TDS Rates Based on Vendor’s PAN and ITR Filing:

When engaging with vendors who lack a PAN (Permanent Account Number) or have defaulted on filing their Income Tax Returns (ITR), businesses must be aware that the TDS deduction rate is higher.

Failure to deduct the correct TDS can lead to non-compliance and result in working capital loss.

1. Mandatory PAN Furnishing: Vendors (deductees) must provide their PAN to businesses (deductors) to enable TDS deduction at the source. If the vendor doesn’t furnish their PAN, the tax will be deducted at a higher rate, which could be either the rate specified in the relevant provision, the current applicable rate, or 20%.

• Special TDS Rate for E-commerce and Buyer Transactions: In cases where tax needs to be deducted by an e-commerce operator or buyer under specific sections, and the vendor hasn’t provided their PAN, the TDS rate is set at 5% instead of 20%.
• Exemptions for Non-resident Vendors: Certain non-resident vendors are exempt from Section 206AA provisions in specific transactions, such as interest on particular bonds, specified income (like interest, royalty, fees for technical services, dividend, and capital asset transfers). Non-resident vendors, in these cases, are still required to provide specific details and documents to the deductor.

2. TDS Deduction for Non-filers of Income Tax Returns: In cases where vendors have not filed their income tax returns, Section 206AB comes into play. When TDS is required under this provision, it will be deducted at the higher of these rates:

• Twice the rate specified in the relevant provision.
• Twice the rate or rates currently in effect.
• A flat rate of 5%.

Here are the key aspects to consider:

TDS Deduction for Vendor Driven Businesses 

In summary, businesses should be aware of these TDS regulations to ensure compliance with tax requirements when dealing with vendors. For more information on TDS, check out this FAQs resource by the government of India. Got any TDS deduction queries with add-on vendor complexities? Send them to sales@finsmartaccounting.com and have them answered by our accounting and taxation experts! 

Also read: 

Here’s how CPA firms in US benefit from outsourcing bookkeeping operations to India

Offshore monitoring approaches for small CPA practices

Outsourced accounting services in India

Offshore bookkeeping services for CPAs

Learn about accounts receivable outsourcing services

Outsourcing payroll service? Think Finsmart

Learn about payroll outsourcing services

The post TDS Deduction for Businesses Dealing with Vendors appeared first on Finsmart Accounting.

Accounting is an essential part of running a successful small business in India. Proper accounting practices not only help small business owners keep track of their finances but also provide valuable insights into the business’ overall financial health. 

In this article, Finsmart Accounting – the leading outsourced accounting firm in India – will discuss some accounting best practices and tips that small businesses in India can adopt to improve their financial management and make informed business decisions.

#1 Maintain Accurate Financial Records

The first step to effective accounting is to maintain accurate financial records. This includes keeping track of all financial transactions, such as sales, purchases, expenses, and payments. Small businesses can use accounting software, such as Tally or ZohoBooks, to maintain their financial records.

It is essential to ensure that all financial transactions are recorded accurately and timely to avoid errors and discrepancies. Accurate financial records can also help small business owners identify areas of their business that are profitable and areas that need improvement. This is literally one of the best accounting practices that a lot of small businesses invest in.

#2 Separate Personal and Business Finances

Small business owners in India often mix their personal and business finances, which can lead to confusion and errors in accounting. It is crucial to separate personal and business finances and maintain separate bank accounts and credit cards for each. This seems like a basic accounting best practice but stay with us and read on!

This separation makes it easier to track business expenses and income, ensuring that business owners can accurately calculate their profits and losses. It also helps avoid potential legal and tax issues that may arise from mixing personal and business finances.

Discover the many benefits of payroll outsourcing in India

#3 Follow the Cash Basis of Accounting

The cash basis of accounting is a simple and easy-to-follow method of accounting that small businesses in India can adopt. This method records transactions when the cash is received or paid, rather than when the transaction occurs. This method is especially useful for small businesses with limited resources and no dedicated accounting staff.

However, if the business has inventory or accounts receivable and payable, they may need to use the accrual basis of accounting, which records transactions when they occur, regardless of when cash is received or paid. For small businesses in India, adopting this business accounting practice can be really helpful. 

#4 Monitor Cash Flow

Cash flow is the lifeblood of any small business, and monitoring cash flow is crucial for financial management. Small business owners must track their cash inflows and outflows to ensure that they have enough cash to meet their financial obligations, such as paying suppliers and employees.

