How to Find a Professional Accountant for Business Firms?

 Most small businesses like to choose an accountant from the best chartered accountant firms in Chennai or any part of India, either selecting someone from the staff or hiring accounting services on a contract basis, especially when the business' financial challenges require an expert help to sort out the business.

The reasons why you need an accountant, range from,

·  You need to handle your financial function better.

·  Your accounting software isn't exactly providing the type of data you require to increase the growth of your business.

·  You are also facing trouble shifting from cash to accrual accounting.

·  You have a tough time going through the financial statements which are either inaccurate and/or incomplete.

With so many reasons in favour of finding the right accountant, it is time you looked for a Certified Public Accountant (CPA).

 How to Find the Right Accountant?

Many entrepreneurs who start their own businesses venture out by trying to be the accountant himself or herself and attempting to do their own taxes, apart from handling the entire business, too. Granted, it is easier for a layperson, to keep track of a business' finance now with the likes of simple bookkeeping software, such as Quicken, QuickBooks and Microsoft Office Small Business Accounting. But it is difficult to handle all the financial functions yourself, especially when your enterprise grows bigger. This is when the requirement of a specialist arises.

The right accountant can be beneficial for the business in a number of ways.  With tax returns and longer term tax planning, networking, business planning and even personal tax planning if you have the major stakeholder in your business.

Choosing the Right Accountant

Many small businesses don't have a huge number of financial transactions and thus it is not required hiring a full-time accountant on staff. Then again, the financial situation of the business is such that you may need regular financial review and planning and also accounting. This is so much better than leaving everything right from invoice, receipt, and ledger to the tax preparer, at the end of the financial year.

 Finding a Referral in order to choose the Right Accountant
If you are looking for an outside accountant, try to find out the firms your friends and colleagues are using. Ask people who are in the same or similar industries for names or references.

Now if you are planning to hire an inside accountant, seek the help from colleagues and friends, look for employee search firms, newspaper advertisements, and Internet websites. These are just some of the resources that can be used.

 Interviews and Reference Checks when Selecting the Right Accountant

Some businesses can ill afford to hire the wrong person, read the accountant, especially when it comes to small enterprises. The accountant will work in a number of ways especially when handling the company's books, records, and other proprietary information.

It is absolutely necessary for the business owner to take the time to interview the different firms and individual candidates. You have to particularly check if they have the required experience in your industry, your size of the company, and software sophistication and so on. These are some of the ways to find the best accounting firms in Chennai and other cities of India.                                                                                      

Audit Vs. Accounting

When does auditing process start? Right when accounting process ends. This helps determine the purpose of the fair picture of books of accounts. Accounting is an activity of record keeping and helps both in the preparation & presentation of the financial record. 

Accounting helps track the monetary transactions. It is a business language as it is considered a tool for recording a financial statement of the business entity. Auditing, on the other hand, is an activity which verifies the financial statement. It’s main aim is to check and confirm the authenticity of financial books which the accounting staff prepares for the enterprise. Thus, it checks and proves the validity and reliability of the accounting information.

The Chief Differences Between Accounting and Auditing

The points below can help differentiate between accounting and auditing, in detail:

·         Accounting is an orderly way of maintaining the records of the monetary transactions and then preparing the financial statements of the company. Auditing is largely an analytical task which evaluates the financial information and independently expresses an opinion which is fair and true.

·          Accounting Standards governs accounting, whereas the standards on Auditing governs the auditing.

·         In comparison with auditing, accounting is a far simplified task. Accounting is as the name suggests is performed by the Accountants. Auditing is a much complex task and the task of auditing is performed by auditors.

·         Accounting helps reveal the financial position, the profitability position and the performance of the organization.  Auditing, on the other hand, helps check the correctness of the financial report.

·         Accounting, unlike auditing, is a continuous activity. Auditing, on the other hand, is a periodic activity.

·         Where the accounting ends the auditing begins.

Conclusion

Accounting and Auditing are both important in their own ways and specialised fields, but the scope of auditing is much more than accounting as it is a thorough and painstaking process. You need to understand and evaluate several things that include various tax rules, acts. Also, knowing in depth about both accounting standards and auditing standards as having proper communication skills is very important.

Apart from all the above points, there are several other points to consider and are required like integrity, confidentiality, honesty, and independence they are all to be maintained while you undergo the auditing process. When the auditor submits the financial report, it becomes helpful for a host of people such as investors, creditors, investors, debtors, suppliers, customers, government and so on for proper decision making.

Though auditing is considered more important, it would be foolhardy to consider accounting any less than auditing. There are several things which you need to keep in mind while conducting an accounting. It requires you to have complete and in-depth knowledge of all the accounting standards, conventions, principles, and assumptions too along with Companies Act rules and tax laws. The truth is auditing cannot be conducted alone, the procedure of auditing can only to be conducted when accounting outsourcing services are conducted prioperly so, accounting cannot be neglected by hook or by crook.

