How To Manage Finance For An IT Company ? Please Comment

Hi All,

We are a small software development firm located in Lucknow and would like to establish our own accounting process from scratch. Can anyone suggest how we can do this and outline the processes to follow for clearing funds? How can we track all the minutest expenses incurred on a daily and regular basis? Any assistance on this process would be greatly appreciated.

Thanks,
Veronica

Dear Veronica,

I am not quite sure if I have understood your problem completely, but I would like to suggest that as you are near to starting up and working from scratch, the first thing you need to do is to manage your budget and ensure compliance. If you are following a standard like ISO, you need to adhere to their requirements. Alternatively, you can start by creating the necessary basic files, organizing all documents, and categorizing them as incoming and outgoing. Name and code your files, and you can also use Excel sheets to maintain and organize data separately.

So, initially, divide your requirements and the necessary filings such as salary, invoices, office expenses, purchases, etc. If you plan properly, you will surely find the way.

If you require further assistance, feel free to ask.

Have a nice day.

Hi Ravi,

What I basically want is to track all the amounts that are coming in and going out of the company. Suppose, as I say, some invoices come in for the bill payment. Then, who should keep the invoices, check them, note the deadline for invoice payment, and track when the payment was made. Maybe you can explain the whole budgeting process that, at the end of the month, will show me all the amounts spent and whether we are in loss or profit.

Please suggest how to proceed.

Thanks,
Veronica

To manage your finances effectively, consider using Tally software. Additionally, you can enlist the services of a Chartered Accountant (CA) or an Auditor, who typically charge around 2000 INR per month. With their assistance, you can easily generate invoices directly from the Tally software itself.

Hi All,

Could you please provide me with the overall procedure for handling the accounts in an IT company? Additionally, if possible, could someone share the format of an agreement with a Chartered Accountant and the scope of his work?

Thanks,
Veronica

Hi all,

Can someone please let me know how to manage the accounts independently without relying on the accountants? This is a small company, and we would prefer to avoid additional expenses on our end.

Thanks,
Veronica

Dear Veronica,

Even though it is a small company, there are various statutory requirements that need to be taken care of. Only an accountant can handle tasks such as taxes, excise, service tax, PF, etc. If these are not done correctly, there could be penalties and fines for non-compliance with statutory regulations.

Kind regards, [Your Name]

Hi Deadsoul,

Thank you for the response. Could you suggest how the company and CA should work together to ensure things run smoothly in the accounts section? One approach could be to have a staff member at our company maintain monthly records, which the CA can review at the end of each month. Are there any other options you can suggest?

Thanks,
Veronica

Veronica,

You have identified it correctly. Generally, a commerce graduate with 5-6 years of experience is hired and can administer the accounts well. Obviously, accounting varies based on the status of the business (proprietary, partnership, etc.). As long as the administrative assistant/accounts executive can take care of day-to-day tasks, a certified accountant would be able to handle the necessary work.

Realistically, doing it yourself is a pain and not worth the hassle when a person with the above experience can be hired, even part-time, to manage the job. Such professionals can be found in other small businesses (generally with revenue less than 20-30 lakhs) or assisting in the management of cooperative housing societies.

Hope this helps.