ACCOUNTING & BOOK KEEPING SERVICES
Accounts payable outsourcing service helps in streamlining multiple tasks, including scanning, matching, approval, and affirmation. It gives staff the liberty to focus on other crucial matter business activities and helps in increasing processing times and quick payments. The accounts payable services help in operating various task without relying too much on the Accounts payable department.
Invoice Indexing and per-defined Workflow for Accounts Payables Service
Going digital with your invoices and generating a workflow can help the business in managing the flow of vendor invoices via going through several approval and quality check process. It also assures the same by proposing small technical changes in the existing system and generates a workflow as per the need for accuracy and timeliness of the payable cycle.
Need of Proper Invoice Processing
Supplier’s role is crucial in the growth of an organization. They deliver payments on time which makes the healthy flow of money consistent in the organization. An accurately processed invoice results in hassle-free clearance of payable and avail the benefit of discounts on early payments as well.
Importance of Payment Processing in Accounts Payable Processing
The credit period is an important aspect to manage by the organization as it directly affects the cash flow of the business. On one hand, paying early gives additional discounts thus saving money for the business, and on the other hand paying on due dates allows the business to enjoy a complete credit period and maintain working capital available all the time.
Accounts receivable services make quicker payments accessible in the organization. In order to meet the requirement of cash flow an organization must have effective accounts receivables process which makes sure that the company will receive payments in a specific period of time. Furthermore, it improves their collection rates and ensures faster processing of invoices which will lead to increase in the cash flow.
Accounts receivables massively affect the organization's cash flow activities. If not done effectively, it can debilitate the company’s finance. On the other hand, strong account receivables help organizations to produce higher incomes. Outsourcing these accounts receivable services to a team of experts can yield unexpected successful results.
Steps involved in the Process of Account Receivable Services
The steps engaged with account receivable services may differ for various sizes of firms. On one side, bigger firms have a bigger income and consequently, they don't hesitate before investing in profoundly skilled IT systems and credit management systems.
On the other hand, little firms have constrained assets and therefore they can't put such a great amount into recruiting. Rather, they outsource and spare their time and cost.
1. Establish Credit Practices
The organization needs to make a credit application process. On observing applicant’s credit-worthiness, it will decide whether to offer goods on credit or not. It is upto the organization to decide the offering of credit to single customers or other businesses.
Moreover, the organization will build a few terms and conditions for credit deals which must conform to Federal laws using a loan. Additionally, the document must mention the prerequisites and commitments of the customers. For example, the organization must make its customers known about the interest rates for the credits.
2. Invoicing and Billing for Customers
A receipt is a document that a client gets on the acquisition of specific products or services. The receipt comprises of data, for example, the expense of items/services rendered, details of the same, and the payment date.
Every invoice has its own unique invoice number that one can retrieve easily. They are given as per the customer’s choice, that is, either in physical form or electronic form. In most of the cases, companies prefer electronic invoice since they are cost-effective and convenient.
3. Monitor Account Receivable
At the point when you are finished with invoicing, the next step is to track accounts receivable with the help of Accounts Receivables Officer. The officer will scrutinize the payment deposited the supplier’s bank account, put it into the AR system, and allocate it to an invoice.
The officer is responsible for reconciling the AR ledger which ensures that payments are properly posted. Moreover, it issues monthly statements to its clients, which provides customers’ information about the amounts owed.
4. Accounting for Account Receivable
The Collection Officer finalizes the due date for payments of both bad and the unpaid debts. When the official has inspected the unpaid debts, the accounts department will make journal entries to record the deals. Moreover, the accounts department is likewise at risk for confirming discounts made on early discounts.
Accounting for Corporates
Corporate accounting is the process of recording, analyzing, and reporting financial transactions of a business organization. Corporate accounting involves maintaining financial records, preparing financial statements such as balance sheets, profit and loss statements, cash flow statements, and communicating financial information to stakeholders.
Corporate accounting also includes management accounting, which involves internal reporting and analysis of financial information to aid in decision-making by management.
Accounting for Government
Government accounting is the process of recording, analyzing and reporting financial transactions of a government entity. The primary purpose of government accounting is to ensure accountability and transparency in the use of public funds.
