Every business irrespective of its size is bound by various statutory laws of the nation in which they are established. In India, every company has to mandatorily file application for GST return filing, Online ITR filing, Annual filing, professional bookkeeping services, online accounting services etc. These are some of the important compliances which every business enterprise needs to take care of.
Accounting & bookkeeping is just a systematic way of recording all the financial transaction occurring on a daily basis & to keep these records handy as and when they are needed. Since Accounting & bookkeeping services is not just beneficial in the hands of individuals but it is compulsory compliance requirement as well to keep the books for certain number of years. There are different laws under which bookkeeping has a statutory backing to it rules and regulations:
- Companies act, 2013
- Income tax act, 1961
SIGNIFICANCE OF ACCOUNTING & BOOKKEEPING SERVICES FOR BUSINESSES
1.) Fulfilling compliance requirement.
Companies act, 2013 & Income tax act, 1961 both require updated books of accounts for 8 years & 6 years respectively. If not maintained then disciplinary action could be taken against you & your organization. So for smooth functioning of your business it’s advisable to get in touch with an accounting & bookkeeping service professional in your area.
2.) Effective decision making.
Analysing books of the accounts improves decision making power of the top management. Accounting & bookkeeping services will help your business to grow. If you does not possess the books of account of your business then it might hamper your decision making power & the growth of business. Professional accounting & bookkeeping service will help in improving the quality of accounts book and makes the analysis more qualitative.
3.) Cash management.
Record all the financial transactions, revenues, expenses and liabilities, allow you to keep a check on your payments and income. Since accounting & bookkeeping services helps in maintaining the data of your receipts & payments, you can devise a better cash management policy which will help you to minimize the cash turnaround time in your organization.
4.) Financial management.
Accounting & bookkeeping services are significant, as it enables you to effectively analyze the financial position of your company. Professional accounting & bookkeeping service provider will help you to gather quantifiable info about your cash outflow and ways to minimize it. You would benefit from paying your bills on time and also receiving on time for your goods or services. A proper cash management keeps your business going.
5.) Ease of reporting.
A company’s financial statement is the most crucial report in which every investor is interested to decide its final investment value. The balance sheet, Revenue statement and cash flow statement, all signifies the importance of your company.
Financial statements are the result of effective accounting & bookkeeping. Investors should be able to make smart & well-educated choices which are most essential to make your enterprise more transparent and increase your goodwill in the eyes of investor & attract more clients. Accounting & bookkeeping is not only for Startups or new company registration, but it is more universal in nature & every business must look after to strengthen their books of accounts.
6.) Tax Planning.
Accounting & Bookkeeping services helps in online ITR filing for you as an individual. A good part of the income comes from your business as a company owner. You will have financial records with a bookkeeping mechanism in place. Instead of looking for receipts or invoices, you arrange all your financial details on one central board.
Chartered Accountant by profession, CA Sanket Agarwal has an experience of above11 years in Cross Border compliance , Import Export , International Taxation & is a passionate content creator.