You will be able to set up a simple system that keeps every invoice, receipt and bank record you may need.
It is March, and you are trying to total last year's expenses. The software receipts are somewhere in your email, under three different addresses. The printing receipt from August was in your wallet and is now a faded strip of paper you cannot read. You know you paid for a train to a client in Jurong in May, but there is nothing to show for it. You end up claiming less than you spent, because what you cannot find, you cannot claim.
Good records fix that, and they protect you if IRAS ever asks a question. This lesson sets up a system that takes a few minutes a week.
Your tax return is a summary. Behind it, IRAS expects you to keep the records that support each figure: what you earned, what you spent and why. It can ask to see them, sometimes years after you filed. The period you must keep records for, and what IRAS expects to see, are set out on the IRAS website, so check it and set your own retention rule to match.
If a claim cannot be supported, IRAS can disallow it and charge the extra tax, and penalties can follow. Since your MediSave contribution follows the assessed income from lesson 2.2, a disallowed expense can raise that bill too.
There is a quieter benefit as well. Good records are how you find out how your business is doing. The figures in module 7, where you work out your rates, and module 8, where you review each quarter, all come from the same files.
Four kinds of document cover almost everything.
Invoices you issued are your income record. Number them in order and keep a copy of each, including any you cancelled, so there are no gaps that need explaining.
Receipts and bills for expenses are your expense record. Keep the full receipt or invoice, not just a card statement line, because the receipt shows what you bought. For mixed items, keep your note on the business share from lesson 4.2 with them.
Bank statements show the money actually moving. They are how you match invoices to payments and spot a client who never paid.
Contracts and agreements show what each job was and what you agreed to. They help with disputes as well as tax, and module 6 returns to them.
Keep all four in one place for each year: a folder named for the year, with a subfolder for each type. When a document arrives, it goes into its subfolder with the date at the start of the file name, such as 2026-05-14 taxi receipt client meeting. Sorting by name then sorts by date.
Most record-keeping fails in the same two places. Paper receipts fade or get lost, and email receipts get buried.
The fix for paper is to photograph each receipt when you get it, before it goes in your pocket. Your phone's camera or a scanning app is enough. Save the photo straight into the receipts folder, and the paper can go.
For email, set up a filter that sends receipts and invoices to one label or folder, or forward them to a dedicated address as they arrive. Then once a week, save the new ones into your year folder.
Mei uses a weekly routine on Friday afternoon. She saves the week's email receipts, checks her photos for any receipts she snapped on the go, files her issued invoices, and updates one spreadsheet. It takes her about fifteen minutes, with figures and timing from her own example.
You do not need accounting software to keep good records as a one-person business. A spreadsheet with two tabs is enough to start: one for income, with invoice number, client, date issued, amount and date paid, and one for expenses, with date, supplier, amount, category, business share and a file reference.
Simple accounting apps can do more, such as reading receipts from photos, linking to your bank feed or producing a profit and loss statement. They are useful once you have many transactions a month. Compare a few on what they cost and what they do for your volume of work, and pick one only if it saves time. Whatever you use, the habit matters more than the tool. A spreadsheet updated every week beats a paid app opened twice a year.
At the end of the year, your income tab totals your gross trade income, your expense tab totals your expenses by category, and your return in lesson 4.4 almost writes itself.
The first set-up takes less than half an hour: one folder for this year, four subfolders inside it, and this month's documents moved in and renamed with their dates. The hard part is not the set-up but the weekly habit, so put a fifteen-minute slot in your calendar for the same time each week before you finish.
Set up a records folder for this year with subfolders for invoices, receipts, statements and contracts, and file this month's documents.
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