Month: May 2022

8 Trends That Will Change Accounting Forever

Posted on by @nkpal25

You cannot stop the future or pause it. In today’s world of emerging technologies, professionals in all industries face many changes.

Finance and accounting are not exempt from these challenges. Some industry experts believe that the digital world may not impact accounting. But the following eight emerging trends in accounting are devised to reduce cost, time-consuming manual labour, and human errors.

    1. The move to cloud-based accounting and finance software.

The advantage of having
cloud-based accounting software is that the staff members can access real-time financial information, approve transactions, and collaborate from anywhere in the world.

It reduces the cost of investing and managing on-premise software and hardware. Traditional budgeting ways are inefficient and costly. They take a long time to complete, and the market scenario has changed by then.

The financial data is linked to real activities and resources in driver-based budgeting. It shortens the time taken to create a budget or forecast.

    1. Predictive accounting-drive based budgeting.

Traditional budgeting ways are inefficient and costly. They are quite time consuming, and by the time they produce any results, the market scenario has changed.

In driver based budgeting, the financial data is linked to real activities and resources. It shortens the time taken to create a budget or forecast.

    1. Upskilling and reskilling as a way to stay ahead.

The transition from manual to automated work practice in the accounting field requires regular upskilling and reskilling by accounting professionals. For example, artificial intelligence helps in reducing financial risks as it can access and predict loan risks.

Many companies widely use data protection using blockchain technology to secure digital transactions. Accounting professionals must update their knowledge and skills to compete and succeed in this ever-changing market.

    1. Advisors are moving up the value chain.

When backed by advanced technology, accountants can become an asset to the company by providing additional value as a subject matter expert. Accountants would play a more creative and strategic role in their company as advisors.

    1. Outsourced accounting is growing rapidly.

The regulatory requirements increase as the company business becomes global. Outsourced accounting helps in being current on statutory compliances and allows a business owner to receive accounting support from an expert, eliminating in-house labour and resources.

    1. Client relationships are taking centre stage.

The relationship between an accountant and a client is based on loyalty and trust as they deal with their personal and financial information. Before the internet, the client and the accountant carried most business personally, but technology overtook this tradition.

With the onset of the online accounting software, clients can have multi-user collaboration with the accountant at any time, from any location. It saves time and fastens the speed of operation.

    1. Value-based pricing is becoming the norm.

In tandem with rapid technological evolutions, the accounting industry is witnessing a shift. The manual work is being automated by software. As a result, businesses have been moving from hourly prices to fixed value-based pricing.

As the price is fixed first, the client knows the cost upfront, and the company knows what they will get in return. Although this is a common practice, it has been recently introduced in accounting.

    1. The millennial generation is on the horizon.

Till now, the financial sector has been dominated by the older generation, who have been a bit reluctant to embrace new technologies. The millennial generation is now entering the job market. These guys have technology at their fingertips.

The clients today are the most educated generation in history. When it comes to accounting, they demand fast action and a thorough understanding of technology-based financial solutions. The millennial generation happens to be a boon for the accounting industry.

Conclusion

Technology and automation cannot replace human accountants. However, future accountants will have to develop their competency as the skill set required and job description demands will be more complex due to the changing business environment.

Upgradation in technology is a never-ending process. Organisations that invest in timely training and understand the importance of emerging technologies will remain above the curve.

11 Benefits To Startups By Indian Government

Posted on by @nkpal25

In the age of entrepreneurship, startups or young ventures are becoming more innovative than big companies. Successful startups start from business ideas and provide jobs and new products and services to help grow our economy.

That’s why modern startups are receiving considerable assistance, encouragement, and acknowledgment even at an early stage. However, before you officially enter the market, you must gather in-depth and critical information and take the right legally-compliant steps to make the most out of the business opportunities.

Overview

Startups are essential as they break the conventional barriers, tackle challenges, and encourage individuals to build the future. They introduce new and revolutionary ideas and design unique services, which can greatly contribute to satisfying the needs of individuals across the world.

Since the Government of India has been immensely encouraging startups to flourish, these emerging organizations enjoy a plethora of benefits, including easy financing options. This is why many people, mostly youth, are initiating their small businesses and trying to make room for themselves in the densely competitive market.

Eligibility for Registration under Startup India

Individuals must be over 18 years of age to register under the Startup India Initiative by the Government of India. The company must be a Partnership or a Private Limited Firm to apply under this program. Startup India prefers beginners over those with expertise & skills. It conjointly helps you climb the career ladder a lot quicker.

Here are some of the most prominent benefits that the government of India provides to the startups:

    • Simple Process

The government of India has launched a mobile application and a website that allows simple and expedited registration of startups. The complete process is online by filling up a straightforward form on the website and uploading certain documents.

