Why Cloud Accounting is better than traditional accounting?

Cloud accounting is widely accepted by small businesses. Cloud Accounting is termed as online accounting and manual accounting called as traditional accounting. Why we need cloud accounting? The best answer would be to save time, money and to reduce accounting errors. Also cloud accounting is the best way to do accounting as you can save & edit all your data at anytime and anywhere as data will be save on server. These are some features which attract small businesses to use accounting software.

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Step-by-step guide on GST Registration

GST marked as the biggest tax reforms in India since 1947. It’s a unified tax implemented by current BJP Government with an aim to erase all state or central government indirect taxes. GST subsumes 11 Indirect taxes that were levied on the sale of goods and services by central or state Government. GST made indirect taxation process simpler for small and medium scale enterprises. It will also boost economic growth in a long run. New small businesses will be benefited from this new tax law as they have to pay less tax under composition scheme (SMEs with Rs.20 – Rs.50Lakh turnover).

As we are saying that GST made taxation easier. So, let’s have a look at its registration process. In this article we will cover all details regarding GST registration with below-mentioned points:

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Revised GST – Why it’s a best Diwali gift for traders?

Since its implementation on 1st July, 2017 GST has been always in the news due to its high tax rates & bit complicated tax slabs also Govt faces lots of criticism for it.

Recently RBI forecast GDP growth rate at 7.3% (2017-18), which is lower than last year’s GDP growth rate. To main economic stability and for a higher GDP growth Government decided to revise tax rates.

On 6th October Finance Minister Arun Jaitley announced new tax rates after a long & fruitful discussion with GST council members.
The GST council slashed rates on 27 items and 12 services.

Here are the details of revised tax rates on goods:

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GST Council trims tax rates to ease the filing process

GST Rate revised

Since its implementation on 1st July, 2017 GST has been always in the news due to its high tax rates & bit complicated tax slabs also Govt faces lots of criticism for it.

Recently RBI forecast GDP growth rate at 7.3% (2017-18), which is lower than last year’s GDP growth rate. To main economic stability and for a higher GDP growth Government decided to revise tax rates.

On Friday Finance Minister Arun Jaitley announced new tax rates after a long & fruitful discussion with GST council members.

Continue reading “GST Council trims tax rates to ease the filing process”

What is a journal?

Journal:

In Journal all first transactions are recorded with specific date then these entries categorized into different accounts like sales, purchase etc. in a book called Ledger. In manual accounting all these entries need to be done manually but in accounting software respective ledger automatically created at the same time when we enter data in Journal.

Journal is of two types: single entry and double entry. In double entry each entry needs followed up with two accounts. This is another and detail form of journal entry.

Here is the Journal entry format:

Example:

 

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What’s accounting? Accounting terminologies

Accounting is the backbone of every business. Its very necessary for start-ups’ to have a clear and detail knowledge on all accounting terms to manage business finances easily also to have a better talk with investors. In this series we have compiled a list of basic accounting terms and its details to provide our users a better and in-depth knowledge on accounting.

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Accounting: Accounting is a way of keeping record of all financial transactions followed by summarization and analysis in the form of a book. Accounting also called as book keeping. It shows the financial health of a business which in turn will help the business owner to take better decisions for growth of the business.

Accounting provides detail information on available stock, budget, cash flow status, profit & loss status etc.

Recently companies are using cloud accounting softwares for easy and error free accounting. Also this is the best way to save time and money on accounting.

Accounting cycle:

Accounting Example:

 

This is just an example how entry items in a account using an online accounting software.

Growth can kill your business: Don’t plan your organisational growth before reading this

Companies with high employee retention issues are hard to succeed. As we are digging deeper into analytics we are becoming closer to have good maths on these points.
 
How much of new employees your existing organisation can handle and what’ll be it’s average and worst financial conditions.
 
We advice companies with high employee cost to revenue ratio, to keep an close eye on that ratio. If at any point that ratio is exceeding 0.4 points in any directions, your organisation will have trouble handling it.
 
So we’ld advice, have a process in place. And a good training program for new employees at the services that is giving you higher sales volume and higher profit. And keep an close eye on it. And keep ramping up sales here. But understand that ratio.
 
Grow up team in new services slowly. And so the sales.
 
Organisational turbulence is one metrics that takes most companies go down. But it’s hard to see early on. Often the problem arises after 5-6 months. And make it difficult to handle, even if you are highly profitable.
 
Growth kills more businesses at faster rate, and stability kills businesses at a slower rate. So keep growing, but understand stability keeps you liquid.
 
So before you keep growth on trajectory, ensure fund of at least 3 times that of CIH needed, hence a profit index of 200-300%.
 
If you are planning speeder growth and you are just 100% in profit index. Takes external investment of another 2times of CIH needed, suggested in Periodic Profitability Graph, within one month of beginning the growth implementation. And if in any moment during high growth, your profit index reaches 120% or below, ramp sales up and you need to keep that number there to not fall out pray of downward spiral.
 
For high growth, I mean to say at par or above 20% of your present organization head count.
 
Hope that helps.

Low pricing businesses. Here is rule no 1 to stay profitable

We see many businesses trying to get lot of income in a highly competitive market by providing their services and product really cheap. While this is not a bad thing to be known as Low Price King if you did your maths on pricing and how to deliver in budget, many among you file losses due to avoidance of Rule No1 of this market. i.e. “Be Lean & Stick to the plan”

You could be able to provide products because you figured out the volume to sell, maintaining the operation etc. Like in case of WallMart or BigBazaar in India, they have a very great supply chain to make them be able to do it.

So it’s important for your business not to be slightly over budget in any field. The major problem comes in Operations. You need to be lean and should use perfect tools and checks (bound by time & budget) in place to do so.

Let me give you an example:

If a small shop will sell 500 pieces of AwesomeCheapThing at $1 eachday with a profit margin of just 5cents, he gets (5×500)/100 = $25 in profit eachday. Let’s see if one day its supply truck came late by just 1 hour which reduced its sell to mere 450 pieces for that day. He lost 5×50 = $2.5 on direct sell. But if we analyze what he actually lost, we got to know he pays his sells man for that 1 hour without selling anything + electricity cost etc + he spent little extra for inventory of that 50 pieces which made his loss to little more higher making that product price to sell at $1.5. But we guys have a tendency to neglect such minor stuffs and we just think that we lost only $2.5 for that day.

But the guy who is selling it at $10 and sell only 3 pieces may not have that much of trouble and all extras can be adjusted to his profit.

So if you guys operate in a low profit environment, being lean and on time makes sense else you might be doing just another business that’s losing the only issue here is that you don’t know where you lost it. You can to stick as some high strength glue to your operation plans. Losing is not a bad thing but knowing where exactly you lost is real crucial for you.