Cash flow can be tracked using a cash flow statement, which records all cash inflows and outflows over a specific period, such as a month or a year. By monitoring their cash flow, small business owners can make informed decisions about managing their finances and avoid potential cash flow problems.

Check out what one of our clients have to say about us: 

Embed: Looking for reliable and efficient accounting outsourcing solutions? Look no further than Finsmart

#5 Plan for Taxes

Small businesses in India are subject to various taxes, such as the Goods and Services Tax (GST), Income Tax, and other state-specific taxes. It is essential to plan for taxes and ensure that all taxes are paid on time to avoid penalties and legal issues.

Small business owners can plan for taxes by setting aside a portion of their profits to pay taxes, keeping track of all expenses and deductions, and consulting with tax professionals to ensure compliance with tax laws and regulations.

#6 Reconcile Bank Accounts Regularly

Reconciling bank accounts is a crucial accounting best practice that small businesses in India can adopt. This involves comparing the transactions recorded in the business’s accounting software to the transactions recorded in the business’s bank statements.

Reconciling bank accounts regularly can help small business owners identify errors, such as incorrect entries or fraudulent transactions. It also ensures that the business’s financial records are accurate and up-to-date. Indeed one of the best accounting practices and hacks for small businesses in India

#7 Use Accounting Software

Accounting software can help small businesses in India streamline their financial management and make accounting tasks more manageable. Accounting software, such as Tally or ZohoBooks, can automate tasks such as invoicing, expense tracking, and financial reporting, making it easier for small business owners to manage their finances.

Accounting software can also provide valuable insights into the business’s financial health, such as financial ratios and trend analysis. Small business owners can use these insights to make informed decisions about expanding or scaling back operations.

Read the detail on which accounting software is better: Tally vs Zoho

#8 Follow Generally Accepted Accounting Principles (GAAP)

Small businesses in India must follow Generally Accepted Accounting Principles (GAAP) while maintaining their financial records. GAAP is a set of accounting standards that provide a framework for financial reporting.

Adopting GAAP ensures that small businesses in India maintain accurate financial records that are comparable to other businesses’ financial records. It also ensures that the financial statements are consistent and reliable, making it easier for investors and lenders to make informed decisions about investing in or lending to the business.

#9 Invest in Training and Development

Small business owners in India may not have a dedicated accounting team or staff to manage their finances. In such cases, it is essential to invest in training and development for employees responsible for financial management.

Investing in training and development can help small business owners improve their financial management skills and keep up-to-date with accounting best practices. It can also help ensure that the business’s financial records are accurate and up-to-date, reducing the risk of errors and discrepancies.

#10 Consult with Accounting Professionals

Consulting with experienced accounting professionals (like we have at Finsmart Accounting!) can provide valuable insights into the business’s financial health and ensure compliance with tax laws and regulations. They can help small business owners with tasks such as tax planning, financial analysis, and compliance.

Understand the difference between Local CA vs. Accounting firm

They can also provide valuable advice on accounting best practices and help small business owners make informed decisions about their business’s future. While hiring them may incur additional costs, however it can provide significant benefits in the long run.

Execute accounting best practices with Finsmart

Accounting is an essential part of running a successful small business in India. Adopting accounting best practices can help small business owners maintain accurate financial records, make informed decisions about future challenges, and ensure compliance with tax laws and regulations.

By adopting these accounting best practices and recommendations, small business owners can improve their financial management skills, avoid potential legal and tax issues, and make informed decisions about their business’s future.

Connect for Accounting Outsourcing Support

Finsmart Accounting with its 15 years of outsourced accounting is a one-stop solution for all accounting, taxation, and payroll needs for growing business enterprises. Our customer-centric service models, domain expertise, and use of the latest tools & technology have truly helped us to establish ourselves as ‘Trusted FinOps Partner’.

Still, got questions to ask? Send them at sales@finsmartaccounting.com and get a quick reply from top accounting experts. Or check out these valuable resources: 

A comprehensive guide on making your startup recession-proof

Learn about Financial Controller Services

The post Accounting Best Practices for Small Businesses in India appeared first on Finsmart Accounting.

In this article, Finsmart – the most trusted outsourced accounting company in India – will explore some tax planning strategies for Indian startups to help them manage their taxes efficiently and effectively.

Tax planning strategies and tips

Below are the tax planning strategies that create the maximum value for Indian startups:

#1 Choose the Right Business Structure

One of the first decisions a startup needs to make is choosing the right business structure. The most common business structures in India are sole proprietorship, partnership, limited liability partnership (LLP), and private limited company. Each structure has its own tax implications, and it is essential to choose the structure that aligns with the startup’s long-term goals.

