singapore accounting software

Blockchain Technology in Accounting

Blockchain Technology in Accounting

Blockchain makes a decentralized record of all exchanges where all records are upgraded and open to everybody in real-time. It records and verifies transactions without any trusted central authority. The technology itself exists as a file that maintains a continuously growing list of ordered records called blocks. Each block contains a timestamp and a link to a previous block using a “fingerprint”. Blockchains are resistant to modification of data and cannot be altered retroactively.

Here are some key points to consider about the impact blockchain technology will have on the future of accounting.

Smart Contracts

With the security of blockchain technology, smart contracts that automatically process invoices, bank balances, and other accounts are also made possible with absolute transparency.

Consolidated Bookkeeping

Rather than keeping multiple records, companies can log off their transactions into a joint registry.

Standardization in Auditing

Since blockchain creates absolute standardization in the accounting practice, auditors will be able to verify larger amounts of data much faster. Conducting audit would also be much cheaper and easier.

Security and Trust

In blockchain, every transaction is recorded as a block that contains in timestamp and a unique fingerprint. Hacking an entire blockchain means hijacking all the computers connected to the ledger network. This makes it the most secure data management system ever to be conceived.

Less Paperwork for Accountants

In theory, blockchain will reduce or eliminate the dependency on paperwork in the future. For example, since the government can theoretically peek into a public ledger at any time. Companies no longer need to file tax returns. Everyone will be automatically taxed accordingly.

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Best Inventory Management Software in Singapore 2018

Best Inventory Management Software in Singapore 2018

The purpose of an inventory management system is to track the warehouse items through purchase, sales, locate them across one or many warehouses, and price the inventory so you are familiar with the value of items you have in inventory for accounting purposes.

Small-business owners face several problems when they are just starting up, such as securing financing, finding customers and managing inventory. As small businesses grow they think they have to leave their accounting solution in favor of a more expensive solution to take their business to the next level. Fortunately, Singapore Accounting Software offers best inventory solution for the small businesses. It is an inexpensive and cloud inventory management system that’s flexible and will grow with you. It offers inventory system in the form of EZ inventory and Sage_Ubs Inventory Software.

Integrating Sage_Ubs Inventory Software with Sage_Ubs Accounting Software helps in:

  1. Sales and purchase invoices figures are link to its accounting software
  2. Viewing of accounts Expenses VS Sales is available after posting of inventory software data to its accounting module
  3. Printing of statement of accounts is available once sales billing is posted to its accounting module.

The main functionality of these softwares absolutely about your inventory levels, but this kind of software also tracks sales, purchase orders and deliveries. However, any business bigger than that will want the asset identification, order tracking, and supply chain optimization capabilities that a good inventory management system delivers.

Features of EZ Inventory Software:

  • Allocation/ Transfer of stocks of different locations
  • Costing of stocks
  • Salesman stocks and Serial number stocks reporting
  • Stock card and Stock adjustment
  • Item listing valuation
  • Billing of invoice and purchase and other billing
  • Batch expiry stocks functions

Features of Sage_Ubs Inventory Software:

  • Multi-location stocks reporting
  • Salesman, Stock balance and Bill of material reporting
  • Items assembly function and stock adjustment
  • Location transfer
  • Consignment function for stocks control
  • Issue billing such as invoices, debit note and many more
  • Customer database update

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How to save on Business Taxation in Singapore?

How to save on Business Taxation in Singapore

In general, deductible business operating expenses are those entirely and absolutely incurred in the production of income. The Singapore government has allowed for tax deductions on several areas of operations for businesses, and ignoring them is as good as leaving money on the table.

Here are some of the most commonly overlooked areas:

Office Renovations

In Singapore, companies can claim deductions on the cost of renovating business premises, up to a total of $300,000. These costs cover a wide range of applications, from lighting to bathroom fittings and even certain decorations. The deduction needs to be claimed over three consecutive years, starting from when the costs are incurred. You also need to keep supporting documents, including a list of work done and related costs, for five years. Therefore, remember to file these invoices during your accounting.

Research and Development

Incentives for research and development are considerable in Singapore – up to 100% of the costs are tax deductible. To claim for R&D, your business needs to bear the costs and own the results. Activities also need to meet certain necessities: your objective should be to obtain new facts, create, or improve products or processes. It must also possess an element of novelty or attempt to improve upon technical risks and must undertake a systematic, investigative and experimental study.

Additionally, it is important to note that R&D related to trade is 100% deductible, while projects not related to trade only attract the same deductions if they’re conducted in Singapore.

Employee Medical Expenses

Keep a clean bill of health for your employees and reduce tax bills for your business at the same time by claiming for employee medical expenses. Medical expenses, which also cover dental and preventative treatments, are tax-deductible as long as they are capped at 1% of an employee’s total remuneration, including salary, allowances, and bonuses. This increases to 2% if you implement certain government medical and insurance schemes, or if you contribute directly to your employees’ Medisave accounts.

Goods and Commercial Motor Vehicles

In Singapore, you can claim a capital allowance for vans, lorries, and motorcycles acquired for commercial use, as well as cars so long as they’re hired out, or used for driving instruction. This includes the cost of obtaining and renewing your Certificate of Entitlement (COE) for vehicles. Additionally, motor vehicle expenses such as parking fees, maintenance, and petrol costs can also be deducted from your taxes.