How will the GST impact your start up business?

The GST bill is supposed to bring about a great change in the Indian economy. GST helps streamline the whole process of indirect taxation and this helps make it more effective. 

The tax payers shall get a little relief as it will pay one consolidated tax instead of a number of taxes that includes service tax, state value-added tax (VAT), entry tax, central excise, octroi or entry tax and a few other indirect taxes as well. 

Most of the developed countries have already been using this form of taxation. This helps in simplifying the entire tax structure and also avoid the double taxation.

The GST will be levied on the price which is actually paid or payable it is also known as the “transaction value.” which includes packing cost, commission, and plenty of other expenses incurred for sales. 

This tax will be payable at the final point of the consumption. The GST will have two components – the Central GST and the State GST. This is easier to legislate and administer the respective taxes.

 Is the Implementation of GST a good news for Start-ups?

GST is thought to be a perfect for businesses in India, but is it good for small businesses too? Read start-ups?

1.    It helps ease a new business: When a new business starts you need a VAT registration from sales tax department. A business has to face many teething problems with issues regarding procedures and fees in the state. The two things that GST does is it brings about a uniformity in the process and propels an easier start to business and also a centralised registration.

2.Ease of tax burden: The current tax structure dictates that if any business which has a turnover of more than Rs five lakh, will have to get VAT registration and pay VAT. GST has a higher limit and has risen up to Rs 10 lakh. So, businesses have a turnover of Rs 10 and 50 lakh will be taxed at lower rates. This will help ease off tax burdens and a great reprieve for new businesses.

3.    Taxation process is simplified: Sticking to various regulations at different States make the process slightly more complex. GST will simplify the taxes, making the process of paying taxes simpler.

4.    Reprieve for businesses in both sales and services: Businesses such as restaurants, which are under the purview of both sales and service taxation are supposed to calculate the VAT and service tax on both items separately making the calculations process extremely complex. GST does not distinguish between sales and services, and the tax calculation is done on the total.

5.   Minimization of logistics costs across States: There are a number of transport vehicles that get delayed during the free movement across States as there are two issues to be dealt with, small border tax and also check post issues.  With the GST the Interstate movement lessens and also saves big on time, as these taxes are eliminated.

Thus the GST has a positive impact on small business and start-ups as there is a simpler taxation system.

8 things to know about the GST Bill in India

The Goods and Services Tax (GST) is the biggest game-changer in the paradigm of India’s indirect tax structure since the economy opened up some 25 years ago.

 The GST in India is said to be an answer to many financial problems. The Goods and Services tax or what is more commonly referred to as the GST is expected to replace the indirect taxes which are levied by the State and the Central Governments and provides a much more streamlined alternative.
Business owners will also find India as a unified market who want to bring a lot of black money right into the mainstream economy. The tax is supposed to be implemented at every step of value creation.
Our previous tax structure had a value added tax structure on both the state and central levels. VATs cover only sales and sellers and is not allowed to claim the credit against VAT which is paid on earlier purchases.

It does exclude a number of other taxes which covers luxury and entertainment tax within the states. Once the goods and service tax is implemented it would mean a cascading sequence of tax credits. At each stage, the seller would be able to set off his taxes. Thankfully, the consumer, at the end of the line, having to bear the cascading effect of the taxes till now, would only have to bear the taxes levied by the last dealer.

Here are the eight things to bear in mind about the GST Bill in India,

•    The GST is an indirect taxation where most of the current taxes are merged into a single taxation system.
•    Now that the the GST Bill is passed, it will allow both the Centre and the states to charge an indirect tax on the several things like the manufacture, sale, and the consumption of goods and services across the country.
•    Saying it in a nutshell, the GST would bring together all taxes in one basket all levied by state and Central government and unify them into a single-tax sturture thus eliminating the system of multiple taxations and also promote the concept of one nation, one tax.
•    The GST is governed by the GST Council which is governed by the Finance Minister. The finance mister Mr. Arun Jaitley's says that once all taxes are removed and the cascading effect of the taxes is removed, the prices of goods will also come down substantially.
•     A smooth GST rollout is a challenge in itself, as it needs a coordination between the states and the Centre to ensure that there are uniform tax rates for all goods and services.
•    The GST council has put forward a system of a four-tier uniform tax slab of 5, 12, 18 and 28 per cent on goods and services, along with an additional cess on demerit goods which includes tobacco products, luxury cars, and aerated drinks.
•    The Food items which have been kept in the zero-per cent slab is not expected to attract any extra taxes. As of now, the petroleum products too which are under the GST will also remain in zero tax slab.
•    With the GST being levied there are many taxes which will be subsumed such as, Centre-level taxes which includes the Sales Tax, Excise Duty, and the state-level taxes like the luxury tax, the Value-added Tax (VAT), Entertainment Tax and so on.
Thus, the above important points on the GST proves that it is one indirect tax for the entire nation, which will ensure that India remains, one unified common market.

