Month: November 2018

In 2017, we have witnessed accounting making further progress towards cloud resulting in automation and integration of platforms. It helped in reduction of day to day paperwork to give accountants time to focus on basic other stuff which helps in organization growth. In the year 2018, we will be seeing accounting taking a more in-depth route to its journey in 2017.

Better Visualization of Financial Data:

In 2017, we have seen many small and medium organizations managing their financial data in excel sheets and hard copies, which made their accounting management a complicated and tedious process. It was insane to look at the way the economic data is presented to the management to make some business-critical decisions. Towards the second half of the year 2017, we have noticed many companies shift towards technology to manage their accounting.

With many organizations adopting technology to manage their accounting, financial data now can be sliced, diced and presented better for easy understanding. Visualization of Financial Data in graphs and charts on dashboards makes it easy for the senior management to monitor the accounting process which helps in easy decision making.

Accounting Digitization:

With the implementation of Technology, the Physical paper is now only about 15% of the accounting system. These physical documents are also digitized with the help of OCR technology and are stored in the respective category in the accounting management system implemented. Last year accounting digitization of previous years physical documentation was in full swing, and it will be a continued trend this year to achieve 100% paperless accounting process in an organization. At this point, there are very few companies that have 100% paperless accounting system in practice.

Do It Yourself Accounting (DIY Accounting):

We at Cogent have observed in 2017 that DIY accounting is on the rise in the organizations that have a revenue under $100000 per annum. DIY accounting gives a financial grip to the owner that enables him to use his finances wisely as he is aware where his dollar went. The other advantages of DIY accounting are your organization financial data remains in the house which is very much critical for IP based organizations to survive.

However, maintaining compliances, auditing and taxation will need a specialist on the job. In 2018, we expect to see a rise of DIY accounting in start-ups leveraging technology which after a certain period of growth will be handed over to a specialist.

Globalization:

Last year, we saw that trends like BREXIT made an impact on accounting process and procedures for companies who have been doing business in the region. Accounting professionals will play a key role in implementing the necessary changes due to globalization. In 2018, we expect a backlash against globalization which provides opportunities for accounting professionals to work on the differences in financial, taxation and cultural systems across the globe. The accounting professionals must gear up to keep themselves on the ground with the impact of globalization.

Diversification of Skill Sets:

With Cloud and Automation stepping into accounting, there has been an increased demand in diversified skill sets related to accounting such as accounting professionals should also be able to play the role of a business analyst or data scientist. In 2018, accounting professionals with analytics edge will be more on demand as per our understanding of the markets we serve. Other than analytics edge, other skills like communication, problem-solving, and flexibility will be in need in addition to the necessary finance and accounting skills.

Using Automated Accounting Software:

Automation is a significant emerging trend in the year 2018 and accounting sector too is moving towards the same. While it is beneficial to let automated accounting programs do the tasks on your behalf, there still might be cases where you may need expert human assistance to perform accounting tasks. This is where accounting services outsourcing company comes into play. They can help achieve the bookkeeping and accounting tasks that require human expertise.

As we all know, behind every good business is a great accountant, and it is a language of business. We at Cogent Professionals provide the best solution for all your accounting needs. A professional hand is always welcome when working on your accounting needs.

Most of us have the entrepreneur zeal in us with a tentative timeline. The corporate environment over the past few years have gone through a significant change and is now in favor of a start-up. With the encouraging signs all around, if you own a great innovative idea you must be trying to give it a legal structure to take it forward as a company or if you already have a legal structure, you still might be trying to make it more compliant from a legal standpoint.

Giving a legal structure to your idea or concept and thereby adhering to the compliances set by the law of the land, helps you to better perform your business as most of the legal compliances concerning company formation are aimed at the successful running of the business. However, giving a legal structure to your thought needs you to think like an entrepreneur, understand different aspects involved in detail, then choose the structure that is most suitable to you and complying with the given set of procedures. This is a continuous and a full-time activity that an organization cannot ignore.

Did you know that nine out of every ten start-ups fail as per Forbes research? The one company survived is because it has done everything right from ideation to company formation and complying with the law of the land efficiently on a continuous basis.

Being an Entrepreneur is a journey that needs a lot of time, effort, and hard work before you enjoy the fruits. This is where many start-ups fail, if you survive through the hard times, the rewards are also equally high. Let us understand some of the best practices to get started on your entrepreneur journey or to move to the next level.

Ideation:

This is the first step. You must have a solid idea or a concept which you believe has a demand in the market and it will add more value to the customer. Once you have an idea, you need to brainstorm it with a few set of people and test the waters with trusted audiences.

Business Plan:

After successful testing of your idea, Business Plan is the first document that you need to generate covering aspects like Finances, Resources, Revenue model and company operations. You should also decide whether you will be venturing alone or going with partners. Building a business plan needs expertise as many start-ups that survived their first year in business had their business plan written by experts.

Assess Your Finances:

This is a tricky step. Most of the time people underestimate the finances needed to run a business and many times an investment is required. You need to be aware of the best available financial options in your line of business. Study the competition. Take help of a CA or CPA to have these things streamlined for you.

Company Formation:

You must first decide the structure of the organization. It can be an individual operated or a partnership model. You have further many options, pros, and cons for every option available. You will need to gather all the information and then do a fitment analysis as to which model works for you. You also have got to select a name of the entity that is unique to your business.

