How It Works
This page walks the whole path from signing up to holding IRAS-ready records, in the order a new sole proprietor actually does it. Read it once before you start so nothing in setup is a surprise.
Set up your cloud ledger in seven steps
A plain, numbered path through registration details, the accounting period, the bank feed, invoices, expenses and the year-end statement of accounts — so you know exactly what each sitting asks of you.
Seven sittings, in the order you will do them
Fol. 03-
1
Register the business details exactly as ACRA has them
Your book is only as correct as its header. Enter the business name and UEN as they appear on your ACRA registration, with the same spelling and punctuation. If you trade under a different name, keep the registered name in the records and note the trading name separately. Invoicing, banking, and compliance setup all point back to this one identifier, so get it right on day one.
-
2
Choose the accounting period and confirm the start date
A sole proprietor's records begin at the start of business, not at the first tax deadline. Set the accounting period in the ledger to the year you want to report, and add the business start date. Everything you enter after that sits in a period rather than floating free, which is what makes the year-end statement possible.
-
3
Connect the bank account the business actually uses
Link the account where clients pay you and where business expenses leave. If the business account is also your personal account, that is normal for a sole trader; the reconciliation step is what separates the two. The feed imports lines, and your job is to say what each one is.
-
4
Match the first bank lines and set your opening position
Start matching from the first imported line. Client payment against invoice, supplier charge against expense, bank fee categorised as a business cost. Anything you cannot explain stays unmatched and visible. That habit at the start is what keeps the margin clear later.
-
5
Create your invoice template with the UEN in it
Build one template and reuse it. Business name, UEN, invoice number, client details, description, amount, and payment terms. Set a numbering sequence so no invoice is missing and none repeats. From then on, raising an invoice is filling a form, not designing a document.
-
6
Capture expenses as they happen, with categories
When you pay for something business-related, photograph the receipt and choose a category. Allowable business expenses are what bring your adjusted profit down, and a category is what makes that happen at filing time. Do this at the counter and the year-end task becomes a sort, not a search.
-
7
Review the period and prepare the statement of accounts
Near the end of your accounting period, run the income and expense report and check it against the matched bank lines. From there you can prepare the Profit and Loss Account and the Balance Sheet that make up your statement of accounts. Remember that the accounts must be prepared even when they are not submitted with your return.
The first sitting is longer than the rest
Fol. 04Business details, accounting period, bank connection
The three opening steps fit into one pass because they feed each other. You are setting the frame the year will be read in: the UEN the ledger is stamped with, the period the year is cut to, and the account the movement comes from. Expect the longest single session here, and expect the workspace to look sparse until step four.
- Business name and UEN typed exactly as ACRA holds them
- Accounting period set, business start date added
- The one bank account the business actually uses, linked
Still ahead: matching, invoices, expenses, statement of accounts
A week of lines, one short pass
Once the frame is set, a sitting is short: match the new bank lines, attach what came in, categorise what went out. Ten minutes on a Friday beats an afternoon at year-end.
Feeds the year-end statement, in small pieces
If you started trading months ago, the first sitting stretches further: you are backfilling a period as well as opening one. Enter or import the transactions from the business start date, and treat the first matching pass as its own task. A complete period matters more than a tidy one.
What the counter habit buys you
Receipts kept at the counter, not searched for at year end
The steps only pay off if the small habits run alongside them. A photograph and a category at the till takes seconds; the same receipt dug out of a drawer in March takes an evening. That single habit is what turns step seven from a scramble into a review.
Keep the paper anyway. The photograph is your working record; the original is what supports it if a figure is ever questioned.
The record-keeping side, in plain words
The steps above build the record; these are the rules the record has to answer to. Nothing here is exotic — it is the ordinary IRAS expectation for a sole proprietor, written without the jargon.
- What must be kept
- Source documents that back up every entry — sales invoices, receipts for business purchases, bank statements, and a note of anything paid out of your own pocket. Digital copies are fine; the original scanned or photographed at the time of the transaction is easier to file than to hunt for.
- Allowable expenses
- Costs incurred wholly and exclusively in earning your business income. Materials, phone and internet split for business use, software subscriptions, a proportion of home utilities where you work from home. Personal spending stays out of the business ledger — the category you chose in step six is what keeps that line clean.
- GST threshold
- Most sole traders start out not registered for GST. Registration becomes compulsory once your taxable turnover passes the threshold IRAS sets, measured on a rolling basis. Track turnover as a running figure in the ledger so you can see the line coming rather than learning about it after the fact.
- The statement of accounts
- Two documents, prepared from the ledger: the Profit and Loss Account and the Balance Sheet. They must be ready even when they are not submitted with your income tax return — the figures on the return come out of them, and IRAS may ask to see them.
Five years
Keep your records for five years from the end of the year they relate to. The photograph you took at the counter in step six is what satisfies that in practice — as long as it is filed where you can find it five years later, and not only on the phone you replaced.
Before you open the workspace
Fol. 06- How long does initial setup take?
- The business details, period, and bank connection are usually the first sitting. The first reconciliation pass takes longer than later ones, because you are classifying a backlog rather than a week of transactions.
- Do I need to connect a bank account to start?
- No. You can enter income and expenses manually and attach documents, then connect the feed when it suits you. The reconciliation discipline still applies either way.
- What if I started trading months ago?
- Set the business start date accurately, then enter or import the transactions since that date. Backfilling is less pleasant than starting clean, but a complete period matters more than a tidy one.
Next step
Start the seven steps in your own workspace
Open a cloud ledger workspace and work through step one at your own pace. If anything in the setup is unclear — the accounting period, the UEN format, what to do about an old bank account — ask before you start rather than after.
Questions about IRAS record keeping in detail? The IRAS record keeping guide covers the documents, the five-year rule, and the statement of accounts in one place.
LedgerLite SG — how it works
Seven steps, one continuous ledger