Accounting for Renovation & Interior Design Businesses in Singapore 2025

Introduction

The renovation and interior design industry in Singapore is thriving, driven by demand for home makeovers, office renovations, and commercial fit-outs. Whether working on HDB flats, condominiums, landed properties, or corporate spaces, renovation firms and interior designers must manage their finances effectively to maintain profitability and comply with tax regulations.

While these businesses focus on aesthetics and structural improvements, proper accounting, bookkeeping, and financial management are essential for sustaining growth and ensuring compliance with Singapore’s financial and tax regulations.

This article explores the key accounting considerations for renovation and interior design businesses in Singapore in 2025, including bookkeeping, cost management, GST compliance, payroll processing, and financial planning.

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1. Understanding Revenue and Cost Structures in Renovation & Interior Design Businesses

Renovation and interior design businesses operate in a project-based revenue model, meaning financial planning must account for fluctuating revenue cycles, large project costs, and supplier payments.

Revenue Sources

• Residential Renovation Services – HDB, condominium, and landed property renovations.
• Commercial Fit-Outs – Office, retail, and F&B interior design and renovation.
• Custom Carpentry & Built-Ins – Custom furniture, wardrobes, and kitchen cabinets.
• Project Management Fees – Overseeing renovation timelines and supplier coordination.
• Material Sales & Markups – Revenue from selling tiles, lighting, and other home improvement materials.

Key Cost Components

• Labour Costs – Salaries for in-house workers, subcontractors, and project managers.
• Material Costs – Purchases of wood, tiles, paints, lighting fixtures, and other renovation supplies.
• Subcontractor Payments – Fees for electricians, plumbers, and carpenters.
• Equipment Rental & Maintenance – Leasing of construction tools and transportation costs.
• Office & Showroom Rental – Expenses for maintaining a workspace or showroom for clients.
• Licensing & Compliance Costs – BCA (Building and Construction Authority) licenses and insurance fees.

Tracking these financial components accurately ensures renovation businesses maintain healthy profit margins and financial stability.

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2. Importance of Proper Bookkeeping for Renovation & Interior Design Firms

Accurate bookkeeping is crucial for tracking project expenses, managing client payments, and maintaining compliance with financial regulations.

Daily & Weekly Record-Keeping

• Record client deposits and milestone payments.
• Track supplier invoices, material purchases, and labour costs.
• Maintain a separate ledger for each renovation project to monitor profitability.

Managing Accounts Payable & Receivable

• Invoice clients promptly based on project milestones.
• Track outstanding payments and send reminders for unpaid invoices.
• Implement payment tracking software to manage cash flow effectively.

Using Accounting Software for Automation

Many renovation firms use tools like Xero, QuickBooks, or MYOB to automate bookkeeping, generate invoices, and track project-based expenses.

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3. GST and Tax Compliance for Renovation & Interior Design Businesses in Singapore

GST for Renovation & Interior Design Services

• Businesses with annual revenue exceeding SGD 1 million must register for Goods and Services Tax (GST).
• GST-registered businesses must charge 9% GST (effective 2024) on renovation and design services.
• Quarterly GST filings must be submitted to IRAS (Inland Revenue Authority of Singapore).

Corporate Tax Considerations

• Singapore’s corporate tax rate is 17% on chargeable income.
• New renovation startups may qualify for Start-Up Tax Exemption (SUTE) benefits.
• Common tax deductions include material costs, subcontractor fees, marketing expenses, and rental costs.

Ensuring tax compliance and claiming deductions helps renovation businesses reduce tax liabilities and improve profitability.

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4. Managing Payroll and Subcontractor Payments

Renovation and interior design businesses often hire a mix of full-time employees, subcontractors, and freelance designers.

Payroll for Employees

• Employers must contribute to CPF (Central Provident Fund) for Singaporean and PR employees.
• For foreign workers, valid S Pass or Work Permits are required, and businesses must pay foreign worker levies.

Managing Subcontractor & Freelancer Payments

• Many firms outsource work to electricians, plumbers, and painters.
• Payments must be properly documented, and firms should issue Form IR8A for tax purposes.
• Use platforms like Payoneer, Wise, or PayPal for international freelancer payments.

Automating Payroll Processing

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

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5. Financial Planning and Budgeting for Renovation & Interior Design Firms

A solid financial plan ensures long-term stability and business growth.

Cash Flow Forecasting

• Maintain a cash reserve for at least 3-6 months of operating expenses.
• Plan for seasonal demand fluctuations, such as increased renovation projects before Chinese New Year.

Break-Even Analysis

• Calculate the break-even point for each project to ensure profitability.
• Monitor profit margins on materials and labour costs.

Financial Reporting for Decision-Making

• Monthly Profit & Loss (P&L) statements help track business performance.
• Regular audits ensure financial stability and compliance.

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6. Common Accounting Mistakes to Avoid in Renovation & Interior Design Firms

1. Poor Project Budgeting

• Underestimating material and labour costs can reduce profitability.

2. Late Client Invoicing & Payment Collection

• Delays in invoicing can create cash flow issues.

3. Not Tracking Project-Specific Expenses

• Each project should have a separate budget and cost breakdown.

4. Failing to Reserve Funds for Taxes

• Many renovation firms forget to set aside GST and corporate tax reserves, leading to financial stress.

Avoiding these mistakes helps renovation firms maintain financial health and operational efficiency.

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7. Leveraging Accounting Software and Automation

Best Accounting Solutions for Renovation Firms

• Xero & QuickBooks – For automating bookkeeping, invoicing, and tax compliance.
• Buildxact & CoConstruct – For project-based financial tracking and cost management.
• Google Sheets & CRM Software – For managing supplier invoices and revenue tracking.

Automation enhances financial efficiency, accuracy, and decision-making.

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8. Why Engage a Professional Accountant for Renovation & Interior Design Firms?

A professional accountant can help renovation firms 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 timely filings and maximized deductions.
• Profitability Analysis – Helps optimize pricing strategies for renovation services.
• Financial Forecasting & Growth Planning – Prepares businesses for expansion and scalability.

Hiring an accountant reduces financial stress and allows firms to focus on project execution.

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Conclusion

Accounting for renovation and interior design firms in Singapore in 2025 requires careful financial management, accurate tax reporting, and strategic budgeting. Firms that track expenses, optimize project revenue, and use financial automation tools can increase profitability and long-term success.

By leveraging accounting software, financial planning, and expert accounting services, renovation firms can scale their businesses while staying financially stable.