28th Mar

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Why You Should Do Yearly Bookkeeping for Your Business

Bookkeeping is the backbone of financial clarity in any business. While many business owners prefer monthly or quarterly bookkeeping for timely insights, some choose to manage their books on a yearly basis—especially smaller businesses, sole proprietors, or those with fewer transactions.

Yearly bookkeeping, although less frequent, can still serve its purpose when applied strategically. In this article, we’ll explore the advantages of yearly bookkeeping, who it’s most suited for, and what you need to keep in mind if you decide to adopt this approach for your business—especially in the context of running a business in Singapore.

1. Cost-Efficient for Small Businesses

For many sole proprietors or micro-enterprises, especially those that don’t have many transactions each month, yearly bookkeeping is the most economical option. Engaging a bookkeeper just once a year helps reduce accounting costs while still ensuring that all financial records are in order for tax filing and compliance.

If your business has low complexity and limited operational activities—like freelancers, part-time entrepreneurs, or home-based businesses—doing your books once a year can be a practical and sufficient approach.

2. Ensures Compliance with IRAS and ACRA

In Singapore, businesses are required to prepare financial statements and file annual tax returns with the Inland Revenue Authority of Singapore (IRAS), and submit annual returns to the Accounting and Corporate Regulatory Authority (ACRA).

Yearly bookkeeping allows business owners to:

Compile income and expense records.
Prepare profit and loss statements and balance sheets.
Submit accurate Estimated Chargeable Income (ECI) and Form C/C-S filings.

By consolidating your financial data once a year, you’ll still be able to meet your statutory obligations—just with fewer touchpoints throughout the year.

3. Saves Time for Non-Complex Operations

For businesses with predictable income sources or seasonal operations, monthly or even quarterly bookkeeping may not be necessary. For example, if you run a business that only operates during certain months (like a school holiday camp or seasonal online store), yearly bookkeeping gives you the flexibility to manage your time throughout the year and only consolidate once the financial year ends.

This approach allows business owners to focus more time on operations, marketing, or product development instead of constantly managing the books.

4. Allows for Year-End Planning and Analysis

While you won’t get real-time insights during the year, yearly bookkeeping still provides the opportunity to reflect on your business’s overall performance. Once the year is over and all the numbers are consolidated, you can:

See how your business performed in terms of revenue, profit, and expenses.
Identify your most profitable products or services.
Determine areas of inefficiency or overspending.
Prepare for the upcoming year with clear insights.

With one comprehensive report, you get a big-picture view that supports annual planning and budgeting.

5. Simple and Straightforward for Low-Volume Transactions

If your business only has a handful of invoices and expense receipts each month, accumulating them for an annual review can be manageable. As long as you stay organized throughout the year—keeping all receipts, invoices, and bank statements—you can reconcile everything during one year-end bookkeeping session.

The key to success here is proper record-keeping. Even if you’re only doing the books annually, your records must still be neat, accessible, and compliant with IRAS requirements in case of audit or review.

6. Works Well When Combined with Tax Planning Services

Many Singapore businesses choose to engage accountants only once a year—for both bookkeeping and tax filing services. This is often bundled as an annual accounting package, especially for exempt private companies (EPCs).

Your accountant or corporate service provider will:

Record your transactions.
Reconcile bank statements.
Prepare financial statements.
Submit ECI and income tax forms.
File annual returns with ACRA.

This bundled approach streamlines your compliance requirements and minimizes the need to manage finances internally.

7. Supports Business Closure or Dormancy

If your business is dormant (i.e., not actively trading or incurring expenses), yearly bookkeeping is typically sufficient and cost-effective. In Singapore, dormant companies are still required to maintain financial records and submit annual returns.

Yearly bookkeeping ensures you remain compliant with:

ACRA’s annual return filing.
IRAS’s requirement to keep records for at least five years.
Proper closure procedures if the company is being wound down.

8. Minimizes Administrative Burden

Let’s face it—bookkeeping can be tedious for many business owners, especially those wearing multiple hats. Choosing to do it once a year minimizes administrative distractions so you can focus on business growth and operations.

For time-strapped entrepreneurs, yearly bookkeeping provides a simple path to compliance without overwhelming your calendar.

9. Useful for Year-End Business Review and Strategy

The end of the year is naturally a time for review and reflection. Yearly bookkeeping coincides with strategic planning, budgeting, and performance evaluation. With a full-year report in hand, you can evaluate:

Sales trends.
Customer profitability.
Marketing ROI.
Cost structures.

This helps you set goals and KPIs for the new year. While you won’t have ongoing data throughout the year, your annual financials are still powerful tools for long-term strategy.

10. Keeps You on the Right Side of the Law

Even if you prefer minimal bookkeeping, the law in Singapore still requires businesses to maintain proper accounting records. These records must be retained for at least five years, even for dormant or struck-off companies.

Doing your bookkeeping yearly ensures that:

You have clean records in case of IRAS queries.
You can quickly prepare for any business sale, investor due diligence, or bank loan.
You avoid penalties from late or inaccurate filings.

Non-compliance in Singapore can result in serious consequences, including fines or disqualification of directors. So even if you choose to handle your accounts once a year, doing so thoroughly and professionally is critical.

Is Yearly Bookkeeping Right for You?

Yearly bookkeeping works best for:

Freelancers and sole proprietors with limited transactions.
Home-based or side businesses.
Dormant companies.
Seasonal businesses with predictable income cycles.
Entrepreneurs prioritizing cost-efficiency and simplicity.

However, it may not be suitable if:

You are GST-registered and need to file quarterly returns.
You have a high volume of transactions.
You need regular financial updates for business loans or investor reporting.
You want to make timely data-driven decisions throughout the year.

Final Thoughts

Yearly bookkeeping is a legitimate and often practical choice for certain types of businesses, especially in the early stages or with minimal financial complexity. It simplifies compliance, reduces administrative costs, and provides a clear overview for strategic planning.

However, success with yearly bookkeeping hinges on discipline and organization. You must maintain proper records and work with a reliable accountant or bookkeeping service to ensure accuracy and compliance.

In Singapore’s fast-paced and regulatory-heavy environment, the frequency of your bookkeeping should match the needs of your business. For some, that means monthly. For others, quarterly. But for many small business owners, yearly bookkeeping strikes the perfect balance between simplicity and responsibility.

If you’re not sure which bookkeeping schedule works best for your business, consulting with a professional accounting firm can help you make the right decision based on your goals and requirements.

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