Multicurrency accounting in Singapore
We explain how to set up a multicurrency bank account, build a multicurrency accounting system, and integrate it with our multicurrency accounting software
What is a multicurrency accounting system?
If you receive and send payments in other currencies than Singapore dollar, you need a multicurrency bank account. You then need to report for these transactions just as you do for all the others. A multicurrency accounting system records transactions in foreign currencies, adds them to financial statements and tax reports.
What are the multicurrency accounting standards?
The key part of multicurrency accounting is to show what the transaction was worth in base currency (that is, SGD) at the time it transpired. That’s why your invoices would usually show both: the foreign currency and its Singapore dollar equivalent as suggested by the IRAS requirements for foreign currency transactions.
What do I need for multicurrency accounting?
To set up multicurrency accounting, you’ll need:
- A multicurrency bank account. Make sure they process payments quickly and without high currency exchange fees.
- Bookkeeping platform to manage paperwork.
- An accountant who has experience managing multiple currencies to put together reports and statements. Alternatively, you can do it yourself if you have time and know what to do.
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FAQ
What is a multicurrency accounting system?
A multicurrency accounting system refers to an accounting system, often an online accounting software, which handles an organisation’s transactions across multiple currencies. It is used for companies that receive or pay amounts in currencies apart from the base monetary denomination used in the country they operate from.
For example, in Singapore, a business might have clients in the US or Europe or countries in Asia. Each would transact in their own currency while the company is incorporated in Singapore and pays taxes in Singaporean dollars. A multicurrency accounting system would automatically calculate exchange rates and present all the information in local currency.
Why do I need multicurrency accounting?
If you are a business operating in Singapore, then ten to the one you are dealing with several currencies. As the gateway to Southeast Asian markets, Singapore is a melting pot of companies and entrepreneurs from all over the world. Naturally, money from trading partners and customers flows in and out in a bewildering range of currencies – making accounting complex and extracting reports and insights even tougher.
So if you plan to run your business across nations and manage business transactions in diverse currencies, then you will certainly need a multicurrency accounting system and a multicurrency bank account.
How does multicurrency accounting work with you?
With us, you get Osome platform and a personal accountant. Our multicurrency accounting software allows businesses to add a base currency and specify the country where they file their taxes. The rest of the system is set up automatically. After that, you can add as many as 160 different currencies. The exchange rates are updated every hour automatically, and all transactions are converted and presented in the local currency in real-time.
At Osome, we use our own multicurrency accounting software to manage our clients’ financial needs. We process your invoices and receipts, prepare financial statements and management reports, file taxes and come up with exemptions and reliefs for your business.
Can I switch from another accounting firm to Osome?
Absolutely. We make the transition seamless on your end. We’ll get in touch directly with your current accounting service provider, take over all your financial documents, and audit them to make sure your company is compliant. We check for any loose ends with HMRC, organise historical data, and then prepare and file necessary reports. We offer up ongoing advice about relevant tax exemptions, helping you be smarter with your taxes. Now that your accounting is in good hands, you can focus on what you do best: running your business.
How does pricing work?
Our pricing is revenue based. We don’t charge on the number of transactions in your account or the number of invoices you upload. All prices are based on the financial year, not the calendar one.
Is it possible for me to hold foreign currency in my business bank account?
To transact in foreign currency, you need foreign currency or a multicurrency account. In Singapore, many local and global banks offer this facility.
A multicurrency account allows businesses to transact without paying steep exchange rates and reduce the processing time. The main banks offering multicurrency accounts in Singapore are HSBC, Standard Chartered, and UOB. Each has a slightly different offer, so it’s best to check on their individual sites for detailed information.
How to use a DBS multicurrency account?
A multicurrency account with DBS allows clients to hold up to 12 foreign currencies, as well as Singapore dollars in one account. You can also buy foreign currencies round the clock and get a linked Visa debit card. Opening the account is extremely simple and attracts no account opening fee.
There are 4 types of DBS Multiсurrency Accounts, and each has unique fees and features. You can use a DBS account to withdraw cash in any of the linked currencies, make payments, shop online, or make investments abroad.
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