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Accounting & Bookkeeping


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A startup is an organization that is under control of one or more entrepreneurs and aims at bringing a new product or service to the market. In most cases, founders fund initially for setting up a startup. They invest a substantial amount of time and money in research. Mostly, young entrepreneurs are involved in the process. So, since the startups don’t have a strong background at the initial stage of operations, bookkeeping becomes important for them.

Bookkeeping is the process of recording financial transactions of a business on a daily basis that include sales, purchase, receipts, payments. It is a part of accounting that records financial affairs of the business in the form of journal entries. It is basically a means of entering data into the accounting system. Therefore, accurate and complete bookkeeping becomes a major source of information for any kind of organization including startups. However, many times it is seen that startups do not consider Accounting & Bookkeeping services an important task in the initial stage of operations and in order to avoid extra cost, they ignore the concept of bookkeeping.


Some of the Important Reasons why Book-keeping is Important:

  Organized Accounts:

An organized record of financial transactions undertaken by startups plays an important role in tracking their income and expenses and it can be achieved only by bookkeeping.

  Timely preparation of Financial Results:

  Better overview of the business:

Bookkeeping provides an overview of the business from time to time and therefore, helps startups to analyze their current situation.

  Future budget Planning and Action:

Bookkeeping is about the preparation of organized accounts, which in-turn helps the startups to plan their future budget. When proper accounts are maintained for each and every period, financial transactions become transparent. All the money earned or spent becomes clear. startups prepare an action plan for spending their money accordingly.

  Analysis and Better Decision Making:

  Better Tracking of Growth:

  Better Financial Management:

  Organization’s Goals Planning:

To meet the short- term and long- term goals, startups need to focus on their strategies and track their results. This is only possible if bookkeeping is done.

  Tax Planning:

  A proper Audit of Accounts:

During the audit of books of accounts, bookkeeping becomes important because it provides clear and periodical data to the auditor. Also, the questions raised by the auditor can be properly answered if the auditee maintains proper books of accounts. This saves the auditee from any unfavourable remark in the audit report.

  Legal Requirement:

When the law requires maintenance of the books of accounts for a business, it becomes necessary for the startups to opt bookkeeping services.

  No Headache for the Business Owners:

  Better Assurance to Banks:

Benefits of Accounting & Bookkeeping

Saves Time

Improves Data Security

Maintain Tax Regulations

Minimizes Risk

Usage of Best Technology

Reduces Overhead Cost


Fix Compliance Issues

Make Better Decision Faster

Utilize Quality Time

Improved Work Quality

High level of Accuracy

Growing Your Business

Accounting & Bookkeeping
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  Bank Reconciliation

  Managing Accounts Payable & Accounts Receivable

  Inventory Management

  Payroll Preparation

  Producing Monthly Financial Statements

  Producing Financial Statements at Department/ Branch/ Geography/ Resource Level

Taxation
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  Calculating Payroll Taxes & Payments

  GST Calculation and Payments

  GST Returns Filing

  PF & ESI Payments

  Preparing & Planning of Taxes for Individuals, LLP, Partnerships, Pvt Ltd & Public Ltd Co.

  Filing of Income tax Return

Advisory
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  Budgeting and Forecasting

  Preparing Financial Ratios

  Developing industry specific KPI/MIS reports

  Producing Annual reports

  Financial Modelling

Conclusion:

Timely bookkeeping is key for keeping a track of the financial performance of the organization. It enables the management to make informed decisions knowing how the organization is performing and what corrective actions are required. So, startups should not overlook the importance of bookkeeping as it is a measure of business performance in terms of money and not a burden.

FAQ

  What is bookkeeping?

Bookkeeping is a formal method of recording all the financial transactions of a business during the complete financial year. Bookkeeping includes all the transaction such as Sales, Purchase, Payments & receipts, expenses during the financial year. Bookkeeping is generally done by a professional bookkeeping services provider.

 Why Professional Utilities for online accounting services and bookkeeping outsourcing?

