Financial reports are critical since they contain significant information about the financial health of a business. These reports allow business owners to make an informed decision as they highlight which companies’ areas offer the best return-on-investment. Unless exempted, companies in Singapore are mandated to file their financial reports or statements with ACRA. The reports must abide by the Singapore Financial Reporting Standards or SFRS that the Accounting Standards Council issued.
Other benefits of financial reporting include:
- Enhanced debt management: Regardless of the business sector, debt can cripple the company’s development all the same. Financial reports allow companies to track their current assets divided by their current liabilities on their balance to help gauge their liquidity and handle their debts accordingly.
- Identification of trend: Financial statements allow business owners to spot trends, both past and the present, which empower them to overcome potential weaknesses while assisting them in making improvements that will be beneficial to their business’s overall health.
- Real-time tracking: By getting access to centralised, real-time insights, business owners would be able to make informed business decisions swiftly, hence, preventing any possible hurdles while keeping their financial fluidity all the time.
- Liabilities management: Proper liabilities management is a vital part of the ongoing financial health of the company. Examples of integral liabilities include business loans and credit cards. The financial statements allow business owners to determine whether they need to decrease existing liabilities before making an official business loan application.
Business entities exempted from the financial report filing are as follows:
- Partnerships, including limited partnerships
- Sole proprietorships
- Solvent EPCs or Exempt Private Companies. While solvent EPCs are exempted, they are encouraged to file their financial statements.
- Dormant unlisted companies, which are dormant from their establishment’s time or since the end of the past financial year.
To ensure accurate and legally compliant financial reporting, business owners should seek assistance from reputable Singapore accounting services. When selecting accounting services in Singapore, be sure to consider factors like the agency’s credibility, reliability, industry expertise, pricing model, and extra services.