accounting system

Choosing the most Suitable Accounting Software

It is mandatory to keep records of all business transactions (actual and accrued) primarily for IRAS and XBRL reporting. For proper records of all trades, business owners must consider to set aside a budget in acquisition of an accounting software or a subscription-based system.

Regardless you are working as an accountant in a multinational corporation or an owner of an early start-up company with minimal transactions, the need for accounting software is indispensable unless the entire accounting function is outsourced to a third party. Based on our research, there are three main types of accounting software that most Singaporean companies use.

  1. A cloud-based or web-based system (there are three types of systems under this category, please read below)
  2. Accounting system as part of an ERP (Enterprise Resource Planning). Usually software-based
  3. Standalone system

It is essential to base your decision on as many factors as possible when choosing the most suitable accounting system. Alternatively, try to consult a professional to gather the most amount of information in this department.

What are the decisive factors for an accounting solution?


Ease of use is a crucial factor to consider. User-friendly accounting software must have a low learning curve, minimum spending on staff training, ease of navigation and information retrieval within the system. Ideally, the dashboard should provide an overview of current and past financial position, charts and graphs for business owners to make timely financial decisions. The system should also be able to generate crucial reports smoothly like balance sheets, cash flow statement, monthly profit and loss, debtors ageing reports, and so on.

Data Centralization

The adoption for cloud or web-based accounting systems has become increasingly popular these days, particularly for new entrepreneurs. The significant advantage of such a solution is accessibility as long as there is an Internet connection. Decision-makers can access financial data at any time, at any place and on any device (through an app or browser) with his/her login credentials. There are three types of cloud or web-based accounting system.

  • Subscription-based solution
  • Off the shelf system
  • Customisation or build from scratch

Subscription-Based Solution

The subscription-based system is similar to Office 365, whereby users subscribe to a monthly or annual fee. Users enjoy continual system updates, support and maintenance from the vendor as long as their subscription is active. Most providers also provide migration of financial data from your current system onto the cloud at free of charge.

On the other hand, system security for a subscription-based model is considered by far the best of out the three types of system mentioned above. The reason being the vendor usually has a dedicated team managing the entire system infrastructure around the clock. Any bugs or loopholes within the system are reported regularly and quickly identified by its vast userbase. Vendors are them notified and all bugs usually patched within a short period.

The main disadvantage is all financial records is stored on a third-party server. In other words, on the vendor’s server. Nevertheless, vendors that provide subscription-based systems are often reputable large IT corporations. They keep clients privacy and confidentiality as their utmost priority.

One of the factor to take note is that the subscription-based system may be expensive in the long run.

Off-the-shelf system

This system is readily built by third-party developers. Business owners acquire the source codes of the system from these developers and install them onto their servers. The most prominent benefit is inexpensive. Source codes are selling for only less than $300 in some instances, despite that the system is very well coded. If business owners are tech-savvy, he/she can easily install them effortlessly as full documentation is provided. Otherwise, business owners can engage the vendor (who distributed the source code) to install for them for just a fraction of a cost.
The breakdown of off the shelf system

  • Source code – $300
  • Engage developer for installation (if required) – $150
  • Domain name (.com) – $30 per year
  • Hosting cost (VPS) – $360 per year

Another slight advantage of such a system is that minor scalability and customization is possible in the future since the full source code is available.

Customized System

Build from scratch system is the most expensive and most complicated and is mostly used by large conglomerates or multi-nationals corporations. The cost can vary from $100,000 to a million dollars. These companies hire a team of developers to build the system via a bottom-up or top-down approach. Customise accounting system is commonly formed part of a system-wide ERP implementation. This kind of solution will take the most prolonged period to implement due to sophisticated integration from current to a new system, communication and approval within different divisions, data migration, staff training, testing, validation, pilot runs etc.

System Automation

Software automation helps to reduce human manual process and decrease human errors. Go through some of the influential factors below for business owners consideration.

  • Does the system able to capture and correctly classify GST transactions as well as generate accurate quarterly GST reports? IRAS has a list of appointed vendors for distribution of compliant accounting software.
  • Does the system able to handle multi-currency transactions? Can it update daily records with real-time forex rates and generate reports on default currency?
  • Does the system able to reflect complex accounting transactions based on the latest accounting standards? For instance, the accounting for Employee Share Options scheme, cryptocurrency trading, hedgings, derivatives and others?
  • Does the system able to automate assets depreciation, capital allowances, balancing charge and similar calculations?
  • Does the system automate all data backups periodically as manual backup is a very tedious procedure.
  • Does the system able to generate sales invoices/quotations and email to your customers automatically? Or at least have an ability to reduce human efforts?
  • Does the system capable of calculating CPF contributions to ease the burden on your human resource staff?

System Cost and Suitability

wdt_ID Types of System Cloud-based Subscription Cloud-based Off-The-Shelf Cloud-based Customized System ERP Accounting System Standalone System
1 Estimated one-time
cost (SGD)
Most of the time is none $300 to $1K $100K to $1 million
Depending on level of
$10K to $100K $1K to $5K
2 Estimated annual
cost (SGD)
$600 to $2,400 a year
Est at $50 to $200 a month
$30 a year domain cost
$360 a year for VPS
Depends Company
server maintenance cost
Licence fee costs approx
$50 to $80 per user a year
3 Suitability For 2 to 6 active users For 2 to 6 active users For 20 to 100 active users For 20 to 100 active users For 1 to 2 active users
4 System examples Xero & QuickBooks Can be sourced from
Codecanyon website
Nil as this is a
customized built solution
Microsoft Dynamics NAV or
MYOB System

Scroll the table to the right for full comparison.

System Features and Functionalities

Users access privileges
The system must able to configure users access rights to encourage segregation of duties among your employees.

Financial charts, diagrams and graphs
System ability to churn out up-to-date charts and ratios is essential for entrepreneurs to visualise the overall financial strength and measure the performance of the company.

Integration with current or legacy system
Certain system enables you to unify with your existing POS (Point-Of-Sales) system for seamless flow of sales transactions.

Setup a detailed chart of accounts
If your corporation involves multiple business nature, your accountant may advise you to specify a detailed chart of accounts for better data monitoring and control. Hence, it is recommended that your accounting software can perform this function.

Inventory Management
Trading businesses shall consider accounting software that has an inventory management module to keep track of your entire stocks balance, average costings and generation of relevant reports.

Group Consolidation
Consolidation refers to financial reporting at Group level. The system shall able to assist accountants in the consolidation of financial statements, elimination of related transactions, merger accounting, monitoring of group cash flow, and so on.

Screenshots Examples of Different Systems

Cloud-Based Subscription System – Xero

Cloud-Based Off-The-Shelf System

off-the-shelf accounting system

Cloud-Based Customized System

customised accounting system

ERP Accounting System – Microsoft Dynamics NAV

microsoft nav


Based on the common practice of average SMEs in Singapore, it all boils down to a five points below before one making the final decision on an accounting system.

  1. Sustainability: Company size and active users
  2. Adaptability: Easy to use
  3. Accessibility: Convenience of financial data access and sharing
  4. Cost: Short term and long term costs, which includes staff training, maintenance, licence costs, upgrades to system hardware and infrastructure
  5. Features: Process automation, value-added solutions, extra modules on an accounting system

Please feel free to consult our professionals for recommendation of an accounting software.