The world number one settled after a nervous start to put in an ultimately clinical performance in Singapore in which she broke Ivanovic at crucial moments in both sets.
Serena also proved her fitness, which was in question after she withdrew from this month's China Open.
"No one needs to drop-shot against me anymore," she said afterwards. "I was just trying to fight as hard as I could. I think I've been losing my voice from saying so many 'come-ons'."
The American recovered to earn the first break, but Ivanovic saved more break points at 4-1 before a net cord helped her break back and win three games in a row for 4-4.
However, the Serb wasted another break point when she volleyed long and as she served to stay in the set, Williams made her pay when she grabbed her second break and the first set 6-4.
An attritional second set came alive in the seventh game when Ivanovic's baseline smash winner was answered by Serena’s fabulous cross-court drop-shot as the American went 4-3 ahead.
And with Ivanovic serving at 4-5 down, Serena again raised her game as she drilled a backhand down the line before converting the first of two match points when the Serb went long.
Serena is trying to become the first woman to win the season finale three times in a row, as well as secure her fourth year-end world number one ranking ahead of Maria Sharapova.
Ivanovic, a former world number one, is playing the year-ending tournament for the first time since 2008.
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