it all gets logged.

Think of your bookkeeper as the team's diligent scorekeeper, tracking every single point. The accountant is the coach who analyses those scores, spots patterns, and creates a game plan for the next season. You need the scorekeeper's daily records to make the coach's strategy work.

‍

What are the main buckets for my money?

To keep things organised, every transaction you record drops into one of five basic buckets. Understanding these will make everything else click into place.

• Assets: This is the stuff your business owns that has value. For example: cash in your bank account, the products on your shelves (inventory), your company laptop, or money that your clients owe you (accounts receivable).
• Liabilities: This is what your business owes to others. This includes bank loans, bonuses payable to your employees, or bills from your suppliers (accounts payable).
• Revenue (or Income): The money you earn from selling your products or services. It's the total cash coming in before you subtract any costs.
• Expenses: These are the costs of running your business. Your rent, employee salaries, marketing ads, and the cost of the goods or services you are selling all fall into this bucket.
• Equity: What’s left over for the owner(s) after you subtract all your liabilities from your assets. It’s a measure of the business's net worth.

Every time money moves, it affects at least two of these buckets. This simple system, called double-entry bookkeeping, is the foundation of modern accounting.

‍

‍

How Do I Get Started?

Setting up a solid system from day one will save you a world of pain later. You don't need an accounting degree to do it right. You just need to follow three simple steps.

‍

Create a "Chart of Accounts"

A chart of accounts is just your company's unique list of those five buckets, broken down into more detail. It's a template you create so you can categorise every transaction the same way, every time.

For example, under the "Expenses" bucket, you might have sub-categories like:

• Rent
• Software Subscriptions (e.g., Microsoft 365, Adobe)
• Utilities - Electricity
• Marketing - Facebook Ads
• Salaries

Your list will be unique to your business. A bakery might have a "Flour and Sugar" expense, while a marketing agency won't.

‍

Open a separate business bank account

If you only take one piece of advice from this article, make it this one. Open a dedicated corporate bank account the moment you register your business.

Why is this such a big deal? Because mixing your personal and business finances is a recipe for disaster. When your business lunch and your personal grocery run come out of the same account, it becomes nearly impossible to see how your business is actually performing. Come tax season, you'll have a nightmare trying to untangle what was a legitimate business expense.

A separate account creates a clean, clear line. All your business income goes in, and all your business expenses go out. It's the simplest and most powerful trick for clean bookkeeping.

‍

Pick your tools

You have three main options for how you'll actually do the recording.

1. Manual Spreadsheets (Excel, Google Sheets): This can work if you're just starting out with very few transactions, say less than ten a month. It’s cheap, but it's also slow and incredibly easy to make a typo that throws all your numbers off. As you grow, you'll quickly outgrow this method.
2. Accounting Software (we recommend Xero): This is the sweet spot for most SMEs. For a monthly fee, you get a cloud-based tool that can automate a whole heap of the work. Xero can connect to your business bank account, help you send invoices, and generate financial reports with a few clicks. The time you save and the errors you avoid are almost always worth the cost.
3. Outsourcing to a Firm: As your business gets more complex, you might decide your time is better spent on strategy, not spreadsheets. Outsourced accounting services, like those we offer at Harvest Accounting, take the entire process off your plate. It ensures everything is handled by experts, so you can sleep at night knowing you're compliant and your numbers are accurate.

‍

What Does IRAS Want?

IRAS isn’t trying to catch you out. They just need proof that the income and expenses you declare on your tax return are real. To do that, they require you to keep proper records and supporting documents.

So, what records do you need to keep? IRAS suggests a simple framework. Essentially you need a clear log of your income and expenses.

You must keep these records for at least five years. A good habit is to scan all your paper receipts and save them to a cloud drive like Google Drive or Dropbox. This saves you from keeping physical shoeboxes and protects you if the original thermal paper fades.

‍

What should my records look like?

Let's take daily sales as an example. Instead of a formal table, just think of it as a simple daily diary. For every business day, you should be able to answer:

• Who paid me? (Customer name)
• How much did they pay?
• What was the invoice number?
• How did they pay? (e.g., Bank Transfer, PayNow, Cash)

At the end of the month, you just total it all up. Do the same for all your purchases and expenses. This consistency is what gives you a clear financial picture and keeps you ready for any IRAS questions. For more details on your tax obligations, you can check out our guide on [Coming Soon: Corporate Income Tax Laws in Singapore].

As mentioned earlier, this can be tedious to do by hand or track on a spreadsheet. Modern accounting software makes this so much easier.

‍

How Do I Keep My Books Clean Day-to-Day?

Good bookkeeping is a habit, not a once-a-year rush. Here are a few core routines to build into your workflow.

‍

Record transactions as they happen

Don't let receipts pile up. Record your transactions the moment they happen. Harvest recommends using a tool like Dext to snap a picture of your receipts the moment you get it. Other methods may work for you too. The same applies for sales invoices. Send and record them immediately. The rule of thumb for expenses is: no receipt, it didn’t happen. Source documents are your proof.

‍

Reconcile your accounts every month

Reconciliation is just a fancy word for checking your work. Once a month, sit down with your bank statement and your own records (your "books"). Go line by line and tick off every item that matches.

This simple check helps you spot everything from bank fees you forgot to record to a payment from a client that came in without you noticing. Catching these small things monthly prevents them from becoming big problems later.

Over time, you’ll get better at noticing if something is off.

‍

Generate financial reports (and actually read them!)

The whole point of all this recording is to get valuable information. The two most important reports you'll need are:

• The Profit & Loss Statement (P&L): This report tells you if you made or lost money over a period, like a month or a quarter. It’s your income minus your expenses. Are you profitable? The P&L has the answer.
• The Balance Sheet: This is a snapshot of your business's financial health on a single day. It shows what you own (assets) and what you owe (liabilities). It gives you a clear picture of your company's stability.

These reports aren't just for your accountant or the bank. They are your business's report card. They tell you what's working, what's not, and where you should focus your energy. If you're not sure how to read them, our guide on [Coming Soon: Interpreting Financial Statements] can help.

‍

Feeling Overwhelmed? Here's How We Help

We get it. You started a business to pursue a passion, not to become a part-time accountant. Juggling customers, staff, and suppliers is more than a full-time job. The last thing you need is the added stress of wrestling with bookkeeping rules and tax deadlines.

This is where Harvest Accounting comes in. We act as growth partners for SMEs across Singapore, taking the financial admin off your plate so you can get back to what you do best.

Our Monthly Accounting service is designed to solve the very problems we've talked about.

• Messed-up records? We organise everything for you, setting up a proper chart of accounts and ensuring every transaction is recorded accurately.
• Confused by software? We are Xero accounting platinum partners. We'll set you up on the best cloud platform and manage it for you, using tools like Dext to make expense tracking effortless.
• Worried about tax time? We handle your year-end Unaudited Financial Statements and Tax Computation, ensuring everything is filed correctly and on time with IRAS.
• Unsure of your performance? We provide you with clear monthly reports so you always know exactly where you stand financially.

Don't let bookkeeping be the bottleneck in your business.

Ready to hand over the shoebox of receipts? Contact Harvest Accounting today for a chat. Let's make your life easier.

‍

Further Reading

• What Are The Signs Your Singapore Small Business Needs To Outsource Accounting?
• What Tax Deductions Do Singapore Small Businesses Often Miss?
• When Do Singapore Small Businesses Need to Register for GST?
• [Coming Soon: How Can Singapore Small Businesses Choose The Right Accounting Partner?]

‍