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Beginner’s Guide on Starting an Accounting Business in Singapore
Some people may have this false conception that accounting agencies only file taxes and audit reports from time to time. However, an accounting agency’s service goes way beyond that. Accounting businesses are essential to almost every industry. To some, who may not be the best at calculations or always tend to fall behind their taxes, accounting agencies are their saviours in helping them out.
People rely on accounting agencies for various reasons, including to ensure their businesses stay on the right financial track and to get professional advice from expert accountants. Apart from that, companies go to accounting agencies to plan out the future of their businesses. Starting an accounting business in Singapore can be a great way to put your accounting credibility to good use. If you believe in your skills and you’re ready to take them to the next level, keep on reading.
Aside from the benefits that you can offer others, owning an accounting business as an entrepreneur also has its perks. In Singapore, plenty of accounting firms have gone on to become partners with the local firms. Apart from that, the accounting market in Singapore is quickly growing and adapting new business advisory methods and state of the art technologies. This gives the accounting firms in Singapore an edge to become more comprehensive and competitive.
Needless to say, there is so much potential and an exciting future for those who are starting an accounting business in Singapore. If you’ve always wanted to set up your very own accounting business in Singapore, you’ve come to the right place. This article will discuss what an accounting business is all about, how you can break into it and what you will be needing. Most importantly, we’ll also tell you where you can find reliable and quality help if it all gets too much. Let’s dive right in!
Also, check out our guide to company registration in Singapore for more information!
What Is an Accounting Business?
An accounting business specialises in providing accounting services to companies and everyday people. Services offered by accounting agencies include auditing, bookkeeping, preparing and reviewing finances, filing taxes, and so much more. Currently, there are about 55 000 accountants in Singapore.
There are a few different types of accounting business that you might have come across, such as the following:
1. Public Accounting Businesses
These types of firms usually provide typical accounting services such as auditing, bookkeeping, etc. Public accountants help their clients to ensure that their financial records and statements are up to date and precise. Public accounting firms also act as the third party when checking a company’s financial statements. Aside from serving companies, they also have a vast client base, including individuals, government bodies, non-governmental organisations, etc. An important thing to note about public accounting firms is that these firms are independent and not a part of any company or organisation.
2. Bookkeeping Accounting Businesses
Bookkeeping firms are much smaller compared to other accounting businesses. Catering to mainly small to medium companies, bookkeeping businesses provide services such as processing payroll, tracking companies’ expenditure, preparing taxes, VATs and more. Essentially, smaller companies hire bookkeeping accounting businesses to keep their financial records efficiently and systematically. However, unlike giant companies, small to medium companies often do not have the budget to run their own accounting department. Therefore, most of the smaller companies choose to outsource services from bookkeeping accounting businesses.
3. Forensic Accounting Businesses
A forensic accounting firm specialises in uncovering illegal activities within a company or an organisation. Not only that, but forensic accountants are also responsible for finding, collecting and reconstructing financial data. Forensic accountancy applies a wide range of accounting skills to perform complex financial investigations. This accounting service is also employed by the government and the local law enforcement body to launch investigations in suspicious activities. Among the cases investigated by forensic accountants are money laundering, misappropriation of funds, identity theft, etc.
You do not have to follow the flow of other accounting companies. Know where your expertise lies and leverage it. Aside from that, you may also have to do additional research on the Singaporean accounting market. This way, you can identify what the people need and help them solve their accounting problems accordingly. Company incorporation does not have to be complicated.
Setting Up Your Accounting Business in Singapore
You may wander out of all the places to start a business; why should I begin my venture in Singapore? We’ll tell you why.
Being the major international destination in Asia, starting an accounting business in Singapore has a plethora of advantages. Not only do you get to enjoy the many incentives and tax benefits offered by the Singaporean government, but you also get to conduct your business in the world’s leading accounting hub and business centre. Apart from that, as an entrepreneur, you will be working side by side with the best minds in the business.
The accounting industry in Singapore has always flourished, all the more in recent years when the Committee to Develop the Accountancy Sector (CDAS) was created. The establishment of CDAS in 2008 has propelled Singapore to become the leading accountancy hub in the Asia-Pacific market. Furthermore, CDAS has plans to double the accountancy industry’s GDP and increase the accountancy professionals export as well. Therefore, in the coming years, the accountancy sector in Singapore is expected to grow even more.
As a thriving industry in Singapore, the need for local and international accounting professionals has always been a significant demand. In 2019, the total annual revenue made by accounting firms in the sector in Singapore reached a whopping 2.58 billion. Hence, if you carefully execute your accounting business, you might just hit the banks.
What Licences You’ll Be Needing
Under the Accountants Act, public accountancy services in Singapore must register with Accounting and Corporate Regulatory Authority (ACRA). ACRA is the national regulatory body responsible for corporate service providers, business entities and public accountants in Singapore. If you want to know more about ACRA’s policies, you can check them out here.
One of your very first choices is deciding what type of business structure you’ll be going for. There are three types of accounting structures you can choose from, and they are:
- Public Accounting Corporation
Also known as PAC, this type of business structure needs to be compliant and registered with the Accountants Act and Companies Act. As a corporation, PAC is a separate legal entity. This means that the shareholders of the company cannot be personally held accountable for debts. Those who wish to establish this company are legally required to have the acronym ‘PAC’ after the company’s name. The registration fee for PAC is $615. For in-depth information on setting up PAC, you can refer here.
- Public Accounting Firms
Known as PAF, these firms are a sole-proprietorship or a partnership type of business entity. Unlike PAC, PAF is not a separate legal entity. Meaning, the members of this type of company can be personally held accountable for the company’s debts. The fee for registering PAF is $430. Read more about PAF here.
- Accounting Limited Liability Partnership
As the name itself goes, LLP is a limited liability partnership and a separate legal entity from the company’s partners. In an ALLP, partners of the company can be personally held responsible for debts if their own wrongdoings caused them. However, partners are not personally held accountable for the debts caused by the actions of other partners to the ALLP. To register for an ALLP, you need to pay $115 in fees. If you’re interested to know more about the ALLP requirements, click here.
We understand that choosing a structure for your accounting business may be confusing. There are many aspects, such as entity type, legal status, statutory obligations, taxes, etc., that have to be taken into account. If you need a hand in helping you make the right pick, you can always engage with a corporate service provider in Singapore to advise you on setting up a business.
What We Can Do for You
As an accounting firm ourselves, we know first-hand how things are done. We understand that starting an accounting business is a huge task, especially if you are new to the industry. If you prefer to pay attention in your business, you can always reach out to a professional to take it off your hands and cover the bases. That’s where we can be of service.
We are 3E Accounting. You might have heard of us in Singapore – we also have our branches globally! Over the decade, our pool of multidisciplinary experts has offered our one-stop business solutions for every type of need for our clients. In 3E Accounting, we assist our clients before, during and post-company incorporation – we will be there every step of the way for you. If you are curious to know more about our services and what we can do for you, contact 3E Accounting today!