What is the difference between a VAT and a GST?

With the advent of GST, the rules of the old vat are not depended upon anymore as most businesses are required to apply for GST registration. The difference between the Vat and GST lies in the way the extra taxes are filtered and how all the taxes will no longer be separated.

To know more about the difference between the current taxation and the new GST tax in India you will have to know more about the GST tax. 

GST is actually a tax policy that means one market all around the country. This system actually reduces the complicated structure of taxation as it creates a common market. This also reduces the burden of a tax payer as it brings down the indirect tax and also the import and exports taxes.

The business that has an income lower than 20 lakhs is not required for registration in GST.

GST removes the cascading effect of several taxes that the tax payers pay.

In India, the GST tax will finally replace almost all the indirect taxes and encourage a common market with an easy tax structure and simple tax payment. 

The cost levied on all the commodities will drop, thanks to the GST implementation as it does away with the tax on tax syndrome.

Differences Between the Vat and GST

The VAT and service tax are taken separately as VAT is considered separately for goods and separately for service while the GST is common for both of it, making it simpler to follow.

The several indirect taxes together increases the tax and with every state having their own tax rate, increases the amount of tax rate as the goods are transported from one state to another. This results in a cascading of taxes and with the implementation of GST, such problems can be avoided.

GST will also do away with the differences in the structure of taxation between the states and this will lead to single indirect tax.

Central and state governments

GST will make the tax compilation better and seamless with the transfer of input tax credit from one stage to another.

GST will also be reducing the tax collection of the government and hence lead to higher revenues.

Consumer

Due to a high tax rate on every item and the increasing value when it reaches the consumer flummoxes them as they do not understand the exact process of the implementation of taxes as it is a real complicated process.

Thankfully the overall tax burden will reduce considerably and the consumer’s burden will also reduce significantly.

The GST is implemented and it will leave an impact in the every sector. Some of these impacts can be temporary in some of the others it is permanent. 

The impact is actually expected at a high rate as the transformation in the game of tax will either see a slight or a huge leap in the world of business and of course it all depends on the different category of business. Every sector will feel a different kind of repercussions.

How is GST beneficial for the country? How would it help to improve the country's economy?

The GST goods and service taxes is a bill that has been recently passed and it makes your tax structure easier and helps in doing away with all the extra taxes from a business.

GST helps manage your taxes easily and can throw in a lot of clarity on what you are paying for and what is the number of taxes that you are paying. It leaves out all the unnecessary taxes you have been paying along without knowing much about it. 

With GST all the taxes are paid and all the complexities are done away with. It is a consumption based tax which depends on the sale, manufacture and also the consumption of good and services at a national level. 

With the rise in Global trade, GST has almost achieved a global standard. It brings out a qualitative change in the tax system and helps redistribute the burden of taxation equitably between both manufacturing and services.

Will GST Bring about an Improvement in the Economy? Let us find out

Some of the direct benefits of GST can be listed as follows,

·         It removes bundled indirect taxes including the VAT, CST, service tax, CAD, SAD, and also the excise.

·         A simplified tax policy, a great change from the the current tax structure.

·          Doing away with the casacading effect of taxes.

·         Slashing down of manufacturing costs as the burden of taxes lowers down considerably on the factoring sector. Hence prices of consumer goods will come down.

·         The common man will be greatly benefited as they will have to pay less money.

·         Both the demand and consumption of goods increases.

·          Increase of demand leads to increase in supply, which will ultimately lead to a rise in the production of goods.

·          The black money circulation also gets controlled, especially circulated by the traders and shopkeepers will be checked thoroughly.

·         A sharp reduction in the price gap between the organized sector.

·         The warehouse/logistics costs will be controlled across both the operational and non-operational segments. The best psart of this is it will improve operational profitability by the almost 300-400 bps.

·          The 7th Pay commission will also boost demand and fund inflow, especially in the consumer durables sector. It is expected to rise during the end of this year.

The indirect tax in the country has improved the model of their supply chain and systems thanks to the multiplicity of taxes and costs involved. The total tax collection in India including both the direct and indirect is Rs. 14.6 lakh crores and from that about 34 percent of that comprises indirect taxes and with Rs. 2.8 lakh crore comes from excise and another Rs. 2.1 lakh crore comes from the service tax. 

Thus, with the implementation of GST, the entire indirect tax system in India is transformed and going in the right direction, at least as far as the economy of the country is concerned. The tax revenue expectedly will change the face of the country’s economy and will help bring at par with the other economically prosperous countries of the world.