For example, if the startup is planning to raise funds from investors in the future, it may be beneficial to incorporate as a private limited company, as this structure allows for equity funding. On the other hand, if the startup is a small-scale business with low revenues, a sole proprietorship or partnership may be a more suitable option, as these structures have lower compliance requirements. In short, the simplest tax planning strategy out there!

#2 Keep Accurate Records

Keeping accurate financial records is crucial for any business, but it is even more critical for startups, especially in the early stages. By maintaining accurate records, startups can track their income and expenses, monitor cash flow, and identify areas where they can cut costs and increase profitability.

Accurate financial records are also essential for tax planning, as they provide the basis for calculating taxes and filing tax returns. startups should invest in accounting software or hire a professional accountant to maintain detailed financial records.

Learn about payroll outsourcing services in India

#3 Take Advantage of Tax Exemptions and Deductions

The Indian government offers several tax exemptions and deductions for startups to encourage entrepreneurship and innovation. For example, Section 80 IAC of the Income Tax Act of 1961 enables a Startup recognized by the Department of Industry Policy & Promotion (DIPP) to demand tax exemption for 3 consecutive financial years. This means that they are exempt from paying income tax for the first three years, provided they meet certain conditions.

Read on to discover more tax planning strategies for Indian startups and business owners.

#4 Outsourcing Services

Outsourcing certain services can be a tax-efficient strategy for startups. For example, outsourcing accounting and bookkeeping services to a professional firm can help ensure compliance with tax laws and regulations, while also reducing the burden of hiring and training in-house staff.

Similarly, outsourcing software development and other non-core services to a third-party vendor can help reduce costs and improve efficiency. However, startups should ensure that they choose reliable and reputable vendors to avoid any legal or financial issues.

Check out what one of our clients have to say about us: 

#5 Claim Input Tax Credit (ITC)

Input Tax Credit (ITC) is a credit that businesses can claim for the taxes paid on goods and services used for business purposes. startups can claim ITC on the taxes paid by their suppliers for goods and services used for business purposes. This credit can be used to offset the GST liability of the business, thereby reducing the overall tax liability.

To claim ITC, startups must ensure that their suppliers are registered under the GST Act, and they must maintain proper documentation, such as tax invoices and purchase receipts. This is the right way to benefit from this tax planning strategy!

Understand the difference between Local CA vs. Accounting firm

#6 Compliance with GST and Other Tax Laws

Compliance with tax laws and regulations is essential for any business, especially for startups. In India, startups are subject to various tax laws, such as the Goods and Services Tax (GST), Income Tax Act, and other state-specific tax laws.

startups must ensure that they comply with these laws and regulations to avoid penalties and legal issues. This includes timely filing of tax returns, maintaining proper records, and paying taxes on time.

#7 Consult with Tax Professionals

Tax planning can be complex, and startups may not have the necessary expertise to navigate the tax laws and regulations. In such cases, it is advisable to consult with tax professionals who can provide guidance and support on tax planning strategies.

Tax professionals can help startups identify tax-saving opportunities, ensure compliance with tax laws and regulations, and provide valuable advice on tax planning and optimization.

Check out our Financial Controller Service

Conclusion

Tax planning is a crucial aspect of managing the financial health of any business, especially for startups. Indian startups face unique challenges when it comes to tax planning, given the complex and ever-changing tax laws and regulations.

By adopting these strategies, startups can manage their taxes efficiently and effectively, reduce their tax liability, and improve their financial health in the long run.

Connect for Accounting Outsourcing Support

Finsmart Accounting with its 15 years of outsourced accounting is a one-stop solution for all accounting, taxation, and payroll needs for growing business enterprises. Our customer-centric service models, domain expertise, and use of the latest tools & technology have truly helped us to establish ourselves as ‘Trusted FinOps Partner’.

Have queries to ask? Drop them in the comments or email us at sales@finsmartaccounting.com to get a quick reply from our team of accounting and tax experts.

Also, don’t forget to read our recently published blogs:

A comprehensive guide on making your startup recession-proof

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Top benefits of finance and accounting outsourcing for Indian startups

Tips to raise funds for a startup

The post Tax Planning Strategies and Tips for Indian Startups appeared first on Finsmart Accounting.

As the e-commerce industry in India continues to grow rapidly, it is essential for startups in this sector to have a solid understanding of accounting practices. Proper accounting can help e-commerce startups stay on top of their finances and make informed decisions about their business.

