R K Associates provides computer-based accounting services. Many accounting tasks have been simplified with the help of computer-based software. An Enterprise resource planning (ERP) system is commonly used for a large organization and it provides a comprehensive, centralized, integrated source of information that companies can use to manage all major business processes, from purchasing to manufacturing to human resources.
- What is accounting?
- How Accounting Works?
- What are the types of accounting?
- Advantages of accounting.
- Requirements for Accounting.
- What accounting services do small businesses need?
- Do I need a bookkeeper or an accountant?
Accounting information systems have reduced the cost of accumulating, storing, and reporting managerial accounting information and have made it possible to produce a more detailed account of all data that is entered into any given system.
We as a service provider, relieve you from the day to day maintenance of books of Accounts. We offer to keep & maintain books on your behalf at cost-effective fees.
Various laws of India have prescribed the requirement of maintenance of books of accounts. Section 128 of the Companies Act 2013 prescribes as follows:
“Every company shall prepare and keep at its registered office books of account and other relevant books and papers and financial statement for every financial year which give a true and fair view of the state of the affairs of the company, including that of its branch office or offices, if any, and explain the transactions effected both at the registered office and its branches and such books shall be kept on accrual basis and according to the double-entry system of accounting.”
Various regulatory authority like IRDA, TRAI, SEBI, RBI have also prescribed their requirements.
There is a famous proverb in Hindi which translates as “first write then pay”. Every transaction which takes place needs to be recorded so that any future dispute may be avoided. Initially, businessmen used to record their transactions at a single entry system or at their own discretion. By the time, recording methods have changed. The most preferred accounting system nowadays is a double-entry system. The double-entry system has legal backing as governments and regulatory authorities prefer it.
Apart from above, Section 44AA of Income Tax Act 1961 has prescribed the requirements of maintenance of books of accounts which covers a wider range of business entities under it.
(1) Every person carrying on the Legal, Medical, Engineering, Accountancy or Interior Decoration or any other profession as notified by CENTRAL BOARD OF DIRECT TAXES (CBDT) are required to maintain such books of accounts & other documents as may enable the Assessing Officer to compute Assesses total income in accordance with provisions of this act.
(2) Following are the persons who are required to maintain books of accounts: -
(i) A person carrying on business or profession if his total income exceeds Rs.1,20,000 or his total Turnover or Gross Receipts in the business or profession exceeds Rs.10,00,000 in any of the 3 years immediately preceding the previous year.
(ii) Where the business is newly set up if his total income is likely to exceed Rs.1,20,000 or his total Turnover, Gross Receipts likely to exceed Rs.10,00,000.
(iii) where the profits and gains from the business are deemed to be the profits and gains of the assessee u/s 44AE or 44BB or 44BBB and assessee has claimed his income to be lower than the profits and gains so deemed to be the profits and gains of his business.
(iv) where the provisions of sub-section (4) of section 44AD are applicable in his case and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year.
Rule 6F: Books of Account to be maintained:
Every person carrying on Legal, Medical, Engineering or Architectural Profession or Profession of Accountancy or Interior Decoration or Film Artist or Authorized Representative if his Gross Receipts exceeds Rs.1,50,000 in all the three years immediately preceding the previous year or
Where the profession has been newly set up in the previous year his gross receipts are likely to exceed Rs.1,50,000 in that year.
BOOKS TO BE MAINTAINED
The following books of accounts and documents are required to be maintained : -
ü Cashbook
ü Journal
ü Ledger
ü Carbon copies of the bills & receipts issued by the person in relation to sums exceeding Rs.25
Original bills and receipts issued to the person in respect of the expenditure incurred.
PERIOD FOR WHICH THE BOOKS & OTHER DOCUMENTS TO BE MAINTAINED
The above books of accounts and other documents shall be kept and maintained for a minimum period of 6 years from the end of the relevant assessment year. If an assessment in relation to any assessment year has been reopened u/s 147 all the books of accounts and other documents shall continue to be kept and maintained till the assessment so reopened has been completed.
