Hiring a good Accountant is one of the tedious tasks nowadays for your accounting services. Many Businessman faces many issues at the time of Audit or when filing ITR due to poor accounting Team. Many small businesses, startups, and entrepreneurs end up paying late fees, interest and penalties due to insufficient knowledge of an accountant. Nowadays, Accountants merely do data entry work and do not possess the right skills to prepare Financials, manage bank account operations, Financials analyzing skills, not comply with basic compliances, etc. Nowadays, finding a qualified and knowledgeable person as an Accountant is even more challenging.
To enable a smooth Accounting System & have error-free accounts, the following ten mistakes can be avoided while writing books of Accounts:
Use of Automation Technologies and Softwares'
Indians earlier used to follow the Chorda scale system. All the entries and bookkeeping were done manually in red registers, usually called Journals. In this system, there were a lot of chances of human errors as everything was done manually. It was also time-consuming as once, even if a small mistake is made, identifying the errors is very difficult as you need to check right from step one.
Since 2008 we have seen a considerable transformation in the Accounts field, i.e. dumping the traditional practice of maintaining Chorda to switching to Maintaining Accounts in Computer. The most commonly used Software then was Tally, and even today, Tally is one of the most used Software in India. But, gradually, more Software was introduced with more features and more Automations.
Automated Accounting Software’s nowadays are pocket-friendly and saves a lot of time; not only this, but it also overcomes the shortcomings of traditional accounting practices, i.e. avoidance of Mistakes or, you can say human errors. It reduces the risk of mistakes. One of the other primary reasons is the creation of a real-time report. This Real-time report assists in the early identification of problems so that they same can be resolved until it’s too late.
Automation also reduces the probability of internal frauds and teeming & lading issues which were very common earlier. The most commonly used accounting service providers are highly qualified in the automation tools, such as QuickBooks, Sage, Visma, Xero, Microsoft Dynamics, SAP and more.
Other than using Software for maintenance of books of accounts, the use of Microsoft Office is even more common nowadays. Using PPT and excels for making MIS Reports and other important database helps save a lot of time and effort.
Though the automation of accounting software involves a one-time investment, this one-time investment is worth it and benefits in the very long term. {Pro Tip: What is the Difference Between Accounting and Bookkeeping?}
1. Hiring Issues: Expert Accountants & Bookkeepers
Many Startups or Businesses significantly save costs by hiring freshers or less experienced accountants. Such fresher’s and Accountants often seek help from their friends and family to learn the process. They lack training and even are not aware of the process of bookkeeping. Sometimes they are even new to the Software or lack basic computer skills.
Appointing one good personnel as your Accountant is one of the most important things. Entrepreneurs or Businessmen should understand that to save a small amount, they can pay hugely for their ignorance and mistakes.
We understand due to budget constraints; people often tend to opt for cost-saving methods. But, instead of a fresher or a less experienced person, they might outsource accounting services to Accounts Outsourcing Firms. Accounts Outsourcing offers the Businessman or startup the possibility to hire a professional with a higher level of expertise at an affordable price as these guys come as a Team of Experts and not as a single individual. Each task has a person who is a master in the same.
Firms engaged in Outsourced bookkeeping and accounts writing services continuously have to improve their skills and qualifications to stay competitive in the market as there is a lot of competition in this field. Suppose 100 people work in the same office doing the same activity but for different clients or cases. Each can share the new accounting trends, findings, shortcuts, solutions and tools. In addition, Outsourced bookkeeping and accounts writing Firms have more extensive access to training and courses, and all the employees participate continuously.
By choosing the right Firms engaged in the business of Outsourced bookkeeping and accounts writing services, you can ensure that you’re accounting is in the reliable and knowledgeable company’s hands.
2. Periodic Review of Accounts:
More than one-third of small businesses or entrepreneurs are outsourcing their accounting today. And interestingly, most small companies or startups that outsource are not feeling comfortable doing the accounting on their own as they don’t want the headache of managing finance and want to concentrate on core business activity.
But, for those with their own in-house accounts Team, another essential factor to look after is a periodic review of accounts through an independent third party. There is a provision for compulsory Internal Audits for listed or some types of private limited companies. Irrespective of anything, they need to appoint Internal Auditor to get periodic audits of their accounts. The same approach should be followed by other businesses as well.
Sometimes though, as people work dedicatedly, there is still scope for errors to happen mistakenly. As per the famous saying, “Too err is too human”, people, even after paying attention, tend to make small mistakes unknowingly. To have an independent review of accounts from an independent third party is an important activity.
Businesses or entrepreneurs can appoint an external agency to get their accounts reviewed. A Monthly or Quarterly review is always recommended as half yearly review will not fulfil the purpose of obtaining an accounts review. A good accounts reviewer will always provide sound advice on how to make accounting more efficient and also advice on how to avoid repetitive mistakes. Sometimes, they might work with a couple of companies or businesses and propose an excellent experience or solution from another client. It can be about taxation, accounting software, or even providing financial advice or tax-saving methods.
3. Scaling Accounting Easily:
The Accounts Keeping or Bookkeeping should be done without any lag. The Accountants should have the amount of availability to scale your services significantly without any lag or delay. For example, if your bookkeeping and accounting tasks exceed the number of functions for one employee, you can easily be enforced with the extra workforce. Moreover, accounting and bookkeeping are charged on an hourly basis. Ensure you are working with the right people; most importantly, the numbers are enough.
A good accountant or a Team of accountants will always advise making accounting or accounting systems more efficient.
4. Learning from Old Mistakes:
Considering the above mentioned points, the only issue left is learning from past mistakes. We have often seen that despite recognizing problem points, we observe the same things repeatedly repeated, like duplicate payments to vendors due to lag in accounting.
There is no point in spending if the problem points are not triggered and resolved. Hence, taking action on solutions to provide instead, we should say strict actions against the problems and firmly implementing the answers is the only way to move forward and not get stuck in small things.
Even though it is highly believed that accounting services or bookkeeping services must be done inside the business, i.e. appoint an In-house Team for the same. But it is essential to ask yourself whether you have the necessary skills and experience to do this job. Also, is your staff has enough experience to coup with increasing accounting tasks and corresponding business needs. To add up, 75% of all small businesses, startups or entrepreneurs in India think they overpay their taxes.
Due to this fact, you might consider outsourcing accounting services or Bookkeeping Services to a qualified service provider with the proper knowledge and qualification, which service provider can do the same job more qualitatively and cost-effectively.
For the same reason, many executive directors or big startups have noticed various positive aspects of outsourcing bookkeeping and accounting services, especially in Mumbai and other metro cities. Most importantly, outsourcing such services should be without any adverse effects on their business, employees, and customers.
Conclusion:
Many advantages exist for businesses that outsource their accounting tasks to an external agency. To begin with, cost-efficiency, and ending with flexibility in terms of contracts or scaling the number of functions. Accounting and bookkeeping services are a vital part of the business but also complex. Without accounting experience, there might be many errors which can lead to a decrease in your business or even go bankrupt.
Taxzona Consultancy Services LLP is a reliable accounting service provider to small and medium-sized businesses with over 500 clients from all over India. You can check our accounting and bookkeeping services or leave us a quote.
