Bookkeeping is one of the most important administrative tasks for any business owner in Singapore. Whether you run a small home-based operation or a fast-growing SME, keeping proper financial records is not just good practice—it is also a legal requirement under the Singapore Companies Act and Inland Revenue Authority of Singapore (IRAS) regulations.
Many business owners think that bookkeeping is complicated or requires specialized training. The truth is: you can absolutely do your own bookkeeping if you understand the principles, follow a system, and stay consistent. This guide will walk you step-by-step through how bookkeeping works in Singapore, what you must track, and how to stay compliant.
1. Understand What Bookkeeping Actually Means
Bookkeeping is the process of recording your company’s financial transactions in an organized, structured and timely way.
This includes:
- Recording sales and issuing invoices
- Tracking supplier bills and expenses
- Updating payments and receipts
- Recording payroll
- Keeping track of assets, liabilities and loans
- Performing bank reconciliation
- Preparing a basic profit & loss and balance sheet
Bookkeeping does not necessarily mean preparing year-end financial statements—that is part of accounting. But good bookkeeping makes accounting, tax filing, and audit much easier.
2. Know the Legal Requirements in Singapore
Singapore has strict but clear rules on record-keeping. As a business owner doing your own bookkeeping, you must follow these requirements:
a. Keep records for a minimum of 5 years
IRAS requires all companies to retain accounting records for at least five years from the end of the financial year.
b. Maintain accurate source documents
Every transaction must be supported by:
- Invoices
- Receipts
- Delivery orders
- Bank statements
- Expense claims
- Contracts
- Payroll records
c. Use proper tax codes for GST (if GST-registered)
GST-registered companies must apply correct GST codes and prepare accurate GST F5 filings.
d. Maintain a proper system of accounts
You must have:
- Cash book
- Sales ledger
- Purchase ledger
- General ledger
Using cloud accounting software makes this extremely easy.
3. Choose the Right Bookkeeping Method: Manual or Cloud-Based
There are two ways to do your bookkeeping:
Option A: Manual bookkeeping (Excel or Google Sheets)
This is suitable for very small businesses with minimal monthly transactions.
Pros:
- Free
- Good for home-based businesses or startups
Cons:
- Time-consuming
- Easy to make mistakes
- Hard to track GST
- No automation
Option B: Cloud accounting software (recommended)
Popular cloud accounting software in Singapore includes:
- Xero
- QuickBooks Online
- Zoho Books (Singapore Edition)
- Financio
- Sage
- Deskera
Benefits:
- Automatic bank feeds
- Auto-tracking of invoices and bills
- GST-ready features
- Real-time financial reports
- Accessible from anywhere
- Easier to work with accountants
For most SMEs, cloud accounting is the preferred choice.
4. Set Up Your Chart of Accounts Properly
Your Chart of Accounts (COA) is the foundation of your bookkeeping system. It categorizes all your financial activity.
A basic Singapore COA includes:
Assets
- Cash
- Bank accounts
- Accounts receivable
- Fixed assets
- Inventory
Liabilities
- Accounts payable
- Accrued expenses
- Loans
- GST payable/receivable
Equity
- Share capital
- Retained earnings
Income
- Sales revenue
- Service income
- Other income
Expenses
- Cost of goods sold
- Staff salaries
- CPF contributions
- Rental
- Utilities
- Marketing expenses
- Transport
- Bank charges
A clear COA ensures that every transaction is recorded correctly.
5. Learn the Core Bookkeeping Tasks (Step-by-Step)
Here are the essential tasks you’ll handle each month.
Step 1: Record Your Sales
If you sell products or services, every sale must be recorded with proper documentation.
You should:
- Issue invoices
- Number invoices sequentially
- Track which invoices are unpaid
- Record payments when customers pay you
If you accept PayNow, credit cards, or online payments, ensure the transactions match your accounting system.
Step 2: Record Your Expense Bills
Whenever you receive a supplier bill:
- Save the bill
- Record the amount
- Categorize the type of expense
- Track payment due dates
Common categories include:
- Rental
- Marketing
- Office supplies
- Software subscriptions
- Professional fees
You should also keep digital copies (PDF or photos) of all receipts.
