accounting & taxation essentials for entrepreneurs
TRANSCRIPT
Accounting & Taxation Essentials for Entrepreneurs
Saturday 10, December, 2016. 2.30pm – 5.30pm
Navi Mumbai
•Are you confused as to how to approach accounts being a startup.•Are you not sure of the applicable compliance for your startup. •Are your accounts in a messy shape or you haven’t started at all?Accounting has always taken a last seat in the priorities because: -
• Thought process …Lets first earn something to account for• It’s a Cost Center
Believe us accounting is like a dashboard of a running car… although not compulsory but truly essential….
Also as a CEO / CXO, one have NO choice but to put his head around the numbers to do sane business…….
It is really SIMPLE and you actually can DIY (Do It Yourself) as far as the basics are concerned.
Significance of Accounting
5 Basic Accounting Disciplines for Start-Ups: Maintain list of Invoices…. Revenue is the key!!
Maintain Cashbook…. Cash is king!!
Maintain a bankbook & do a daily reconciliation… Control adds
up to credibility!!
Maintain an expense file… Get your budgets right!!
Maintain an Asset Register…. Know what all you have!!
As CEO / CXO, one has no choice but to put his head around NUMBERS consistently…..
What you see daily is what grows…. Sales, Profits, Valuations, Cash
Busin
ess
Taxation
5 Basic Accounting Disciplines for Start-Ups:
• Maintaining list of Invoices:– Should be maintained without fail.– Invoice is hard cash blocked in services or goods.– Should be maintained in a proper format – Proper format enables faster collection of cash– Other points like the following are critical from a
service tax, VAT & excise calculation• Trail on revised rates• Cancellation of invoices• Modification in qty etc
5 Basic Accounting Disciplines for Start-Ups:
• Maintain a Cash Book …as Cash is King– Is a register which helps you track your petty cash
on a daily basis– It should have a receipt & an expense column,
which nets off to a balance. – Best practice is to balance this end of day daily
and match the balance with physical balances – Multiple cash books can be maintained if
required for multiple locations / persons.
5 Basic Accounting Disciplines for Start-Ups:
• Maintain a Bank Book & do a daily Reconciliation– Gives clarity on Bank position i.e. the time between
the deposit of a cheque to amount getting reflected.– Excel sheet with the following details to be maintained• date of issue / deposit of Cheque, • date of clearing with all routine details like name, bill etc..
– More helpful for planning. Could be of some help to take strategic financial decisions as well.
5 Basic Accounting Disciplines for Start-Ups:
• Maintain an Expense file:– List of all expense items to be maintained with
• Date of the bill / receipt• Name of Party & Purpose• Amount & Taxes separately punched
– Best Practice is to • Noting the cheque nos and date of invoice• Amount of Cheque • Do claim credit of excise duty, service tax & VAT.
Please AVOID KACCHHA invoices
5 Basic Accounting Disciplines for Start-Ups:
• Maintain a Fixed Asset Register– Records of Fixed assets is a must have – Foll. Details should be maintained• Date of Purchase & Vendor name• Model No. & Warranty period • Maintenance schedule & insurance etc..
A Good Tracking system can differentiate your Business vis-à-vis others when it comes to funding .
Know your compliance… (KYC)
• Service Tax: -
• VAT: -
• Profession Tax: -
• TDS : -
Taxation in a Nutshell
Reverse Charge Mechanism
Particulars Service Tax VAT CST
Applicable Geographies All India LevelLocal (Inside Maharashtra)
Interstate (Outside Maharashtra
Applicability On Delivery of ServicesIllustrationNet Sales (Rs) 1000 1000 1000Tax (%) 15% 12.50% 2.00%Tax (Rs) 150 125 20Gross Sales (Rs) 1150 1125 1020
Purchases (Rs) 800 800 800Tax (%) 15% 12.50% 2.00%Tax (Rs) 120 100 16Gross Payables 920 900 816Set-Off Available Yes Yes No
Tax Payable to Authorities 30 25 20
Effective Cost of Purchases 800 800 816
On Transfer of Property in Goods
TDS
Applicable to: Salaries, Professional services, Contracts, Advertising, Renting
•Credit Available at the end of the year against Income Tax Payable
Payments to Non-residents:•Ascertained on a case to case basis•Certificate form no 15CA & CB to be issued
Particulars Tax - % Amount (Rs.)Inovice Raised 1000Service Tax 14% 140Gross Value of Invoice 1140TDS Payable to Government 10% 114Net Payable to Vendor 1026
Get in Touch With Us@apmhtaxalerts– for 140 character crisp reply
For further details contact:Mitesh KatiraCell: +91-9833777556E mail: [email protected]
www.apmh.in/knowledge
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Date Invoice No Client Name Channel Partner Services Provided Net Amount Tax Gross Amount25-May-14 2014-15/001 Apple Axis Services Routine Maintainance 100 10 110