Setup of Accounting System Services in India – Everything You Need to Know
The setup of Accounting System Services in India is vital. Bookkeeping is the procedure of recording, in step by step order, daily transactions of a company. It forms part of the accounting information system. In the other side, accounting is a knowledge system — including the method of tracking, classifying, summarizing, publishing, assessing and presenting a business financial situation and performance — to convey it to company decision-making actors.
Maintenance of account books is critical in any sector, be it small or large. Unfortunately, most of the businessmen often neglect this procedure, which has a direct adverse effect on the business.
Begin to Set Up a Small Business Accounting System
For the ease, precision and confidentiality of account books, small businesses should manage record books in an automated mode. The Corporations Act 2013 also calls for the management of online record books under section 128. A range of tools for holding account records at a reasonable rate is available on the market. Each expenditure must be recorded in compliance with applicable accounting standards and guidance when keeping account documents since these concepts/laws ensure the accuracy of all company and law requirements. The following considerations will, therefore, be addressed when planning books for the account.
Double Entry Accounting System: That serves as a system for identifying errors. Any transaction has two sections according to the double-entry accounting system; hence it impacts two ledger accounts when reporting a transaction. It requires a debit in one account and a credit in another. If the sum of debts is not equal to the corresponding sum of credits, then this means that there has been an error.
Accrual Basis Accounting: Accrual accounting framework is considered a standard accounting procedure globally, as it offers a more reliable indicator of the performance of a business because it brings into account both sales and expenditures independent of cash receipts and expenditures. For example, an expense incurred at the end of that period for which no invoice was received is considered an accrued expense and is still recognized.
Recording of Every Transaction: Each financial activity, whether it be a buy or selling, expenditures or profits, deposits or refunds must be reported in the records or accounting system regularly. Also, the documentation of each activity allows one to plan sufficient and accurate account books.
Documentation: For each transaction, there must be a document describing the business transaction, such as sales invoice, supplier invoice, supplier payment, bank payments, and journals. These documents provide the audit evidence for each transaction and in the event of an audit, are an essential part of maintaining accurate records.
Setup Your Charts of Accounts
A chart of accounts is simply a list of accounts that will be used in business such as revenue, cash, accounts receivable, accounts payable, payroll, supplies, rent, utilities, etc.
Choosing the right accounting software depends on the requirement of the business. These are some of the features:
- Create and customize invoices
- Track expenses according to categories
- Manage inventory POS mode billing
- Barcoding Income & expense management
- E-way bill Bank integration & reconciliation
- GST Reports
- Bank Reconciliation
- Multi-user login
- Manage a list of customers & vendors
- View account payables & receivables
- View Balance Sheet, Profit & Loss statement and Trial Balance reports
Paying a support system like 3E Accounting to correctly set up an accounting system upfront is an affordable investment compared to what it will cost you to fix your future accounting dilemmas. Invest and contact us today!