That’s why Finsmart Accounting – a trusted outsourced accounting firm in India – decided to share accounting tips and ideas for e-commerce startups that will help them improve their financial health. Let’s get started!

Accounting for ecommerce startups

Here are some tips and tricks for Indian accounting for e-commerce startups!

#1 Choose the Right Accounting Software

Selecting the right accounting software is crucial for e-commerce startups in India. There are many accounting software options available in the market, each with its own features and pricing. E-commerce startups should consider their specific accounting needs, such as invoicing, inventory tracking, and payment processing, and choose software that can meet these requirements. It is also important to ensure that the chosen accounting software for your startup complies with Indian accounting standards and regulations.

Read the detail on which accounting software will win in 2023: Tally or Zoho

#2 Separate Personal and Business Finances

One of the most common mistakes made by e-commerce startups is mixing personal and business finances. It is important to keep these finances separate to ensure accurate financial reporting and tax compliance. E-commerce startups should open separate business bank account and use it exclusively for business-related transactions. A rather simple yet super effective accounting tip for ecommerce startups!

#3 Maintain Accurate Records of Sales and Expenses

E-commerce startups should keep accurate records of all sales and expenses, including receipts and invoices. This can help them track their financial performance, identify areas for improvement, and ensure compliance with Indian accounting regulations. Keeping accurate records can also make tax preparation easier and prevent issues with audits or investigations. A lot of e-commerce startups don’t obsess over this accounting tip, leading to poor cash flow management processes. So, you must watch out! 

#4 Reconcile bank statements

Reconciling your bank statements is a critical aspect of maintaining accurate financial records. It involves comparing the transactions on your bank statement with the transactions in your accounting software to ensure that everything is accurate and accounted for. This accounting hack for ecommerce startups can help identify errors, fraud, or other issues that may impact the regular flow of business. It can also help you to catch bank fees, interest payments, or other items that may have been missed. By reconciling your bank statements regularly, you can have more confidence in the accuracy of your financial statements, which can help you make better financial decisions for your e-commerce start-up.

Understand the difference between Local CA vs. Accounting firm

#5 Plan for the future

As an e-commerce start-up, it’s essential to plan for the future to ensure your business’s long-term success. One way to plan for the future is by creating a budget and forecasting your finances. A budget is a financial plan that outlines your e-commerce business’s revenue and expenses over a specific period, usually a year. A budget can help you identify areas where you can cut costs, improve profitability, or increase revenue. It can also help you to plan for future investments or expansion opportunities. Forecasting your finances involves projecting your future revenue, expenses, and cash flow based on historical data and assumptions about future trends and events.

By forecasting your finances, you can identify potential financial risks or opportunities and take proactive measures to address them. For example, if your forecast shows that your e-commerce startup may experience a cash crunch in the coming months, you can take steps to reduce expenses or secure additional funding to avoid a cash flow crisis. Planning for the future is crucial in accounting for e-commerce startups as it can help you to make informed decisions that can impact your business’s long-term success.

#6 Keep Track of Inventory

For e-commerce startups that sell physical products, it is essential to keep track of inventory. Proper inventory management can help prevent stockouts, reduce the risk of overstocking, and minimize the risk of losses due to theft or damage. E-commerce startups should use inventory management software to keep track of inventory levels and ensure that they have the right amount of stock on hand at all times.

#7 Understand Tax Obligations

E-commerce startups in India are subject to various tax obligations, including GST (Goods and Services Tax), income tax, and TDS (Tax Deducted at Source). It is important to understand these obligations and comply with them to avoid penalties and legal issues. E-commerce startups should consult with a tax professional to ensure that they are meeting all tax requirements. Another ace accounting tip for ecommerce businesses!

#8 Monitor Cash Flow

Cash flow is essential for the success of any business, including e-commerce startups. E-commerce startups should monitor their cash flow regularly to ensure that they have enough funds to cover their expenses and invest in growth opportunities. They should also identify areas where they can reduce expenses or increase revenue to improve their cash flow.

#9 Hire a Professional Accountant

This list of accounting tips for e-commerce startups will be incomplete without this point. E-commerce startups should consider hiring a professional accounting firm like Finsmart Accounting to handle their accounting and financial reporting. A seasoned team of accountants can provide valuable advice on financial management, tax planning, and compliance with Indian accounting regulations. They can also help e-commerce startups identify areas for improvement and make informed decisions about their business.

