Let’s be honest — in Singapore, keeping proper records isn’t just “good business practice.” It’s mandatory. And not in a “suggested best practice” way, but in the very real sense that the law says you must.
If you’ve ever tried to piece together last year’s accounts with half-faded receipts and a vague memory of “what that payment was for,” you’ll know why. Records aren’t just for the taxman; they’re your safety net. Without them, you can’t prove what happened, and if IRAS comes asking, you’re on shaky ground.
Types of Records to Maintain
The rules are clear, and they don’t give you much wiggle room. You need to keep:
- Source documents — receipts, invoices, payment vouchers, letters, emails, contracts, anything that confirms a transaction took place.
- Accounting records and schedules — the big picture and the details: assets, liabilities, income, expenses, gains, losses, plus your bank statements and reconciliations.
- Due diligence records — if there’s a risk of Missing Trader Fraud in your industry, you must have proof of the checks you did, the risks you spotted, and the steps you took.
Think of it this way — the source documents are your proof, the accounting records are your story, and the due diligence files are your “here’s what I did to make sure it was all above board.”
Manual Records
Some people still like the old-fashioned way — a ledger, a pen, and a file cabinet. And it works… until it doesn’t. Paper can fade, tear, or get lost. Thermal receipts? They can be unreadable in months.
If you go this route, you’ve got to have a plan. Copy fragile documents, label files clearly, and store them somewhere that’s not going to get damp or dusty. Manual systems can be fine for small businesses, but they require discipline. Miss a filing day, and you’ll regret it later.
Electronic Records
For most, digital is easier. It can be as simple as an Excel sheet or as complex as a customised accounting platform. Even scanned copies of documents count — as long as they’re accessible, clear, and well organised.
The good news? If your records are stored electronically, you don’t have to keep the paper just for tax purposes. The important bit is that you can produce them when IRAS asks. Saying “oh, that’s on my old laptop” won’t cut it.
The big advantages: you save space, find things faster, and can back everything up. The downside? You’ve got to be on top of your system — backups, file naming, and security matter.
Timeline for Maintenance
Here’s the baseline rule: keep everything for five years — that’s under the Income Tax Act and the GST Act.
If you’re a company or LLP, the clock doesn’t stop when you shut down. You still have to keep the records for five years after dissolution, winding up, or being struck off.
One more thing — other laws (like the Companies Act) might have their own rules for certain documents. So it’s not just “five years and done.” You have to know all the timelines that apply to you.
Responsibility for Record Maintenance
Whose job is it to keep the records? Depends where you are in the business life cycle:
- Before dissolution — it’s on the company’s officers (directors, secretaries, executive managers).
- During winding up — the liquidator.
- Other cases — the owners and directors.
And remember, “officer” doesn’t just mean someone sitting in a boardroom. Managers and even receivers handling company property can be responsible.
Implications of Non-Compliance
If you don’t keep proper records, you hand over control to IRAS. They can:
- Estimate your revenue and tax bill — and you probably won’t like their number.
- Refuse deductions, capital allowances, or GST input claims.
- Fine you, or even take the matter to court.
Penalties
- Income Tax Act — fine up to $1,000; if unpaid, up to six months in jail.
- GST Act — fine up to $5,000, six months in jail, or both.
- For repeat GST offences — fines up to $10,000 and up to three years in jail.
These penalties aren’t just “in theory.” They’re enforced, and they can cripple a business.
Why Good Record Keeping Matters
Sure, compliance is reason enough. But beyond avoiding penalties, there are practical benefits:
- Quicker, smoother audits.
- Reliable financial data for planning.
- Time saved searching for documents.
- Stronger position in disputes — your records can be your best defence.
In reality, keeping proper records isn’t just about ticking a legal box. It’s about protecting your business and giving yourself room to make better decisions.
Final Thoughts
In Singapore, record keeping isn’t the sort of thing you can ignore and hope for the best. It’s part of the foundation of your business. Whether you’re storing files in a cabinet or on a server, the goal’s the same — complete, accurate, and accessible records.
The businesses that do this well don’t just avoid fines — they run better, plan smarter, and build trust faster.
If you haven’t reviewed your record keeping lately, now’s the time. You’ll thank yourself later — and so will your accountant.
