Avoid Unnecessary Expenses: What Not To Spend PSG Funds On?

The Productivity Solutions Grant (PSG) is a government initiative in Singapore designed to encourage you to adopt pre-approved IT solutions to boost productivity and operational efficiency. It covers a wide range of sectors, from retail and F&B to logistics and professional services. 

However, not every business makes the most out of PSG grants. In fact, some companies waste funds on unnecessary expenses, resulting in missed opportunities for growth. In this guide, we will highlight what not to spend PSG funds on, ensuring you make the most of your grant while staying compliant.

1. Avoid Unapproved Vendors

PSG funds must be spent on approved vendors and solutions. Some businesses unknowingly engage vendors who are not part of the PSG grant program. This results in invalid claims, which means you can lose the benefits of the grant.

Why Is It Important?

• Using non-approved vendors invalidates your PSG claim, resulting in financial losses.
• Approved vendors are familiar with PSG requirements and ensure smooth service.
• Working with listed vendors speeds up the application and claim process.

How to Avoid This Mistake?

• Use the GoBusiness PSG vendor directory to find pre-approved vendors.
• Ask vendors to show proof of their PSG eligibility.
• Select vendors experienced with your business model or specific industry.

Tip: If you are considering Qashier PSG grant solutions for a POS system, ensure they are listed in the PSG grant directory to avoid claim issues.

Also Read :- Overcoming PSG Grant Application Delays in Singapore

2. Don’t Spend on Unnecessary Software

PSG grants aim to support essential digital solutions, not luxury or non-core tools. Many companies fall into the trap of purchasing complex software with features they don’t need, thinking that a bigger investment will lead to better returns.

Examples of Wasted Software Purchases

• Luxury CRM systems for small businesses with limited data needs.
• Complex AI or data analytics tools when simpler alternatives would suffice.
• Accounting software upgrades that replicate existing ERP features.

What You Should Do Instead?

• Focus on tools that meet your current and foreseeable business requirements.
• Start small and upgrade as your business grows.
• Use trials to determine if the software is worth the investment.

Example: An online store might get better value by investing in Shopify’s PSG grant-supported features for payment gateways, rather than buying unrelated AI tools.

3. Steer Clear of Duplicate Systems

Duplicate systems waste resources and complicate your operations. PSG grants should only be used for solutions that address genuine gaps in your business.

Common Mistakes

1. Buying multiple POS systems that serve the same purpose.
2. Investing in overlapping accounting tools without integrating them.
3. Acquiring project management software when you already have functional internal processes.

How to Avoid Redundancy?

• Evaluate your existing tools and software to identify overlaps.
• Use PSG grants to improve what you already have rather than buying entirely new tools.
• If you already have a POS system, consider platforms like Qashier PSG grant solutions to integrate payments seamlessly.

4. Avoid Spending on Non-Digital Services

The PSG grant focuses on digital transformation, so funds spent on non-digital services will not be eligible for reimbursement. Some businesses mistakenly allocate funds toward traditional advertising or manual labor, assuming these will qualify.

Examples of Ineligible Services

• Printed brochures or offline marketing campaigns.
• Manual administrative services.
• Traditional training programs that don’t involve technology or software.

What You Should Focus On?

• PSG grants SEO solutions to improve your website’s visibility and search rankings.
• Social media marketing grants to create campaigns on Facebook, Instagram, or LinkedIn.
• Cloud-based accounting software or Shopify Singapore tools that digitize processes.

Also Read :- Top Reasons For PSG Application Rejection and How to Fix Them?

5. Skip Luxuries 

While a well-designed website can help attract customers, luxury features can inflate costs without providing a meaningful return. Use PSG funds for practical upgrades instead of flashy extras.

Examples of Luxury Features to Avoid

• Excessive animations or design elements that slow down website loading speed.
• Custom fonts or designs that add no functional value.
• Advanced chatbots when basic live chat functions are sufficient.

What to Invest In?

• SEO improvements to improve your Shopify store’s discoverability.
• Payment gateway integration for seamless transactions.
• Singapore delivery services to improve logistics and customer satisfaction.

Pro Tip: Focus on tools like Shopify PSG grant eCommerce solutions that align with your growth strategy.

6. Unqualified Web Developers

Many businesses make the mistake of hiring inexperienced web developers, leading to poor website performance and increased maintenance costs.

Why Hiring Experienced Developers Matters?

• Experienced developers minimize bugs and downtime.
• Developers familiar with PSG grants ensure your project meets eligibility criteria.
• A skilled web developer in Singapore can create a scalable website.

What to Look For?

• Choose developers who have worked on PSG grant-funded projects.
• Review the developer’s work on Shopify Singapore stores or other digital platforms.
• Select a website design company in Singapore with positive client feedback.

7. Overspending on Marketing Platforms

Overspending on digital marketing tools can drain your budget without generating adequate results. It’s important to invest wisely by choosing the right platforms that align with your business goals.

What to Avoid?

• Purchasing multiple email marketing platforms when one is sufficient.
• Subscribing to expensive SEO tools without fully using their features.
• Buying social media management tools that do not align with your strategy.

How to Spend Wisely?

• Apply for social media marketing grants to cover platform costs.
• Focus on PSG grant SEO services to increase organic traffic.
• Choose Shopify-compatible tools like Klaviyo for automated email marketing.

8. Don’t Rush the Application Process

Rushing through your PSG grant application can result in errors or missing documents, leading to delays or rejections.

How to Apply Correctly?

• Know what is covered under the PSG grant, such as Shopify Singapore features.
• Ensure all required documents are submitted, including vendor invoices.
• Work with Approved Vendors to speed up the claim process and ensure compliance.

Pro Tip: Plan ahead and consult the PSG grant list for eligible services before applying.

9. Funds for General Operations

PSG funds are not intended for operational expenses like rent, salaries, or utilities. Misusing the grant for these purposes can result in a denied claim.

What Not to Spend On?

• Office rent or utilities.
• Employee wages or bonuses.
• Non-digital equipment like office furniture.

What to Focus On Instead?

• Invest in digital marketing tools that boost sales.
• Implement eCommerce solutions to improve your online store.
• Use PSG grants to automate processes for long-term efficiency.

Also Read :- Emerging Mobile Commerce Trends in Singapore

10. Poorly Planned Delivery Solutions

Delivery logistics play a key role in customer satisfaction, but poorly planned delivery systems can lead to losses.

How to Plan Delivery Solutions?

• Choose reliable delivery services in Singapore with experience in eCommerce.
• Integrate delivery solutions with your Shopify store for better order tracking.
• Avoid unnecessary upgrades if your current delivery system meets your needs.

11. Avoid Ignoring Long-Term Value

Many businesses focus on short-term results, but the best investments offer long-term benefits.

How to Focus on Long-Term Value?

• Choose scalable solutions that grow with your business.
• Invest in SEO and digital marketing tools that deliver ongoing returns.
• Build strong vendor relationships for future projects.

Conclusion

By avoiding these common mistakes, you can maximize the value of PSG grants. Focus on practical, scalable solutions and work with approved vendors to ensure compliance. Careful planning and wise spending will unlock the full potential of PSG funds, helping your business thrive in the digital economy.