Donations

Donations made to an approved Institution of a Public Character (IPC) are tax-deductible. Apart from cash donations, you can also claim for donations of shares, computers and even artifacts to approved museums.

Moreover, you needn’t have to deal with the hassle of including donation claims on your income tax return. IPCs will submit the information with your Tax Reference Numbers to the IRAS.

Being aware of tax deductions that your business is eligible for is the first step. Next, ensure that your expenses are well-tracked throughout the year so you don’t miss out on any deductions come tax time. For this, consider accounting software which helps you to manage your accounts with ease and convenience.

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Social Security Taxes in Singapore

Social Security Taxes in Singapore

Social security or Central Provident Fund (CPF) contributions are compulsory for Singapore citizens and permanent residents who are working in Singapore. Foreign persons working in Singapore are not qualified for the CPF scheme.

The Central Provident Fund (CPF) is a compulsory savings plan for employees in Singapore. It funds a range of social security schemes, including retirement, healthcare, and housing, and is maintained by the CPF Board.

Under the Scheme, the employer and employee are required to make monthly offerings at the existing contribution rates which depend upon the wage and age group of the employee. Both are required to make CPF contribution on the employee’s Ordinary Wage and Additional Wage subject to an Annual Wage Ceiling.

Prior to 1 January 2016, the wage cap for Ordinary Wage is SGD5,000 per month while the Annual Wage Ceiling is SGD85,000. From 1 January 2016, the wage cap for the Ordinary Wage is revised to SGD6,000 per month while the revised Annual Wage Ceiling is SGD102,000.

Additional Wage is limited to the difference between the prevailing Annual Wage Ceiling (SGD102,000 from the year 2016) and the Ordinary Wage that has been subject to CPF.

Statutory contributions in Singapore are made to the CPF by the employer and the employee. Contributions go into three accounts:

Ordinary Account (OA): Covering housing, insurance, investment, education

Special Account (SA): Covering retirement products

Medisave Account (MA): Covering hospital expenses and other medical insurance

When an employee turns 55, a fourth Retirement Account (RA) is created for them, designed to provide savings for retirement.

Employers should pay CPF contributions within 14 days of the end of the month. They may access their accounts via an online CPF Singapore login portal – which offers access a range of useful tools.

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Tax Exemptions of Foreign Sourced Income in Singapore

Tax Exemptions of Foreign Sourced Income in Singapore

Singapore tax policy is excellent, and this is why the country is often regarded as the tax haven. Factors like low and competitive tax rates, exemption schemes and a series of tax incentives make the nation more attractive for the foreign investors. Most prominently, the government of the country liberalized the Singapore taxation rules on foreign sourced income.

As per the Singapore Tax Act, Section 10(1), the Singapore corporate tax is levied on the income earned from Singapore or received in Singapore from outside the country. Specifically, income earned outside Singapore is subject to taxation in Singapore. However, some exceptions are there. Foreign sourced income is only taxable if it has an office or branch in Singapore.

Under the Section 10 (25) of Singapore Tax Act, foreign-sourced income is taxed only when the income is received in Singapore in following ways:

  • The income that is transferred, remitted or brought into Singapore
  • Any amount of income received from foreign which is applied in or towards satisfaction of any loss or debt incurred by trade or business carried on in Singapore
  • Foreign sourced income applied to buy any movable asset which is brought into Singapore.

Scope of Tax Exemption for foreign-sourced income:

The Singapore government has always been trying to encourage foreign investments and funds to the nation to advance its economic conditions and keep its status of being the easiest place to do business for foreign entrepreneurs. As a part of this initiative, the government has liberalized the taxation rules to exempt foreign sourced income from being subject to any further tax in Singapore.

A Singapore tax resident individual and company can enjoy tax exemption on its specified foreign income that is remitted into Singapore on or after 1st Jun 2003.

The specific foreign incomes are:

  • Foreign sourced dividends
  • Foreign Branch profits
  • Foreign sourced services income

Qualification conditions for tax exemptions:

Under the section of 13(7A) of the Act, with the effect of 1 January 2004, Singapore resident individuals are free to bring back any of their income generated by a foreign source without any further tax on such income.

As for Singapore resident companies, under Section 13 (9) of the Income Tax Act, tax exemption will be approved if the following conditions are fulfilled.

  • The highest headline corporate tax rate of the foreign jurisdiction from which income is received is at least 15%
  • The particular foreign income received in Singapore has been subjected to tax in the foreign jurisdiction.

Singapore resident companies which do not meet the conditions mentioned above are liable to taxation in Singapore.  However, Inland Revenue Authority of Singapore (IRAS) will grant a tax credit to the companies on whatever tax did they pay under foreign jurisdiction even if there is no double taxation treaty is in place.

With the flexible tax policies in Taxation Singapore of foreign sourced income and an array of pro-business tax rules and system of offerings, Singapore will continue to attract foreign investors and entrepreneurs for company incorporation in this business epicenter of South East Asia.

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