You
finally decided to get your venture registered. What next? Here are five things
that you must do to manage your business’s accounts and finances immediately
after registering your business.
1.Register for PAN and VAT: Regardless of size,
nature or geographical location, your business has to get a Permanent Account
Number (PAN) just to start operations. PAN can be obtained from Internal
Revenue Department after submitting an application form with supporting documents,
which include a registration certificate, minute of Board of Directors and a
photograph of at least one promoter or shareholder. It is also mandatory to
display a copy of PAN certificate at your office.
2.Open a Bank Account: You must open a bank
account, and all business transactions should be made through this account.
Limit the use of cash for petty expenses. This will help track and reconcile
transactions, and also keep them transparent.
3.Maintaining Purchase and Sales
Book: Purchases and sales
books include:
(a) The invoice number
(b)
The invoice date
(c)
The supplier’s name and PAN number in the purchase book
(d)
The customer’s name and PAN number in the sales book
(e)
The taxable value, and
(f)
The amount of VAT
If
you are registered for VAT, a separate VAT account must also be maintained. VAT
account contains purchases and sales and the VAT spent and collected.
4.Designing and using Voucher: Every transaction-
either recorded manually or digitally – must be supported by a relevant
document justifying the transaction. All the documents should be grouped under
a voucher that summarizes the transaction and provides appropriate ‘account’
head and narration to it. A good voucher should allow transactions to be
endorsed by the voucher writer, checker and approving authorities.
5.Using Invoice/Receipt: All the transactions -
either of receipt or of payment – should reflect on the invoice or receipt. It
provides the basis for a transaction as mentioned above.
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