Singapore is ranked amongst the top business destinations due to its ease of doing business. Her competitive advantages include strategic location, competitive tax regimes and a well-developed knowledge-based economy where accountability is a regular way of life. Therefore, accounting is a crucial element in the running of any large corporation. Be that as it may, accounting services in singapore are not free from challenges. Below are some of the most significant accounting challenges faced by large corporations in Singapore.
Variations in Accounting Procedures and Reporting Standards
Large corporations, especially those with foreign subsidiaries, experience challenges when it comes to tax compliance and developing consolidated books of accounts. Tax regimes and accounting standards vary across different countries thus complicating the accounting function of large corporations. Although there has been considerable progress in standardising accounting principles, multinationals are still, in no small degree, dependent on the legal, tax and education regimes of their countries of operation. Therefore each unit’s accounting procedures are nationally oriented. They are guided by the thoughts of government and academia from the respective country. Any change to the accounting system can have global repercussions and may require complex adaptations to develop consolidated and accurate presentations of the entire corporation.
In recent years, there have been much-publicised compromises of accounting and financial data. As the world grows more digital, cloud-based, security exposures are a prime concern for the accounting functions of large corporations. Pressure mounts for accounting services in Singapore to be more tech savvy and responsive to client demands. Accountants are increasingly using Software as a Service (SaaS) applications and mobile devices to work virtually exposing large corporations to data breaches. Thus, large corporates have to ensure that they don’t use out-dated systems or fail to sufficiently and regularly train their employees.
Maximizing Profits and Minimizing Costs
The global economy is experiencing a rise in the levels of commodification and outsourcing of services. Large accounting firms in singapore have to develop new ways of increasing productivity to remain competitive. Also, technology-enabled trading platforms, including e-commerce, are breaking the traditional barriers to trade. Therefore, accounting functions of large corporations, have to find the most efficient methods to minimise costs and ensure profits amidst varying dynamics and across different markets.
Cost Calculation and Pricing
Large corporations in Singapore reach out to markets beyond the Singaporean borders. Thus accounting services in Singapore must consider local and non-local competition and additional factors of production when setting the prices for a firm’s products. When accounting for large corporations, you have to deal with the dynamics of international markets and factor various production costs including shipping, labour, and distribution. As you endeavour for efficiency, you must also consider foreign currency exchange rates and competitors and benchmark prices appropriately.
Attracting and Retaining Talent
Large corporations in Singapore face a unique challenge of attracting and retaining the right talent, especially within the accounting functions. Traditionally, smaller firms, which employ over 90% of accountants, relied on foreign sources of expertise for their accounting staff requirements. However, Singaporean authorities recently introduced policies that tightened the entry of foreign labour into the country. The move by government aggravated competition for local talent making the hiring and retaining excellent staff more difficult.
As you explore accounting services options in Singapore, keep in mind these challenges and how to surmount them.