In the US, we have the options of LLC & Incorporation. In India, we have options for Sole Proprietorship, Partnership, LLP, Private Limited, Public Limited, One Person Company and Section 8 Company (for Charity) like 501(c)(3). Based on the choice made there will be set of process and procedures defined by the law of the land to adhere to and get your incorporation certificate, Income Tax Registrations (PAN, TAN) etc.

Do not hesitate to hire expert advice in this step as this is the most crucial step that every organization has to go through successfully.

Compliance:

Post company creation, you need to cautiously meet all the compliance required related to different business aspects that you deal with.

You will need the following at the time of formation of the company depending on the type of services or products you sell:

• Income Tax Registration (PAN, TAN), Bank Account, Lease Deed
• SEZ, STPI, 100% EOU for Export Oriented Units
• Import and Export Code Number and Customs, Taxation Compliances
• Foreign Direct Investment (FDI and ODI), FEMA compliances with Reserve Bank of India compliances such as FC-GPR, FC-TRS and FIPB approvals
• Employee contracts
• Vendor Contracts, Customer agreements, MOU’s
• PF, ESI, Gratuity, Social Security like 401(k) etc.
• There will be some compliances that need to be followed on an ongoing basis:
• Companies Act Compliances, Secretarial services, Directors, Meetings, Minutes and Annual fillings
• Books of Accounts maintenance
• Payroll
• Vendor Management
• Finance
• Assurance
• Annual Reports, Tax filings
• SEZ, STPI, 100% EOU – Monthly, Quarterly, and Annual Returns
• Periodical Labour Law Compliances
• Contract Management and Registration of Agreements
• Patent, Copyright, and Trademarks
• Due Diligence services
• Subsidiary, Associates, sister concerns and related party consolidation

Select Your Technology:

Choose the right technology aids that will help your company run successfully like Financial packages, Human Resource Management solutions, CRM solutions and so on. Have a proper reporting structure in place for secure operations management across the organization.

Define Organization Structure:

Choose the right Organization Structure based on the service you provide and the Industry Vertical you serve. Have a correct intake process defined and create a flexible environment in your organization for better fruitful results. Hiring right talent takes your company to the next level.

Enable Growth Hacking Delivery:

Set up the right sales and delivery teams to kick-start your revenue cycles.

It takes time to be an entrepreneur and has a robust path ahead.

GST the biggest tax reform in India founded on the notion of “one nation, one market, one tax” is finally here. The moment that the Indian government was waiting for a decade has finally arrived. The single biggest indirect tax regime has kicked into force, dismantling all the inter-state barriers with respect to trade. The GST rollout, with a single stroke, has converted India into a unified market of 1.3 billion citizens. Fundamentally, the $2.4-trillion economy is attempting to transform itself by doing away with the internal tariff barriers and subsuming central, state and local taxes into a unified GST.

The rollout has renewed the hope of India’s fiscal reform program regaining momentum and widening the economy. Then again, there are fears of disruption, embedded in what’s perceived as a rushed transition which may not assist the interests of the country.

Will the hopes triumph over uncertainty would be determined by how our government works towards making GST a “good and simple tax”. The idea behind implementing GST across the country in 29 states and 7 Union Territories is that it would offer a win-win situation for everyone. Manufacturers and traders would benefit from fewer tax filings, transparent rules, and easy bookkeeping; consumers would be paying less for the goods and services, and the government would generate more revenues as revenue leaks would be plugged. Ground realities, as we all know, vary. So, how has GST really impacted India? Let’s take a look.

GST: The Short-Term Impact
From the viewpoint of the consumer, they would now have pay more tax for most of the goods and services they consume. The majority of everyday consumables now draw the same or a slightly higher rate of tax. Furthermore, the GST implementation has a cost of compliance attached to it. It seems that this cost of compliance will be prohibitive and high for the small scale manufacturers and traders, who have also protested against the same. They may end up pricing their goods at higher rates.

What the Future Looks Like
Talking about the long-term benefits, it is expected that GST would not just mean a lower rate of taxes, but also minimum tax slabs. Countries where the Goods and Service Tax has helped in reforming the economy, apply only 2 or 3 rates – one being the mean rate, a lower rate for essential commodities, and a higher tax rate for the luxurious commodities. Currently, in India, we have 5 slabs, with as many as 3 rates – an integrated rate, a central rate, and a state rate. In addition to these, cess is also levied. The fear of losing out on revenue has kept the government from gambling on fewer or lower rates. This is very unlikely to see a shift anytime soon; though the government has said that rates may be revisited once the RNR (revenue neutral rate) is reached.

The impact of GST on macroeconomic indicators is likely to be very positive in the medium-term. Inflation would be reduced as the cascading (tax on tax) effect of taxes would be eliminated. The revenue from the taxes for the government is very likely to increase with an extended tax net, and the fiscal deficit is expected to remain under the checks. Moreover, exports would grow, while FDI (Foreign Direct Investment) would also increase. The industry leaders believe that the country would climb several ladders in the ease of doing business with the implementation of the most important tax reform ever in the history of the country.

Summing Up
On priority, it is up to the government to address the capacity building amongst the lesser-endowed participants, such as the small-scale manufacturers and traders. Ways have to be found for lowering the overall compliance cost, and necessary changes may have to be made for the good of the masses. GST will become good and simple, only when the entire country works as a whole towards making it successful.