Professional Utilities is one of the professional bookkeeping services provider in India with one of the finest & experienced professionals on board. Choosing Professional Utilities will give you an edge over others in the market because we ensure:

  • Secrecy of data
  • Expert handling
  • Online services
  • Access to your data
  • Data integration
  • Customized bookkeeping
  • User-friendly interface
We ensure the complete secrecy of data of our clients, since we understand the sensitivity of data. “Bookkeeping is not about business, it’s about trust”

  What are the types of Bookkeeping?

There are 4 types of bookkeeping systems in place viz.
  • Single entry system: Traditional form of bookkeeping for a small business which has a minimum no. of transaction. Under this system, a cash sale/business expense is recorded when they are actually incurred or paid. Under the single-entry bookkeeping system, the transactions don’t match with the corresponding accounts.
  • Double-entry system: It involves those businesses which have a large and complex transaction on a daily basis. This system posts a single credit transaction in one account and its debit effect is also reflected in a corresponding account which creates a balancing effect. Hence it overcomes the drawbacks of single entry system.
  • Bookkeeping software: As its name suggests, it is completely based on Information & technology. There are various bookkeeping software service providers in the market which will help to prepare all the ledger/accounts. You just need to put in the information and the software will prepare the necessary documents you need.
  • Virtual bookkeeping: This is the most lucrative and the most opted out method in the recent times which makes it easy & convenient to manage your bookkeeping of accounts. You don’t have to worry as to how many years of data you need to have to comply with the rules and regulations of the companies act; this will provide you with ample space to store the company’s books of accounts.

 Is it safe to outsource accounting and online bookkeeping?

Yes, it is completely safe to find an online bookkeeping service provider and get your books of accounts safely handled by them.

 Is it safe to outsource accounting and online bookkeeping?

Yes, it is completely safe to find an online bookkeeping service provider and get your books of accounts safely handled by them.

  How does online Bookkeeping services function?

The process of online bookkeeping services are very easy, that you just need to find a suitable bookkeeping method to prepare and preserve your books of accounts.

functioning of bookkeeping includes the following:
  • Compiling data
  • Preparing invoices/receipts
  • Verifying receipts
  • Matching the cash/bank statement
  • Income statement
  • Balance sheet
  • Any other financial statement

 Why not have my own accounts department rather than outsourcing?

There are various reasons which justifies that online bookkeeping services outsourcing is a better option than having your own accounts department:

  • Professional service
  • Reduced costs
  • Effective utilization of resources
  • High quality & expertise
  • Easy & convenient
  • Reduce risk of fraud
  • Assign roles & responsibility.

 Under what statue bookkeeping becomes compulsory?

There are different laws under which bookkeeping has a statutory backing to its rules and regulations:

Companies act, 2013

Section 128 of the companies act, 2013 specifically mentions the books of accounts for a period of 8 years immediately preceding the current year.
Section 25 companies which are solely formed as “Non-profit companies” are required to keep books of accounts for a period of not less than 4 years.
Some other books which need to be maintained as per companies act, 2013 are; register of directors/members, register of employees stock options and other securities bought back.

Income tax act, 1961

If the sale/turnover from the business or profession exceeds INR 25, 00,000 or the income from business/profession exceeds INR 2, 50,000 in any of the 3 preceding financial years, then it becomes mandatory on the part of the assessee to maintain books of accounts.
Section 6F specifies the list of various books which needs to be maintained as per the Income tax act, 1961 viz. Cashbook, general ledger, copy of bills & receipts.
The books should be maintained for a period of 6 years from the relevant preceding year.

 Is outsourcing of online bookkeeping and accounting possible?

Yes, online outsourcing of bookkeeping is possible and it is easy, effective and convenient for all the parties associated to outsource their bookkeeping.

 Is there any difference between accounting & online Bookkeeping?

Yes, Bookkeeping and accounting are two different sides of a coin but one is incomplete without the other. Bookkeeping is related to identifying, recording & maintaining financial transaction whereas accounting deals with the process of summarizing & interpreting the transactions in the ledger format as specified.