PLACE WHERE BOOKS TO BE MAINTAINED
The books and documents shall be kept and maintained at the place where the person is carrying on the profession or where there is more than one place at the principal place of business.
What is the accounting services?
Accounting is the process of recording financial transactions pertaining to a business. The accounting process includes summarizing, analyzing, and reporting these transactions to oversight agencies, regulators, and tax collection entities. The financial statements used in accounting are a concise summary of financial transactions over an accounting period, summarizing a company's operations, financial position, and cash flows.
Accounting is one of the key functions for almost any business. It may be handled by a bookkeeper or an accountant at a small firm, or by sizable finance departments with dozens of employees at larger companies. The reports generated by various streams of accounting, such as cost accounting and managerial accounting, are invaluable in helping management make informed business decisions.
The financial statements that summarize a large company's operations, financial position and cash flows over a particular period are concise and consolidated reports based on thousands of individual financial transactions. As a result, all accounting designations are the culmination of years of study and rigorous examinations combined with a minimum number of years of practical accounting experience.
While basic accounting functions can be handled by a bookkeeper, advanced accounting is typically handled by qualified accountants who possess designations such as Certified Public Accountant (CPA) or Certified Management Accountant (CMA) in the United States. In Canada, the designations are Chartered Accountant (CA), Certified General Accountant (CGA), and Certified Management Accountant (CMA);however, all three will be unified under the designation Chartered professional accountant (CPA) in the near future.
What are the types of accounting services?
Financial Accounting
Financial accounting refers to the processes used to generate interim and annual financial statements. The results of all financial transactions that occur during an accounting period are summarized into the balance sheet, income statement, and cash flow statement. The financial statements of most companies are audited annually by an external CPA firm. For some, such as publicly-traded companies, audits are a legal requirement. However, lenders also typically require the results of an external audit annually as part of their debt covenants. Therefore, most companies will have annual audits for one reason or another.
Managerial Accounting
Managerial accounting uses much of the same data as financial accounting, but it organizes and utilizes information in different ways. Namely, in managerial accounting, an accountant generates monthly or quarterly reports that a business's management team can use to make decisions about how the business operates. Managerial accounting also encompasses many other facets of accounting, including budgeting, forecasting, and various financial analysis tools. Essentially, any information that may be useful to management falls underneath this umbrella.
Cost Accounting
Just as managerial accounting helps businesses make decisions about management, cost accounting helps businesses make decisions about costing. Essentially, cost accounting considers all of the costs related to producing a product. Analysts, managers, business owners and accountants use this information to determine what their products should cost. In cost accounting, money is cast as an economic factor in production, whereas in financial accounting, money is considered to be a measure of a company's economic performance.
ØComplete and Systematic Record
ØDetermination of Selling Price
ØValuation of the Business
ØHelps in Raising Loan
ØEvidence in Court of Law
ØIn Compliance of Law
ØInter-Firm or Intra-Firm Comparison
ØFacilitates Audit
ØEffective Management
In most cases, accountants use generally accepted accounting principles (GAAP) when preparing financial statements in the United States. GAAP is a set of standards and principles designed to improve the comparability and consistency of financial reporting across industries. Its standards are based on double-entry accounting, a method in which every accounting transaction is entered as both a debit and credit in two separate general ledger accounts that will roll up into the balance sheet and income statement.
What accounting services do small businesses need?
üDay-to-day book-keeping.
üSubmit monthly/quarterly GST returns.
üReceivable / payable record.
üTax liability
üAnnual book preparation like Audit, Balance Sheet, Profit &Loss, MIS etc….
üIncome Tax Return
Do I need a bookkeeper or an accountant?
Every entity who wants to know his business transaction as a receipt, payment, and reports like receivable, payable, income, expenses, stock, etc… need to maintain the book.
Who summarizes his budget and business grow target period.