Step 3: Track Your Cash and Bank Transactions
All incoming and outgoing money must match your books. This includes:
- Bank transfers
- Cash receipts
- PayNow payments
- Giro deductions
- ATM withdrawals
- Credit card spending
- Cheque payments
If you use cloud software, many of these can sync automatically through bank feeds.
Step 4: Perform Bank Reconciliation Monthly
Bank reconciliation is one of the most important bookkeeping tasks.
It ensures:
- Your books match your bank statement
- No transactions are missing
- No duplicated entries exist
- Fraud or errors are detected early
This should be done every month without fail.
Step 5: Record Payroll Properly
Payroll in Singapore must include:
- Gross salary
- Employee CPF contribution
- Employer CPF contribution
- SDL (Skills Development Levy)
- Any allowances or bonuses
At month-end, record all payroll-related entries accurately and ensure CPF submissions are done on time.
Step 6: Track Loans, Assets, and Depreciation
If your business has:
- Bank loans
- Director loans
- Equipment purchases
- Renovations
- Computers or machinery
You must record them as assets and calculate depreciation.
This part is slightly more technical, but most accounting software helps automate depreciation.
Step 7: Prepare Basic Reports
Even if you do your own bookkeeping, you should review financial statements monthly:
- Profit & Loss (P&L) – To know if you are making money
- Balance Sheet – To see your assets, liabilities, and equity
- Cashflow Statement – To understand cash movements
If your numbers look off, review your data entry for mistakes.
6. Understand GST Requirements (If Applicable)
If your business is GST-registered or is planning to register soon, you must understand:
- Standard-rated supplies
- Zero-rated exports
- Exempt supplies
- Out-of-scope transactions
- Reverse charge
- Imported services GST
You must also:
- Use accurate GST tax codes
- File your GST F5 returns quarterly
- Keep all GST-linked records
Cloud accounting software significantly reduces the risk of errors.
7. Be Consistent and Timely
Doing your own bookkeeping requires consistency.
Best practices:
- Set aside 2 fixed days a month for bookkeeping
- Update bank transactions weekly
- Issue invoices within 24 hours of completing work
- Record bills as soon as you receive them
- Maintain organized digital folders
Bookkeeping gets overwhelming when you let it pile up for months.
8. Avoid Common Bookkeeping Mistakes in Singapore
These are the mistakes most business owners make when doing their own books:
❌ Mixing personal and business expenses
Always use a dedicated business bank account.
❌ Forgetting CPF or not recording it properly
CPF is mandatory for Singapore employees.
❌ Misclassifying expenses
This leads to wrong profit reporting and problems during tax time.
❌ Not reconciling the bank
Your numbers will be wrong if reconciliation isn’t done correctly.
❌ Messy or missing invoices
IRAS can penalize companies for poor record-keeping.
❌ Incorrect or missing GST
GST errors can lead to fines, penalties, and audits.
Avoid these mistakes and your bookkeeping will remain clean and compliant.
9. When Should You Stop DIY Bookkeeping?
Doing your own bookkeeping is fine when:
- You have a small number of transactions
- You work alone or with a very small team
- You have simple expenses and revenue streams
However, it’s time to outsource when:
- You don’t have time to update your books
- You constantly fall behind
- You are GST-registered
- You have staff and payroll
- You have multiple revenue streams
- You are preparing for audit
- You want more accurate financial reports
Hiring a professional bookkeeping firm may cost money, but it can save you a lot of time, stress, and potential costly mistakes.
Final Thoughts — And When to Consider Professional Help
Doing your own bookkeeping in Singapore is absolutely possible if you follow a clear system, stay disciplined, and use good cloud accounting software. Many small business owners successfully manage their own books, especially in the early stages. But as your business becomes more complex—GST registration, payroll, inventory, or multiple revenue streams—bookkeeping becomes more technical and easier to get wrong.
If you ever reach a point where you feel unsure, overwhelmed, or simply too busy to keep your books accurate, you don’t have to struggle on your own. You can always reach out to K Cloud Accounting, a professional Singapore bookkeeping service that can help you maintain clean, compliant and reliable accounts, so you can focus on growing your business with peace of mind.