Check out what one of our clients have to say about us: 

Consult Finsmart for Ecommerce Accounting Outsourcing

According to a report by IBEF, the e-commerce market in India is expected to reach $200 billion by 2027, representing significant growth opportunities for e-commerce startups in the country. Proper accounting practices can help these startups navigate this growth and achieve long-term success.

Accounting is a crucial aspect of e-commerce startups in India. Following these tips and tricks can help e-commerce startups in India achieve long-term success in the dynamic and rapidly growing e-commerce industry.

Connect for Accounting Outsourcing Support

Finsmart Accounting – with 15 years of experience in outsourced accounting – is a one-stop solution for all accounting, taxation, and payroll needs for growing business enterprises. Our customer-centric service models, domain expertise, and use of the latest tools & technology have truly helped us to establish ourselves as ‘Trusted FinOps Partner’.

Check out these knowledge resources to gain further clarity on startup need: 

Learn about payroll outsourcing services in India

A comprehensive guide on making your startup recession-proof

The post Accounting for Ecommerce Startups: 9 Tips and Tricks appeared first on Finsmart Accounting.

Small businesses are the backbone of the Indian economy, accounting for a significant portion of the country’s employment and GDP. However, despite their importance, small businesses often struggle to manage their finances effectively. Accurate financial reporting is essential for small businesses in India to succeed and grow. 

In this article, Finsmart – trusted for outsourced accounting in India – will explore the importance of accurate financial reporting for small businesses in India and why it is crucial for their success

Let’s start!

Importance of Accurate Financial Reporting 

The below benefits will help you understand the importance of accurate financial reporting for small and midsize companies:

Clear financial vision 

First and foremost, accurate financial reporting provides small businesses with a clear picture of their financial health. By maintaining accurate financial records, small business owners can track their revenue, expenses, and profits over time. This data can help them identify areas where they can cut costs, increase revenue, and improve overall profitability. Accurate financial reporting can also help small businesses make informed decisions about future investments and expansion plans. No wonder, financial reporting is so important for thriving businesses!

Checks legal obstacles 

Accurate financial reporting also helps small businesses comply with various legal and regulatory requirements. In India, small businesses are required to maintain accurate financial records and file tax returns on time. Failure to comply with these requirements can result in penalties and legal consequences. By maintaining accurate financial records, small businesses can avoid these risks and ensure that they are in compliance with all relevant laws and regulations.

Read on to discover more points of importance of financial reporting or learn about payroll outsourcing services in India

Fundraising ease 

Accurate financial reporting can help small businesses secure funding from investors or lenders. Investors and lenders typically rely on financial statements to evaluate the financial health and performance of small businesses. By maintaining accurate financial records and producing detailed financial statements, small businesses can provide investors and lenders with the information they need to make informed decisions about whether to invest or lend money.

Build credibility 

Accurate financial reporting can help small businesses build credibility with their stakeholders, including customers, suppliers, and employees. When small businesses have accurate financial records and can produce detailed financial statements, it demonstrates that they are transparent and trustworthy. This can help build trust and confidence among stakeholders, which can be essential for attracting and retaining customers, suppliers, and employees.

Check out what one of our clients have to say about us: 

Fraud monitoring

Another key benefit of accurate financial reporting is that it can help small businesses identify potential fraud or embezzlement. By regularly reviewing financial records, small business owners can spot any unusual activity or discrepancies that could indicate fraudulent activity. This can help prevent losses and protect the business’s financial interests. Another great benefit of smart financial reporting!

Learn everything about financial controller services in India.

Future-ready 

Finally, accurate financial reporting can help small businesses plan for the future. By maintaining accurate financial records, small business owners can identify trends and patterns in their financial data. This can help them make informed decisions about future investments, hiring decisions, and expansion plans. Accurate financial reporting can also help small businesses prepare for unexpected events, such as economic downturns or changes in market conditions.

Consult Finsmart for accounting support 

Accurate financial reporting is essential for small businesses in India to succeed and grow. By maintaining accurate financial records, small businesses can track their financial performance, comply with legal and regulatory requirements, secure funding from investors or lenders, build credibility with stakeholders, identify potential fraud or embezzlement, and plan for the future. Small business owners should prioritize accurate financial reporting and invest in the tools and resources needed to maintain detailed and accurate financial records. With accurate financial reporting, small businesses can improve their chances of success and achieve their goals.

Have queries to ask? Drop them in the comments to get a quick reply from our team of accounting and tax experts.

Connect for Accounting Outsourcing Support

Finsmart Accounting with its 15 years of outsourced accounting is a one-stop solution for all accounting, taxation, Indian entry, and payroll needs for growing business enterprises. Our customer-centric service models, domain expertise, and use of the latest tools & technology have truly helped us to establish ourselves as ‘Trusted FinOps Partner’.

