This question stems from queries that clients posed to our accounting team. As you may already be aware, Raffles Corporate Services does provide bookkeeping services. This means that clients send us their bills, invoices, receipts and other accounting-related documents to have their financial statements prepared. The financial statements are important as they are used for the following:

  1. The financial statements are tabled during the Annual General Meeting (AGM). Only after completing the AGM can the Annual Return Filing be done with the Accounting and Corporate Regulatory Authority (ACRA).
  2. The financial statements are required to declare a company’s Estimated Chargeable Income (ECI) with the Inland Revenue Authority of Singapore (IRAS).
  3. The financial statements are required to declare the company’s corporate taxes with IRAS.
  4. The financial statements may be relevant when bidding for certain work. The other party might rely on these financial statements to ascertain the creditworthiness of the company.
  5. When applying for business grants, especially the grants administered, the financial statements need to be uploaded to the Business Grants Portal.

The financial statements are prepared for a specific financial period. They are usually prepared for a 1-year period with the last day being the Financial Year End Date.

For example, if the current financial year end date is 15th December 2023, then the financial period would be from the 16th of December 2022 to the 15th of December 2023. The accountant of the company, be it in-house or outsourced, will need to prepare the financial statements for this period. You will need to hand over all related documents to the accountant.

 

When should you hand over all related documents?

The preparation of the financial statements may be very tedious if the work that needs to be done entails sorting through a year’s worth of documents. Ideally, there should be monthly reports and the financial statements would be an accumulation of 12 months of reports. However, if the situation is such that 12 months of work needs to be sorted all at once, then you will need to buffer at least 2 weeks to a months time for the accountants to sort through all the information, especially if the number of transactions is substantial.

 

My financial year end is around the corner, what should I do?

Consolidate all your documents and if possible, send them all to your accountants the moment the financial year closes. Ok, ideally within a week of the end of the financial year. The rationale is that if this is dragged out longer, there is a tendency for individuals to be less motivated to clear things that concluded some time ago. Also, as time passes, documents may fade. While this is only true for hardcopy documents, many companies still deal with hard copies. Additionally, handing relevant documents earlier to the company’s accountants would allow the accountants to raise possible questions earlier. The relevancy of the documents would make it easier for the company to answer queries about them. The company has 6 months after the end of the financial year to table the financial statements at the AGM. However, if the financial statements can be prepared earlier and consequently the AGM can be held earlier, this would be a major benefit to the company as the company can move on with dealing with the business proper as it would have cleared the corporate compliance matter earlier.

 

Ideally, this would be the scenario:

Financial year end date: 15th December 2023
Financial period: 16th of December 2022 to the 15th of December 2023
Handover all documents to the accountants by 31st December 2023
Complete the financial statements and have them approved by the board by 31st January 2024
Call for AGM and hold AGM by the end of February
File Annual Returns to ACRA immediately after the AGM

Therefore, obligations to ACRA for the financial period 16th of December 2022 to the 15th of December 2023 would be cleared by the end of February 2024.

That would be so ideal for all parties don’t you think? 😛

 

Yours sincerely,

The editorial team at Raffles Corporate Services