Accounting is required if you want to fully understand your company's finances, from investments to debt. However, it is common for Small and Medium Busnesses to avoid implementing this type of administrative process, owing to their distance from the sales action. If you are one of the business owners who believes this, you should reconsider, because good accounting can save your company from disaster. It could save you from not paying your taxes on time or from making an investment that does not fit your budget.
How can bookkeeping accomplish this? How to implement this process in your company? We will answer those questions below.
Why digital bookkeeping is important?
Accountants and administrative personnel used to keep their business records manually a few decades ago. That's right, that's where the well-known term "accounting books" comes from, because they were books filled by hand or typewriter. It is no longer necessary to expend so much effort; however, maintaining financial records for a company is still a job that should not be taken lightly. Today, however, there are technological tools that can help with this work, as well as programs that the newest members of your company can use. The presence of these programs for digital bookkeeping is critical in Small and Medium Businesses because it is the simplest way to keep their numbers up to date. And knowing this information in an almost automated manner will provide you with a plethora of benefits, so keep reading.
Accounting and GST Tax
Goods and Services Tax (OR GST Tax) is an indirect tax from India that has replaced another class of taxes. This came into force in 2017 and regulates everything related to the supply of goods and services; therefore, it applies to all points of sale, from the purchase of raw materials to the sale to final consumers. Yes, your Small and Medium Business in India must comply with this tax, so you should consider including this value in your services or products. However, it is a significant benefit because it eliminates a large amount of accumulated taxes and combines them into a single added value. This is something you should account for in your financial records. Why is this so? Because an incorrect calculation of your product and its sale price could result in significant losses. Furthermore, a violation of these types of rules can result in serious problems for your company, so make sure you understand the values and percentages of GST Tax that apply to your sales. Naavo helps you with such calculations
Being Organized as an SMB
This type of administrative and financial process will help you have a more organized company, which is something that many people are interested in. We've already mentioned that the agencies in charge of tax collection will be aware of this, but they won't be the only ones who are wanting this data. Your customers, employees, and especially investors will want to know that your company's numbers are in order. For example, failing to provide your records to investors could disrupt your cash flow and make you and your company untrustworthy. Accounting, on the other hand, will assist you in maintaining a good business analysis and determining if the company's performance and productivity have been optimal. As a result, you can devise new strategies or stick with old ones to keep your company afloat.
Bookkeeping for plans and decisions
As previously stated, maintaining your company's financial records will assist you in maintaining a good performance analysis; with it comes better decision making due to all of the information available. This, of course, implies that you will be able to make far more successful plans. You can have a clear idea of what is working and what is not in your company thanks to the numbers; this will undoubtedly play an important role in business planning in terms of income, expenses, and investments. So, never underestimate the importance of accounting in small and medium-sized businesses, because it can save your company at any time.
We at Naavo help you accomplish your bookkeeping and accounting goals.