Also, read our recently published blogs for more insights on accounting and business growth:

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A comprehensive guide on making your startup recession-proof

The post The Importance of Accurate Financial Reporting for Small Businesses in India appeared first on Finsmart Accounting.

Outsourcing has become an increasingly popular business strategy for companies looking to streamline their operations, reduce costs, and increase efficiency. One area where outsourcing can provide significant benefits for MNCs (Multinational Corporations) operating in India is accounting services. Outsourcing accounting services can save MNCs time and money, while also providing a range of other benefits.

We – a leading provider of outsourced accounting services in India – created this blog to share how outsourcing accounting services can save MNCs both time and money.

Let’s start!

Outsourced accounting benefits for MNCs

Read the blog below to understand how outsourcing can help MNCs in saving time and money. 

#1 Focus on Core Business

First and foremost, outsourcing accounting services allows MNCs to focus on their core business activities. Accounting can be a time-consuming and complex task, and for many companies, it is not a core competency. By outsourcing this function, MNCs can free up valuable time and resources to focus on their core business activities, such as product development, marketing, and sales. This can help MNCs to become more competitive and profitable in the long run.

#2 Cost effectiveness

Outsourcing accounting services can also save MNCs money. One of the primary ways that outsourcing can reduce costs is by reducing labor costs. In India, where labor costs are generally lower than in other countries, outsourcing accounting services can be a cost-effective way for MNCs to access high-quality accounting services without having to hire and train additional staff. 

Additionally, outsourcing can help MNCs to reduce overhead costs associated with maintaining an in-house accounting department, such as office space, equipment, and software.

Here’s what outsourced accounting costs in India

#3 Better Risk & Compliance Management

Another way that outsourcing accounting services can save MNCs money is by reducing the risk of errors and fraud. Every company incorporated under the Companies Act 2013 needs to oblige with all the laws, rules and regulations enacted thereunder. The cost of compliance and monetary fines is increasing to become more stringent. Penalties for non-compliance depend upon the nature of contravention/offense.

Accounting errors can be costly and time-consuming to correct, and fraud can be even more damaging to a company’s finances and reputation. By outsourcing accounting services to a reputable provider with a proven track record, MNCs can reduce the risk of errors and fraud, which can ultimately save them money and protect their reputation. An amazing benefit of outsourcing accounting work, isn’t it?

Here’s how accounting and compliance work with Finsmart

#4 Deep Expertise & Knowledge

Outsourcing accounting services can also provide MNCs with access to a wider range of expertise and knowledge. In-house accounting departments may be limited in terms of their expertise and knowledge, particularly in areas such as international accounting standards, tax laws, and regulatory compliance. 

By outsourcing accounting services, MNCs can access a wider range of expertise and knowledge, which can help them to stay up-to-date with changing regulations and accounting standards, and to ensure compliance with local laws and regulations. Read on for our final accounting outsourcing advantage for MNCs!

#5 Flexibility & Scalability

Finally, outsourcing accounting services can provide MNCs with greater flexibility and scalability. As MNCs grow and expand, their accounting needs may change, and it can be difficult and costly to adjust an in-house accounting department to meet these changing needs. 

By outsourcing accounting services, MNCs can easily scale their accounting services up or down as needed, without having to worry about hiring and training new staff or investing in new equipment and software.

Need help with payroll? Check out these payroll services in India

Conclusion

In conclusion, outsourcing accounting services can provide MNCs operating in India with a range of benefits, including cost savings, increased efficiency, access to expertise and knowledge, and greater flexibility and scalability. To maximize these benefits, it is important for MNCs to choose a reputable outsourcing provider with a proven track record of delivering high-quality accounting services. By doing so, MNCs can focus on their core business activities, reduce costs, and ultimately become more competitive and profitable in the long run.

Connect for Accounting Outsourcing Support

Finsmart Accounting with its 15 years of outsourced accounting is a one-stop solution for all accounting, taxation, and payroll needs for growing business enterprises. Our customer-centric service models, domain expertise, and use of the latest tools & technology have truly helped us to establish ourselves as ‘Trusted FinOps Partner’.

Also, check out our most loved services in India:

Financial controller services in India

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The post How Outsourcing Accounting Services Can Save MNCs Time and Money appeared first on Finsmart Accounting.

