Accounting for Logistics & Courier Services Businesses in Singapore 2025

Introduction

Singapore’s strategic location as a global trade hub has fueled the growth of the logistics and courier services industry. With rising demand for last-mile delivery, warehousing, freight forwarding, and e-commerce logistics, businesses in this sector must adopt robust accounting practices to ensure profitability and compliance with Singapore’s tax regulations.

As logistics companies handle fluctuating fuel costs, warehousing expenses, fleet maintenance, and workforce salaries, financial management plays a crucial role in sustaining business growth. Proper accounting ensures accurate financial reporting, cost control, and tax efficiency.

This article explores key accounting considerations for logistics & courier services businesses in Singapore in 2025, including bookkeeping, revenue tracking, tax compliance, payroll management, and financial planning.

---

1. Understanding Revenue and Cost Structures in Logistics & Courier Businesses

Logistics and courier businesses operate on a fee-based revenue model, where revenue is earned through delivery charges, storage fees, and transportation services.

Revenue Sources

• Local & International Delivery Fees – Income from domestic and cross-border shipping.
• Warehousing & Storage Fees – Rental income from clients using logistics storage facilities.
• Freight Forwarding & Customs Handling – Charges for managing import/export documentation and clearance.
• E-Commerce Logistics Services – Partnering with online stores to provide last-mile delivery and fulfillment services.
• Express & Same-Day Delivery Services – Premium charges for urgent deliveries.
• Subscription & Contract-Based Logistics – Fixed monthly retainers for corporate clients with bulk shipping needs.

Key Cost Components

• Fuel & Vehicle Maintenance Costs – High operating expenses for courier fleets and delivery vans.
• Warehouse Rental & Utilities – Fixed costs for logistics storage and distribution centers.
• Driver & Staff Salaries – Wages for drivers, warehouse operators, and logistics coordinators.
• Customs Duties & Import Taxes – Payments for cross-border shipments and regulatory compliance.
• Software & Technology Costs – Investments in fleet management software, GPS tracking, and inventory systems.
• Marketing & Client Acquisition – Advertising expenses for B2B and e-commerce logistics partnerships.

By accurately tracking these revenue streams and costs, logistics businesses can maintain profitability and ensure long-term financial stability.

---

2. Importance of Proper Bookkeeping for Logistics & Courier Services

Bookkeeping is essential for logistics firms to track shipments, manage cash flow, and ensure compliance with tax regulations.

Daily & Weekly Record-Keeping

• Maintain logs of all delivery transactions and service fees.
• Track fleet fuel expenses, maintenance costs, and warehouse utilities.
• Record customs duty payments and import/export documentation costs.

Managing Accounts Payable & Receivable

• Invoice corporate clients promptly and set payment terms to prevent late collections.
• Track outstanding payments and send reminders for unpaid invoices.
• Monitor supplier payments for warehouse rentals, vehicle leases, and customs duties.

Using Accounting Software for Automation

Many logistics firms use Xero, QuickBooks, or MYOB to automate bookkeeping, track invoices, and generate financial reports.

---

3. GST and Tax Compliance for Logistics & Courier Businesses in Singapore

GST for Logistics & Delivery Services

• Businesses with annual revenue exceeding SGD 1 million must register for Goods and Services Tax (GST).
• GST-registered companies must charge 9% GST (effective 2024) on logistics, courier, and freight services.
• International shipping and freight services may be zero-rated for GST under IRAS guidelines.
• Quarterly GST filings must be submitted to IRAS with accurate tax documentation.

Corporate Tax Considerations

• Singapore’s corporate tax rate is 17%, with Start-Up Tax Exemption (SUTE) benefits for new businesses.
• Tax deductions are available for vehicle depreciation, warehouse expenses, employee wages, and customs duties.
• Logistics businesses may qualify for government grants and tax incentives for adopting eco-friendly transport solutions.

Ensuring proper tax compliance and GST classification is essential for avoiding penalties and maximizing deductions.

---

4. Managing Payroll and Driver Payments

Logistics and courier businesses employ a mix of full-time staff, contract drivers, and outsourced logistics workers, requiring efficient payroll management.

Payroll for Employees

• Employers must contribute to CPF (Central Provident Fund) for Singaporean and PR employees.
• Foreign logistics workers and drivers require valid Work Permits or S Passes, and businesses must comply with Ministry of Manpower (MOM) regulations.

Managing Contract Driver Payments

• Many courier companies operate on a contractor model, where drivers are paid per delivery or mileage-based rates.
• Payments must be properly documented, and firms should issue Form IR8A for tax purposes.
• Use payment platforms like PayNow, Wise, or PayPal for outsourced driver payments.

Automating Payroll Processing

Payroll software like Talenox, Payboy, or HReasily simplifies salary processing, CPF contributions, and tax filings.

---

5. Financial Planning and Budgeting for Logistics Businesses

A well-planned financial strategy helps logistics businesses manage operating costs, improve profitability, and expand services.

Cash Flow Forecasting

• Maintain a cash reserve for at least 3-6 months to cover fuel, vehicle repairs, and staff wages.
• Plan for seasonal demand fluctuations, such as increased shipping needs during festive periods.

Break-Even Analysis

• Calculate the break-even point per delivery to ensure sustainable pricing.
• Monitor fleet efficiency and vehicle utilization to optimize cost control.

Financial Reporting for Decision-Making

• Monthly Profit & Loss (P&L) statements help logistics firms track revenue trends and operational expenses.
• Regular financial audits ensure compliance and cost efficiency.

---

6. Common Accounting Mistakes to Avoid in Logistics & Courier Businesses

1. Poor Expense Tracking & Fuel Cost Management

• Unmonitored fuel spending and vehicle maintenance can lead to unexpected losses.

2. Delayed Invoicing & Payment Collection

• Late corporate invoices can create cash flow shortages.

3. Not Allocating GST & Tax Reserves

• Failing to set aside GST and corporate tax reserves can cause financial strain.

4. Inefficient Fleet & Warehouse Cost Management

• Overpaying for underutilized warehouse space or unoptimized delivery routes increases costs.

Avoiding these mistakes ensures better financial stability and operational efficiency.

---

7. Leveraging Accounting Software and Automation

Best Accounting Solutions for Logistics Firms

• Xero & QuickBooks – For automating bookkeeping, invoicing, and tax compliance.
• Fleet Management Software (Geotab, Samsara) – For tracking vehicle expenses and optimizing routes.
• Google Sheets & Financial Dashboards – For monitoring logistics revenue and cost trends.

Automation enhances financial accuracy, efficiency, and scalability.

---

8. Why Engage a Professional Accountant for Logistics & Courier Businesses?

A professional accountant can help logistics businesses optimize tax planning, manage cash flow, and ensure compliance with Singapore’s financial regulations.

Key Benefits of Hiring an Accountant:

• Tax Planning & GST Compliance – Ensures accurate filings and tax deductions.
• Cost Efficiency Analysis – Helps optimize fleet expenses and warehouse costs.
• Financial Forecasting & Expansion Planning – Supports business growth strategies and investment planning.

Hiring an accountant allows logistics firms to focus on service delivery while maintaining financial stability.

---

Conclusion

Accounting for logistics & courier businesses in Singapore in 2025 requires effective financial management, tax compliance, and strategic budgeting.

By leveraging accounting software, cost control strategies, and expert financial planning, logistics firms can increase profitability and expand their operations.