Accounting Records Maintenance

Created by TeamScailable Support, Modified on Thu, 4 Jan, 2024 at 4:10 PM by TeamScailable Support

1. What Are Accounting Records?

Financial Transactions: This includes records of all business transactions such as sales, purchases, receipts, payments, and other financial events.

Supporting Documents: Invoices, receipts, bank statements, contracts, employee records, and any other documents that support the transactions recorded.

2. Legal Requirements for Record Keeping:

In Singapore, the Accounting and Corporate Regulatory Authority (ACRA) requires companies to keep proper accounting

records for at least five years from the end of the financial year in which the transactions occurred.

3. Components of Accounting Records:

General Ledger: A complete record of all financial transactions over the life of the company.

Debtors and Creditors Records: Details of amounts owed to and by the company.

Asset Register: Details of fixed assets owned by the company, including purchase, depreciation, and disposal information.

Inventory Records: Details of inventory on hand, including quantities and values.

Payroll Records: Records of employee compensation, including salaries, bonuses, deductions, and CPF contributions.

Bank Records: Bank statements and reconciliations.

4. Importance of Maintaining Accurate Records:

Compliance with Tax Laws: Accurate records are essential for tax purposes, including preparation of tax returns and supporting tax audits.

Financial Analysis and Reporting: Well-maintained records are crucial for preparing financial statements and conducting financial analysis.

Budgeting and Planning: Helps in effective budgeting and financial planning.

Audit and Legal Purposes: Facilitates audits and can be crucial in legal scenarios or disputes.

5. Methods of Record Keeping:

Manual vs. Digital: While manual record-keeping is possible, most companies use digital methods for efficiency and accuracy. Accounting software can automate many aspects of record-keeping.

Regular Updates: It’s important to update records regularly and not fall behind, as catching up can be time-consuming and error-prone.

6. Internal Controls for Record Keeping:

Segregation of Duties: Implement checks and balances by segregating duties among different staff.

Regular Reviews and Audits: Conduct internal or external audits to ensure the accuracy and integrity of the records.