Common Mistakes Tenants Make in GTO Audit Submissions
Common Mistakes Tenants Make in GTO Audit Submissions
For many tenants operating in Singapore’s shopping malls, a Gross Turnover (GTO) audit is a standard requirement outlined in the lease agreement. These audits help landlords validate the sales data reported by tenants — especially important when a portion of the rent is tied to a tenant’s actual sales revenue.
While many tenants understand the need for GTO audits, errors in audit submissions are more common than one might expect. These mistakes can lead to delays, penalties, disputes with landlords, or even breaches of lease terms.
This article highlights the most common mistakes tenants make when submitting their GTO audits in Singapore and how to avoid them.
What Is a GTO Audit?
A Gross Turnover (GTO) audit is an annual financial review conducted by an independent audit firm to verify a tenant’s reported sales turnover. Many lease agreements — particularly in malls and commercial complexes — require tenants to submit these audit reports to ensure accurate calculation of rent that is based on a percentage of gross sales.
To engage a professional GTO auditor or learn more, visit:
👉 https://www.auditservices.sg/gross-turnover-gto-audit-singapore/
Mistake #1: Misunderstanding the Definition of Gross Turnover
Not all tenants fully understand what counts as “Gross Turnover” according to their lease agreement. While the term may seem straightforward, each contract can define it differently.
Some leases include:
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In-store sales
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Online sales fulfilled from the outlet
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Third-party delivery platform revenues (e.g., GrabFood, Deliveroo)
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Redeemed vouchers
Other leases may exclude:
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Sales tax (GST)
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Staff meals or internal use
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Refunds or returns
Failure to understand these inclusions and exclusions leads to underreporting or overreporting — both of which can cause audit discrepancies and problems with your landlord.
✅ Solution:
Read your lease carefully and clarify any ambiguous terms with your landlord or auditor early in the process.
Mistake #2: Late Submission of GTO Audit Report
Most lease agreements specify a deadline by which the audited GTO report must be submitted — commonly within 3 to 6 months of the tenant’s financial year-end. Many tenants miss this deadline due to poor planning, resulting in lease violations or penalty charges.
✅ Solution:
Mark the GTO audit deadline clearly in your company’s calendar and start preparing at least two months in advance. Engage your auditor early and ensure all data is available well before the deadline.
Mistake #3: Disorganized or Incomplete Sales Records
One of the most frequent issues auditors face is the lack of well-maintained sales records. Many tenants submit POS summaries or Excel files without proper backup documentation, such as:
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Daily transaction logs
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Bank statements
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Delivery platform statements
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E-commerce order breakdowns
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Reconciliation reports
This delays the audit and casts doubt on the reliability of your reported figures.
✅ Solution:
Maintain clean and organized monthly sales folders. Include daily sales logs, payment gateway reports, and bank reconciliations for full transparency.
Mistake #4: Excluding Online or Delivery Platform Sales
Retail and F&B tenants often forget to include online sales and third-party delivery revenues, especially when these orders are fulfilled from their physical outlet. Depending on the lease, these may count towards Gross Turnover and should be included.
Examples of platforms commonly overlooked:
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GrabFood
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Deliveroo
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Foodpanda
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Shopee
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Lazada
✅ Solution:
Check your lease to see if such sales are included in GTO. If yes, ensure you collect and report monthly summaries from these platforms.
Mistake #5: Lack of POS and Bank Reconciliation
Your Point-of-Sale (POS) records must match your bank deposits. If there’s a mismatch between reported sales and actual banking transactions, it raises red flags during the audit.
Some common causes of mismatch:
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Timing differences in settlement
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Cash discrepancies
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Missing receipts or invoices
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Improper voiding or refund records
✅ Solution:
Perform monthly reconciliation of POS data against bank statements. Flag and explain any variances so your auditor isn’t left guessing.
Mistake #6: No Clear Contact Point for Audit Queries
During the audit process, auditors often need clarifications or supporting documents. Delays in communication can stall the entire audit and increase the risk of missing your submission deadline.
✅ Solution:
Assign a designated staff member familiar with sales and financial records to handle all audit queries. Keep lines of communication open and responsive.
Mistake #7: Relying on Internal Staff Without Audit Experience
Some tenants attempt to prepare their GTO audit submission internally without consulting a professional auditor, thinking it will save costs. However, most landlords require a certified audit by a licensed public accounting firm. Submitting unaudited or incorrectly prepared reports can result in non-compliance.
✅ Solution:
Work with a qualified GTO audit specialist in Singapore to ensure your reports are accepted by landlords. For expert help, visit:
👉 https://www.auditservices.sg/gross-turnover-gto-audit-singapore/
Mistake #8: Failure to Retain Proper Documentation
Some tenants dispose of sales slips, order records, and bank confirmations after monthly reconciliations, thinking they won’t need them again. However, these are often requested by auditors as supporting evidence.
✅ Solution:
Maintain a minimum of 2 years’ worth of supporting documents related to sales, including all transactional data and communications related to rent reporting.
Mistake #9: Incorrect Revenue Classification
Retailers that offer both taxable and non-taxable goods or operate across multiple channels sometimes misclassify revenues, leading to inaccurate GTO reporting. For instance, distinguishing dine-in vs. delivery or product vs. service sales can be confusing.
✅ Solution:
Work with your accountant or auditor to create clear sales categories and apply consistent rules for classification across all months.
Mistake #10: Not Communicating with the Landlord
Some tenants assume the audit process is internal and fail to notify or coordinate with their landlord until the final submission. This can lead to last-minute conflicts over audit formats, acceptable firms, or data interpretations.
✅ Solution:
Open communication with your landlord about your appointed auditor, timelines, and any clarifications early in the process.
Final Tips for a Smooth GTO Audit Submission
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Start preparations early (2–3 months before year-end)
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Maintain organized digital and physical records
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Understand your lease’s unique GTO definitions
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Reconcile POS with bank and e-commerce platforms monthly
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Engage a professional auditor with GTO experience
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Submit the audit report on or before the due date
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Respond promptly to auditor queries
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Retain supporting documents for future reference
Conclusion
GTO audits are more than a routine compliance task — they are essential for maintaining trust and transparency between tenants and landlords in Singapore’s competitive retail landscape. By avoiding these common mistakes and preparing in advance, tenants can ensure a smooth audit process, reduce potential conflicts, and uphold their lease obligations.
If you’re unsure how to approach your upcoming GTO audit, consider consulting an experienced audit firm that specializes in commercial lease audits. For more guidance or to engage a professional, visit:
👉 https://www.auditservices.sg/gross-turnover-gto-audit-singapore/