How to Prepare for a GTO Audit in Singapore: Tips for Retail Tenants
Introduction
In Singapore’s competitive retail environment, especially in shopping malls, rental agreements often include a Gross Turnover (GTO) component. This means part of the rent you pay depends on your actual sales. To ensure transparency, landlords may require tenants to undergo a GTO audit—an independent verification of your reported sales.
Whether you’re a boutique shop, F&B outlet, or flagship store, preparing for a GTO audit is not just a matter of compliance—it’s a critical part of business professionalism. This article provides retail tenants in Singapore with actionable tips to ensure a smooth GTO audit process.
What Is a GTO Audit?
A Gross Turnover Audit verifies that the sales figures a retail tenant submits to the landlord match actual business records. This ensures the tenant is paying the correct amount of rent if the lease agreement includes a percentage-of-sales clause.
GTO audits are typically conducted annually or as required by the lease. The audit can either be initiated by the landlord through an external auditor or requested as a certified audit report from the tenant’s appointed auditor.
Why Preparing for a GTO Audit Matters
Failing a GTO audit—or even being unprepared—can result in:
-
Backdated rental adjustments
-
Fines and penalties
-
Breach of contract issues
-
Delays in lease renewal
-
Strained relationships with landlords
A well-prepared tenant not only ensures compliance but also strengthens their professional standing within the retail ecosystem.
Step-by-Step Guide to Preparing for a GTO Audit
1. Understand Your Lease Agreement
The first step is to thoroughly review your lease. Look for:
-
The exact definition of “Gross Turnover”
-
What sales must be included (e.g. online, vouchers, refunds)
-
Any exclusions permitted
-
Submission timelines
-
Audit rights granted to the landlord
Tip: When in doubt, clarify terms with the landlord early on. Legal ambiguity can lead to audit disputes.
2. Implement a Robust POS System
Invest in a reliable Point-of-Sale (POS) system that can:
-
Track all sales, including discounts and refunds
-
Generate itemized daily, weekly, and monthly sales reports
-
Export sales data in formats suitable for auditing
-
Integrate with accounting software and online sales platforms
A modern POS system provides clear data trails and simplifies the audit process significantly.
3. Keep Accurate and Complete Records
Auditors will want to review a range of documents. Ensure you keep and organize the following:
-
Daily and monthly sales summaries
-
Credit card and cash transaction records
-
Bank statements and settlement reports
-
E-commerce platform reports (Shopify, Shopee, etc.)
-
Sales tax (GST) filings
-
Vouchers and loyalty programme usage
-
Refund and exchange documentation
Document retention period: At least 5 years, as per common commercial audit standards in Singapore.
4. Reconcile Sales Data Regularly
Perform internal reconciliations to catch discrepancies early:
-
Match POS data with bank deposits
-
Check if credit card settlements align with reported revenue
-
Reconcile online and in-store sales when operating hybrid models
This helps avoid surprises during an audit and supports internal accuracy.
5. Train Your Staff on Audit Readiness
Frontline staff and cashiers should understand the importance of accurate sales recording. Proper procedures should be followed when handling:
-
Discounts and promotions
-
Refunds or voided transactions
-
Manual entries
-
Gift vouchers and store credits
Well-trained staff contribute to accurate recordkeeping and reduce audit risks.
6. Conduct a Pre-Audit Self-Review
Consider doing a mock audit internally or with your accountant. Review:
-
Whether all expected GTO elements are included
-
If all data points are consistent across systems
-
Any unusual spikes or gaps in reported sales
Identifying and fixing issues beforehand avoids unnecessary penalties.
7. Engage a Professional Audit Firm
Many landlords require GTO figures to be certified by a Public Accountant in Singapore. It’s advisable to engage a professional firm like Koh & Lim Audit PAC that has experience with retail audits.
Benefits include:
-
Credibility with landlords and mall operators
-
Accurate, audit-ready documentation
-
Peace of mind in knowing your compliance obligations are fulfilled
Contact Koh & Lim Audit PAC at +65 98638665 or Tommyksh@kohlimaudit.sg to get started with GTO audit support.
Common Mistakes to Avoid in GTO Audits
❌ Under-Reporting Online Sales
If your online store fulfills orders through your physical outlet (e.g. in-store pickups), these sales might count toward GTO and should be reported accordingly.
❌ Improper Refund Handling
Failing to track refunds correctly can lead to inflated GTO figures and distort reporting.
❌ Manual Recording Errors
Manual sales records are prone to human error. Automate wherever possible.
❌ Missing Submission Deadlines
Most leases require timely submission of certified GTO figures. Missing deadlines may result in default rent assumptions or penalties.
What Happens During the Audit?
During a GTO audit, the auditor may:
-
Visit your store and review physical POS systems
-
Inspect digital sales reports and compare to GTO submissions
-
Verify bank deposits against declared sales
-
Review sales reconciliations and supporting documents
-
Check for completeness of reporting (including refunds, promotions, etc.)
After the review, the auditor will issue a report or certificate verifying the accuracy of the reported GTO.
If you need help with GTO Audit, visit https://kohlimaudit.sg/services_post/gto-sales-turnover-audit-singapore/