    • Reduction in Cost

The government provides complete lists of facilitators of patents and trademarks. They also provide high-quality Intellectual Property Right Services and a quick examination of patents at lower fees. The government will bear all the facilitator fees, and thus the startup will solely bear the legislative costs.

    • Easy Access To Funds

The government encourages banks and different monetary foundations to provide venture capital to the Startup founders. The government’s worth of funds for the supply of capital is INR 10,000 crores.

    • Tax Holiday For 3 Years

Startups are exempted from taxation for the initial three years underneath this program, provided they get a certification from Inter-Ministerial Board (IMB). Software like Small Business Accounting Software further simplify the processes related to accounting and tax records.

    • Apply For Tenders

It is applicable for Startups to apply for Government tenders. They are given incentives to receive government tenders under this scheme.

    • R & D Facilities

Seven brand new Research Parks are planned to be constructed in order to supply excellent facilities to the Startups within the R&D sector.

    • No Time-consuming Compliances

Several companies are streamlined for startups to save lots of time and money. Startups shall be allowed to self-certify compliance with nine labor laws and three environmental laws.

    • Tax Saving For Investors

To attract more investors, people investing their capital gains within the government’s project funds can get an exemption from capital benefits.

    • Choose Your Investors

Startups are given the liberty to select their preferred Investor amongst the various Venture Capitalists.

    • Easy Exit

Entrepreneurs can shut their enterprise within 90 days from the date of application concerning winding up.

    • Meet Other Entrepreneurs

To benefit emerging entrepreneurs and to provide huge networking opportunities, the government organizes Startup fests annually, nationally, and internationally.

Closing

The startup culture continues to flourish in India on an impeccably large scale. The Government of India unfailingly promotes the Startup India Initiative to foster the economy, encourage young minds, and make proficient entrepreneurs.

What You Need To Know About Pre And Post Funding Compliance

Posted on by @nkpal25

In general, compliance refers to the act of abiding by rules. Compliance in business is how an organization obeys essential laws and regulations. It also refers to how the organization manages its business, staff, and consumers. Organizations are liable for fines and penalties under various rules and regulations. No one can ignore the significance of compliance because of the regular amendment of laws.

Basic Startup Checklist

Early-stage founders often approach investors too early before they are ready for business. Here are the pointers that can help them present a solid pitch to the investors.

  • Introduction Of The Team

Investors want to know more about the workforce behind the scenes who work for the success of the organization. So, a proper introduction of the team holds significance during pitch presentations.

  • What Is The Problem You Are Addressing?

As a company, you must have a detailed description of the problem that you are aiming to address or eliminate in the future. It should also describe the impact of the problem and its effect on the industry, commerce, and society.

  • What Is Your Solution?

Investors must be aware of the innovative solutions used by an organization to solve the problems. Following are some of the solutions that address organizational issues.

  • Marketing Plan

A marketing plan has information on the target audience, the market that the organization is entering into, proposed pricing strategies, and distribution channels.

  • Projected Financials

The financials include the estimates of where an organization aims to be in the coming years. The financial details also outline the proposed plans of the business. These details will include a statement of profit or loss, a balance sheet, and a cash flow statement.

  • Finance Sources

Funding holds utmost significance in helping a startup grow at a steady pace. It includes vital details about the credit structure of the organization and its equity and debts. Most organizations have
fund accounting software or government fund accounting software to maintain their finances.

Pre-funding Compliance

  • Compliance With The Registrar of Companies

According to the Company Act 2013 guidelines, a private limited company can issue shares to raise funds by making a preferential allotment of shares. The preferential allotment must include shares issued by a listed or unlisted company.

  • Conducting A Board Meeting

All board members must receive a notice at least seven days before the meeting. Mentioned below are the matters to be discussed in the team meeting.

  • Consideration of the valuation report
  • The decision regarding the list of allottees
  • The decision regarding the offer period
  • Setting up a bank account to receive the money
  • Finalizing the offer letter
  • Schedule and venue of the extraordinary general meeting
  • Conducting Extraordinary General Meeting

The objective of an extraordinary general meeting is to pass a special resolution with a 12 months validity regarding the preferential allotment.

  • Issuance Of Offer Letters

The private placement offer letter or application is sent to the proposed allottees in writing or electronic mode within a month.

Post Funding Compliance

  • Allotment Of Shares

The securities must reach the allottee within sixty days after receiving the funds concerning the allotment of shares. One must file a return of the allotted shares with the Registrar of Companies within thirty days of security allotment.

  • Issuance Of Share Certificates

All allottees must get the share certificates to become the official shareholders of the organization. However, if the funding comes from a foreign investor, an organization needs to observe additional compliance as per the Reserve Bank of India guidelines.

Bottom Line

Pre and post-funding compliance is a significant process for startups in India. In order to successfully raise funds, the most vital factors that one must execute concerning the pre and post-funding compliance process are meetings, registrations, allotment of shares, and issuance of certificates.