As Indian startups continue to grow, they often face a variety of financial and accounting challenges. While managing finances is a critical component of any business, startups can find it particularly difficult to keep up with the complexities of Finance & Accounting while also focusing on growth.

Every company incorporated under the Companies Act 2013 needs to oblige with all the laws, rules and regulations enacted thereunder. The cost of compliance and monetary fines is increasing to become more stringent. Penalties for non-compliance depend upon the nature of contravention/offense.

Finance and Accounting Outsourcing (FAO) is a process of contracting out a company’s finance and accounting functions to a third-party service provider. Outsourcing Finance and Accounting can bring numerous benefits to startups, particularly those based in India. In this article, Finsmart  – a leading provider of financial controller services in India – will explore some of the benefits of FAO for Indian startups and the impact of not having skilled F&A.

Let’s start!

Benefits of outsourcing finance and accounting services 

The below benefits will help you understand why it is beneficial for Indian startups to invest in finance and accounting outsourcing services:

# 1 Lower Operational Costs

One of the primary benefits of outsourcing financial and accounting  for Indian startups is the lower cost of operations. Startups often have limited resources, and outsourcing financial and accounting  can help them reduce their overhead costs. This is particularly true in India, where the cost of labor is relatively low compared to other countries. According to a report by the National Association of Software and Services Companies (NASSCOM), India is the leading outsourcing destination for finance and accounting services.

Recommended reading: Learn about FaaS accounting to simplify accounting and bookkeeping

# 2 Access to Skilled Professionals

Outsourcing F&A can also provide Indian startups with access to skilled professionals who have expertise in the latest financial and accounting practices. Startups often do not have the resources or expertise to handle complex financial and accounting tasks. By outsourcing these functions to a third-party service provider, startups can tap into a pool of experienced professionals who are well-versed in the latest accounting and financial practices. This can help startups to streamline their processes, reduce errors, and improve their overall financial management.

#3 Scalability

Startups in India often experience rapid growth, which can be difficult to manage from a financial perspective. Outsourcing financial and accounting  can help startups to scale up their financial management quickly and efficiently. Third-party service providers can provide support for everything from bookkeeping to tax preparation, allowing startups to focus on growing their business. A massive benefit of outsourced financial and accounting outsourcing if you ask us!

#4 Improved Compliance

Compliance is a critical issue for startups, particularly those in highly regulated industries such as healthcare or finance. Outsourcing financial and accounting  can help Indian startups to ensure that they are complying with all relevant regulations and laws. Third-party service providers are often well-versed in compliance requirements and can help startups to avoid costly penalties and fines.

Here’s how accounting and compliance works with Finsmart

#5 Access to Technology

Outsourcing financial and accounting provide Indian businesses the advantage of financial and accounting technology. Third-party service providers often invest in the latest software and systems, which can help startups to improve their financial management and streamline their processes. This benefit of outsourced finance and accounting services help startups to stay competitive and keep up with industry trends.

Impact of Unskilled Finance and Accounting Talent 

The lack of skilled financial and accounting professionals can have a significant impact on Indian startups. Without proper financial management, startups may struggle to attract investors or secure funding. Inaccurate financial reporting can also lead to regulatory fines, which can be costly for startups. Additionally, startups that do not have skilled F&A may be more vulnerable to fraud and embezzlement, which can have a devastating impact on the business.

Watch this testimonial to learn more about how Finsmart’s expert team of accountants can help your business streamline its financial operations and achieve greater success

Benefit from an Ace Accounting Team

Outsourcing finance and accounting can provide significant benefits for Indian startups, including lower operational costs, access to skilled professionals, scalability, improved compliance, and access to technology. The lack of skilled financial and accounting professionals can have a significant impact on Indian startups, so it is critical for startups to prioritize this function. By outsourcing financial and accounting, startups can focus on growth while also ensuring that their financial management is in good hands

Have queries to ask? Drop them in the comments or email us at sales@finsmartaccounting.com to get a quick reply from our team of accounting and finance experts.

Connect for Accounting Outsourcing Support

Finsmart Accounting with its 15 years of outsourced accounting expertise is a one-stop solution for all accounting, taxation, and payroll needs for growing business enterprises. Our customer-centric service models, domain expertise, and use of the latest tools & technologies have truly helped us to establish ourselves as ‘Trusted FinOps Partner’.

Don’t forget to check our recently published blogs:

Discover top smart financial record keeping tips

Explore major difference of local CA and accounting firm

Tips to raise funds for startups

Best steps to make your business recession-proof 

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Facts

The company is a fast growing Automotive Parts manufacturer and having its Headquarters in USA and operations in China, Mexico, Germany, Japan and wanted to establish an office in India. After company incorporation in India – US management was looking for a reliable partner who can help them with Accounting, Payroll and Compliance requirements at initial stage.

