Singapore Accounting Compliance: What SMEs Must Track for IRAS Reviews

For Singapore SMEs, IRAS reviews are rarely about one specific mistake. More often, issues arise because records are incomplete, inconsistent, or difficult to trace. Knowing what IRAS focuses on — and tracking it consistently — makes compliance far less stressful.

Below are the key areas SMEs should track to stay prepared for IRAS reviews, and how good accounting systems help make this routine rather than reactive.

One of IRAS’s primary expectations is complete and accurate transaction records. This means every source of income and every business expense should be recorded properly, with no unexplained gaps. Missing transactions, late entries, or backdated records raise immediate questions.

SMEs should ensure that:

• All sales and income are recorded in full
• All expenses claimed are business-related and supported
• Transactions are entered close to when they occur

When records are captured late or inconsistently, it becomes harder to explain figures during a review.

Equally important is supporting documentation. IRAS does not rely on summaries alone. They expect transactions to be backed by original source documents, such as:

• Customer invoices
• Supplier invoices
• Expense receipts
• Bank statements and payment records

These documents must be retained for at least five years and be easily retrievable. When documents are scattered across folders or inboxes, responding to IRAS queries becomes time-consuming and risky.

AI-powered bookkeeping platforms like ccMonet help by linking documents directly to transactions, creating clear, searchable records that are ready when needed.

Bank reconciliation is another major focus area. IRAS expects accounting balances to align with actual bank statements. Unreconciled differences — especially if they persist over time — are common red flags.

SMEs should track:

• Regular reconciliation of all bank accounts
• Clear explanations for outstanding or reconciling items
• Evidence that discrepancies are reviewed and resolved

Clean, ongoing reconciliation demonstrates that the books reflect real financial activity.

For GST-registered businesses, GST treatment and traceability are critical. IRAS reviews often focus on whether GST figures can be clearly supported by underlying transactions and valid documents.

SMEs must track:

• Correct classification of standard-rated, zero-rated, exempt, and out-of-scope supplies
• Proper GST treatment on expenses
• Valid tax invoices and receipts supporting GST claims

GST errors often stem from inconsistent categorisation rather than calculation issues.

Another area IRAS looks at is consistency and audit trails. They may ask how figures were derived or why changes were made. Clear audit trails show:

• When transactions were created or amended
• What changes were made
• That records remain traceable to source documents

Strong audit trails reduce follow-up questions and speed up reviews.

IRAS also expects regular review and control, not just year-end activity. Businesses that only “clean up” records during filing season are more likely to encounter issues. Periodic reviews help catch errors early while details are still fresh.

Good practice includes:

• Monthly or quarterly checks of key accounts
• Reviewing unusual or large transactions
• Monitoring expense trends and anomalies

Ultimately, IRAS reviews are not about catching businesses out — they’re about verifying that records are reliable, complete, and traceable. SMEs that track the right information consistently find reviews far smoother and less disruptive.

The key isn’t doing more work. It’s building systems that support compliance as part of everyday accounting.

If you want to reduce stress around IRAS reviews and ensure your records are always ready, explore how AI-powered bookkeeping with ccMonet can help your business maintain accurate, compliant records year-round.

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