Government accounting involves maintaining records of revenue, expenditures, assets, liabilities, and equity. It also includes preparing financial statements such as the budget, statement of activities, and balance sheet.
Accounting for Personal
Personal accounting involves tracking and managing an individual's financial transactions, such as income, expenses, investments, and savings. Personal accounting includes maintaining records of financial transactions, preparing budgets, and analyzing financial data to make informed decisions.
Personal accounting also includes tax planning, which involves identifying strategies to reduce tax liability and maximize tax savings. This includes filing income tax returns, managing investments, and utilizing tax deductions and credits.
Bookkeeping services involve the systematic recording and tracking of financial transactions for businesses. It is the process of keeping accurate and up-to-date financial records for a business, including sales, expenses, receipts, and payments. Bookkeeping services are essential for businesses to maintain a clear understanding of their financial position and make informed decisions.
Some of the bookkeeping services that businesses can outsource or seek help with include:
a) Recording transactions: Recording all business transactions in the accounting system, including invoices, bills, receipts, and payments.
b) Bank and credit card reconciliation: Reconciling bank and credit card statements to ensure that all transactions have been recorded accurately.
c) Accounts receivable and accounts payable management: Managing outstanding customer invoices and vendor bills, sending payment reminders, and ensuring timely payment of bills.
d) Payroll processing: Calculating and processing employee salaries, taxes, and benefits.
e) Financial reporting: Preparing financial statements such as income statements, balance sheets, and cash flow statements.
f) Tax preparation: Preparing and filing tax returns for the business, including income tax, sales tax, and payroll tax.
Fundraising is the procedure of pursuing and collecting free-will financial contributions by interesting individuals, businesses, charitable trusts, or federal authorities. It refers to an attempt to infuse the capital in such a way as to convert an idea into a business. Further, it also refers to the recognition and requisition of investors or other sources of capital for Profit organizations.
The purpose of fundraising is to hold up the capital projects, funding, or operating expenses of current programs. It is not just a way of raising money, but also a way to promote start-ups and existing companies. It ensures that the investor can continue funding which helps the organization in achieving its goals. Fundraising
Below-mentioned are the checklist of the things to be considered before Fundraising
Accurate Legal structure
Proper Market analysis
Competition in the market
Growth Factor
Creating a business model
Building Investor’s trust
Equity capitalization
Creating a good network.
Research on Potential investors
What Methodologies are used by the Organizations for Fundraising?
Capital Campaigns
Corporate Support
Online Fund Raising
Earned Income
Grants
Membership Campaigns
Special Events
Fundraising in Companies
Fundraising in companies refers to a process of obtaining funds required for running or starting a company. It is a process of financial investment for product manufacturing, development, sales, and marketing, working facilities, and inventory within a company.
However, raising the funds for start-ups means an infusion of capital required to turn the plan into execution. It is very difficult for start-ups to acquire funds for their survival. Every start-up needs resources i.e. Initial capital, to finance product development, purchase machinery, and inventory, or pay salaries to its employee. Before approaching the investor, the company must have a detailed financial analysis and well -prepared Business plan and must be clear about why the company needs to raise the funds.
Companies raise their funds through various modes
Equity
Debenture
Venture Capital
Public Deposit
Loan
Payroll maintenance involves the process of ensuring accurate and timely payment of wages or salaries to employees. It includes maintaining records of employee time and attendance, calculating earnings and deductions, preparing paychecks or electronic transfers, and ensuring compliance with tax and labor laws.
Some common tasks involved in payroll maintenance are:
1. Recording employee attendance and hours worked
2. Calculating regular pay and overtime pay, if applicable
3. Calculating deductions such as taxes, social security, and benefits
4. Preparing and distributing paychecks or electronic transfers
5. Maintaining payroll records and ensuring their accuracy
6. Filing tax returns and making tax payments on time
7. Monitoring and ensuring compliance with labor laws and regulations
8. Addressing employee payroll-related inquiries and issues
Payroll maintenance is critical to ensure the smooth functioning of an organization and to maintain employee satisfaction. Inaccurate or delayed payments can lead to employee dissatisfaction, increased employee turnover, and legal issues. Therefore, it is essential to have an efficient and reliable payroll maintenance system in place. Many companies use payroll software or outsource payroll services to ensure accurate and timely payment of employee wages or salaries while complying with tax and labor laws.
