During the Budget 2018 speech earlier this month, Finance Minister Heng Swee Keat announced that e-invoices could soon come into play for SMEs in Singapore. This initiative could help establish a framework to support small-medium sized companies in terms of productivity and managing their cash flows.
As Singapore move towards the digitalisation of operations, e-invoicing can help SMEs reduce operating costs, speed up transactions, minimise disputes and reduce errors. MCI also stated that it will be different from existing, digitised invoices and scanned invoices which still requires some level of human input to process. A 2017 US Federal Reserve Study indicated that 92 per cent of e-invoices were paid on time compared to 45 per cent of paper invoices.
This would mean that with e-invoicing, SME owners have better control over their payment cycles, resulting in better cash flow management, greater sustainability and growth for the business. Continue reading
Generally speaking, SMEs in Singapore provide employment for some 70 per cent of the local work force. Understanding how the Government can better support a thriving local private sector, as well as prepare it for disruptions brought about by technological advances could benefit SMEs tremendously.
Of the four points stated in the article, the balance between preventing the abuse of grants/schemes and the ease of application for said grants/schemes for SMEs, stood out. At present, SMEs are still required to go through rather lengthy forms to submit an application and can be tedious for micro SMEs. This is due to multiple reports of abuse of the Productivity and Innovation Credit (PIC) Scheme.
Following that, the Government will monitor schemes with take-up rates as the primary metric. Particularly, where financing and managing one’s company’s cash flows are key issues for SMEs, the Government aims to streamline the process of application. One can expect loans to be more accessible for SMEs, where loan sums involved are possibly too small for SMEs to qualify or even apply for.