Solution

Our incubation team initially studied the business process and the operational needs of the client. We helped overseas management with getting familiar with Indian laws and regulations. We assisted them with setting up accounting processes and payroll function. Today the company operations are increased considerably. The company has constructed a manufacturing plant in Pune and has appointed India Finance Head. Still after 5 years we continue to work with them for their accounting and payroll requirements.

Value that was added

Our team’s response and understanding of the business requirement enabled them to set up smooth accounting and payroll function with due adherence to applicable laws. We were involved in direct communication with the USA Finance Team providing the Indian counterpart breathing space required to focus on growing their India Operations.

The post Accounting, MIS and Taxation Services For a Newly Incorporated Company in India appeared first on Finsmart Accounting.

Facts

The company is a fast growing Automotive Parts manufacturer and having its Headquarters in USA and operations in China, Mexico, Germany, Japan and wanted to establish an office in India. After company incorporation in India – US management was looking for a reliable partner who can help them with Accounting, Payroll and Compliance requirements at initial stage.

Solution

As a standard practice, our incubation team initially studied the business process and operational needs of the client, identified and assigned different workflows to client accounts, and further prepared a process document that highlighted gaps in the current process. The team redesigned the entire process, streamlined the approval process to ensure a quick turnaround time. This resulted in the intimely payment of invoices, keeping vendors happy, and books up to date. It also contributed to making audits less stressful.

Value that was added

Our team’s efforts and understanding of the process have helped reduce supplier statement discrepancies, improved supplier payment processing, and helped in smoothening supplier relations with an effect of enhanced efficiency of the entire Accounts Payable Process. Today, we process 40% more transactions as compared to the start and proudly contribute to their growth. We also designed Global Spend Dashboard for the management team which helps them understand the flow of expenses across different global regions and expense heads.

The post Accounts Payable Service For a MNC Having Global Presence appeared first on Finsmart Accounting.

Managing payroll information isn’t just about sending off cheques, releasing salaries, and keeping records. It is highly concerned with the organization’s relationship with its employees, handling their grievances, and standing answerable to their concerns and queries.

If an organization aces its payroll management, employees are always going to be smiling… and working.

How do you ensure that your payroll management is on point and your employees are always happy? We’ll tell you. Though it’s not a small task, it’s quite simple. Your internal team should be aligned, trained, and to save resources, you can even outsource your entire payroll process to experts. If not that, you can hire a consultant to guide and advise you.

Stay updated with state tax laws

The state tax laws and the government regulations can change and your organization may take time to get up to date. Send your staff for training keep them updated with the changes and always ensure that changes in your organization are aligned with that of the government.

Discover month-end closing checklist for businesses of all sizes

Automate your operations

Automated operations mean that everything will be aligned, from your employee’s attendance records, leave records, extended work hours, and their requests. You won’t have to have 10 different software or multiple employees working on managing a single leg of the organization.

Be transparent with your employees

Employee objections can be challenging to manage as well as, if not handled correctly, can have a negative impact on the employees and the company. It’s best to stay transparent with your employees. Stay on track, and if you miss, let your employees know. Set proper expectations and keep your employees updated.

Standardize your payroll management

Though, every organization’s payroll operations lead to the same results, the means to end can be different. If you hire a new employee in place of a present one, the new employee may take time to adjust to the new environment even with his/her past experience. It’s best to facilitate internal promotions or standardize your operational structure.

Keep internal deadlines aligned with external

You may have to file forms and give out cheques at the right time of the year and month for the timely release of payments. For that to happen on time, start your internal processes at the right time. Keep your employees and your staff aligned so your payroll is processed without a glitch.

Accounting definitions and terms for small businesses

Outsource to a consultancy

Keeping up with taxes, state laws, and keeping a track of your employee records can be a task for your internal team. You can drastically reduce the cost as well as increase efficiency if you simply hire an external agency. It’s always better to hire professionals if things are getting a bit too serious and heavy for your internal team.

Conclusion

Payroll management isn’t a small task, and it’s a sensitive factor of a company too. Your employees’ happiness, productivity, loyalty, and longevity depend on it. That in turn affects your company’s public recommendation and image. Keep things aligned, use automation software, and listen to your employees… always.

Also, learn about our services:

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The post How better payroll management lead to happier employees? – Finsmart appeared first on Finsmart Accounting.