GST
GST registration is a process that involves obtaining a unique Goods and Services Tax (GST) identification number from the government of India. GST is a value-added tax that is levied on the supply of goods and services in India. Any business or individual that engages in the supply of taxable goods or services must obtain GST registration.
The importance of GST registration lies in the fact that it is mandatory for any business or individual engaged in the supply of taxable goods or services. Failure to obtain GST registration can result in penalties and legal consequences. Additionally, GST registration allows businesses to claim input tax credit, which can reduce the overall tax liability. Overall, GST registration is an important requirement for doing business in India and should be obtained in a timely and accurate manner.
The documents required for GST registration in India may vary depending on the type of business and the nature of the goods or services being supplied. However, the following are some of the common documents that are typically required for GST registration:
• PAN card: A valid PAN card is mandatory for GST registration.
• Proof of business registration: This can include documents such as a partnership deed, memorandum of association, articles of association, or a certificate of incorporation.
• Proof of address: This can include documents such as a rental agreement, property tax receipt, electricity bill, or a telephone bill.
• Bank account details: The bank account details of the business or individual must be provided for GST registration.
• Authorized signatory details: The details of the authorized signatory, including name, address, and PAN number, must be provided.
• Photographs: Recent passport-size photographs of the business owner or authorized signatory may be required.
• Digital signature certificate: A digital signature certificate may be required for certain types of businesses or individuals.
GST return filing is a process that involves the submission of various GST returns to the government of India, depending on the nature and turnover of the business. GST returns are periodic statements that contain details of the transactions made by the business, including sales, purchases, and tax paid and collected.
Under the Goods and Services Tax (GST) regime in India, businesses are required to file monthly and annual returns. The following are the details of monthly and annual GST returns:
Monthly GST Returns
• GSTR-1: This return contains details of all the outward supplies made by the business during the relevant period.
• GSTR-2A: This is an auto-populated return that contains details of all the inward supplies received by the business during the relevant period.
• GSTR-3B: This return is a summary of the monthly sales and purchases made by the business, and it is filed by the 20th of the following month.
Annual GST Returns
• GSTR-9: This return is filed annually, and it contains a summary of all the transactions made by the business during the financial year.
• GSTR-9A: This return is filed by businesses that have opted for the Composition Scheme, and it contains a summary of their annual turnover.
• GSTR-9C: This is a reconciliation statement that is filed along with the GSTR-9 return by businesses whose annual turnover exceeds INR 2 crores. It must be certified by a qualified Chartered Accountant or Cost Accountant.
A GST registration obtained in India can be cancelled by the registered person or by GST Officer or by the legal heirs of the registered person, in case of death of the person registered under GST.
An individual can opt for GST Cancellation Online under the following circumstances:
1. Non-filing of GST Returns for 6 months
2. Non -Filing of GST Returns for 3 months u/s 10 of GST act
3. No business activity – If its close or death of the proprietor, discontinued or transferred fully, demerged, amalgamated with another legal entity.
4. Unlawful GST Registration (Registration has been obtained by means of fraud, willful misstatement or suppression of facts.)
5. Voluntary cancellation (Non-filing of GST Returns for 6 months)
6. Non-Voluntary / SUO Moto Cancellation
7. Change any constitution of business or any taxable person other than u/s 25(3) and u/s 22 & 24 of GST act.
INCOME TAX
Income tax filing is a process of reporting the details of one's income earned during a financial year to the Income Tax Department of the Government of India. It involves submitting a return of income, commonly known as the Income Tax Return (ITR) to the Income Tax Department.
Every individual, Hindu Undivided Family (HUF), firm, company, trust or any other entity that earns income in India is required to file an ITR for every financial year (which runs from 1st April to 31st March of the following year). The ITR form varies based on the nature of income, the source of income, and the category of the taxpayer.
The Income Tax Department uses the ITR to calculate the amount of tax that a taxpayer owes for the financial year. It also helps to determine the taxpayer's eligibility for deductions, exemptions, and tax credits.
Filing income tax returns is mandatory for taxpayers whose gross total income exceeds the basic exemption limit prescribed by the government. Even if the taxpayer does not have taxable income, they may still need to file a return if they meet certain conditions such as holding a foreign asset or having a bank account outside India.
It is important to file income tax returns within the due date specified by the government to avoid penalties and legal consequences. The due date for filing income tax returns varies depending on the nature of income, source of income, and the category of the taxpayer. The Income Tax Department provides several modes of filing ITR, including online filing, physical filing, or e-filing through intermediaries such as tax professionals.
Income Tax Returns or ITR is a form used to declare the net tax liability, claiming of tax deductions, and to report the gross taxable income. It is mandatory for individuals who earn a certain amount of money have to File IT Returns.
Firms or companies, Hindu Undivided Families (HUFs), and self-employed or salaried individuals must file ITR to the Income Tax Department of India.
ITR filing is the process by which taxpayer has to file a report of his total income earned on financial year. Through Income Tax Department official portal individual can complete their filing of returns. It has notified with seven various forms - ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6 and ITR 7.
It is mandatory for one to file income tax returns in India, if he comes under any of the following conditions
• Individuals who fall within the respective tax slabs.
• If it's a Company or Firm, irrespective of the profit or loss made in a financial year.
• If a tax refund needs to be claimed.
• If a loss under a head of income needs to be carried forward.
• If being a resident of India, one has an asset or financial interest in any entity located outside India.
• If being a resident of India, one is a signing authority in a foreign account.
• If one receives income derived from property held under a trust for charitable or religious purposes or a political party or a research association, news agency, educational or medical institution, trade union, a not-for-profit university or educational institution, a hospital, infrastructure debt fund, any authority, body or trust.
• If one is applying for a loan or a visa.
• If an NRI derives any or all of his/her income through sources in India, that income is liable to be taxable in India, and income tax returns for the same will be necessary.
Documents Required to Fill ITR
• Pan card
• Form 26AS
• Form 16A, 16B, 16C
• Salary Pay slips
• Bank statements
• Interest certificates
• TDS certificate
• Proof of tax saving investments
Tax Deducted at Source or TDS is the process wherein tax deduction takes place at the time of payment or when the payee’s account is credited with the money.
TDS return is a statement submitted to the Income Tax Department quarterly. Every deductor should mandatorily file the TDS return on time.
To file a TDS return, one must be thorough with the application procedure and the eligibility criteria. We present this article on how to file a TDS return to go over each segment thoroughly.
An individual making a transaction under the Income Tax Act needs to deduct tax at the source and deposit the same within an allotted time. Some payments for which one needs to file TDS return are as follows:
• Salary payments
• Income earned by winning lotteries, puzzles, etc.
• Income generated from securities
• Accruing income from competing in horse races and winning
• Insurance commission
• Rent payment
• Interest earnings
• Sale/purchase of immovable property
• Any payments concerning National Saving Scheme and other schemes
A tax audit is an examination of an individual or business's financial records by the government's tax authorities to verify that the tax returns filed are accurate and complete. The purpose of a tax audit is to ensure that taxpayers are complying with tax laws and regulations, and that they are paying the correct amount of taxes owed.
During a tax audit, tax authorities may review a taxpayer's income, expenses, deductions, credits, and other financial records to determine whether the tax returns filed are accurate. The audit process may involve an in-person meeting with a tax auditor or it may be conducted remotely using electronic records.
If discrepancies or errors are found during a tax audit, taxpayers may be required to pay additional taxes, interest, and penalties. However, if no errors or discrepancies are found, the taxpayer's returns will be deemed accurate, and the audit will be closed.
A tax notice is a document issued by the government's tax authorities to notify a taxpayer of an issue or discrepancy in their tax return. Tax notices can be sent for a variety of reasons, including failure to file tax returns, unpaid taxes, incorrect or incomplete information on tax returns, or discrepancies between reported income and information received from third-party sources, such as employers or financial institutions.
When a taxpayer receives a tax notice, it's important to carefully review the notice and understand the issue or discrepancy identified. Taxpayers may need to take corrective action, such as filing an amended tax return or paying additional taxes owed. Failure to respond to a tax notice can result in additional penalties and interest.
If a taxpayer is unsure how to respond to a tax notice or needs assistance in resolving the issue identified, they may consider working with a qualified tax professional or contacting the tax authority for guidance. It's important to respond to tax notices promptly and accurately to avoid further complications or potential legal action.