A company that does not have bookkeeping is an organization without memory, without identity and without the minimum conditions to survive or plan its growth. It is why most of the accounting business is now hiring the professional Bookkeeping Services India online at affordable prices.
The information generated by accounting is useful and of interest to a wide range of users, who can be internal (administrators at all levels) or external (investors, tax authorities, financial institutions, etc.). What often occurs in companies is decision making based only on the intuition of managers, dispensing or underutilizing accounting information. Either due to ignorance of the real purpose of accounting. It is to provide information for decision making. Or, due to the restrictive and inappropriate use of data.
Proper financial statements are crucial
If the company faces financial difficulties, it has the right to request the benefit of the administrative and judicial recovery. However, one of the main requirements for obtaining this benefit is that the financial statements based on the bookkeeping, list of creditors and the daily book kept up to the date of the application, as well as a specially prepared balance sheet. In the case of bankruptcy so that it is not considered fraudulent, the company must comply with the same ritual regarding bankruptcy.
Bookkeeping to safeguard labour problems
About labour issues, the company that does not have bookkeeping is vulnerable to the need to formally prove compliance with labour registration in the daily book through judicial accounting expertise. Differences that may arise between the partners of a company may be the subject of an accounting expert’s examination to determine rights or responsibilities. The absence of bookkeeping will make the enlightening technical procedure unfeasible. The code of civil procedure provides that the accounting books fulfilled within the requirements required by law. Also, prove in favour of their author in the dispute between entrepreneurs.
Without bookkeeping accounting business are vulnerable
It is not that intuition should be dispensed within the decision-making process even more so that it is an essential component in this process. However, in crucial decisions, it cannot be the only relevant component. In other words, intuition will be better used in the decision-making process Accounting has long ceased to be just an instrument to serve the tax authorities to be an essential management tool, of course, when the company does bookkeeping.
The lack of concern with bookkeeping on the part of the entrepreneur or the administrator, especially the small and medium-sized company, brings with it a series of disadvantages that certainly jeopardize the profitability and survival of the business. By analyzing the benefits of bookkeeping, the losses of omission are clear.
Bookkeeping and social securities
The social security regulation provides that the inspection may examine the bookkeeping and any other company document to validate whether the accounting records the actual movement of the insured’s remuneration at his service. What the entrepreneur is unaware of is that failure to maintain regular bookkeeping can be classified as a crime of evading social security contributions, with a penalty of imprisonment of two to five years and a fine.
Tax legislation and bookkeeping
The financial law experts have expressed the importance of maintaining bookkeeping. They mentioned that the mandatory books of commercial and tax bookkeeping and the proof of the entries made must be kept until the prescription of the tax credits to which they refer occurs. Bookkeeping represents an advantage in the adoption of accounting.
Bookkeeping and accounting authorities
The maintenance of bookkeeping inside the norms of corporate and tax legislation proves in courtesy of the company. It happens mainly in the event of an infraction notice issued by particular tax officials. The entrepreneur needs information for decision-making and bookkeeping provides formal, scientific and universal data for greater financial and economic control to meet this need, as well as to facilitate access to credit lines. The decision to invest, to reduce costs, to modify a product line, or to perform other managerial acts must be based on technical data extracted from the bookkeeping records.
The lack of bookkeeping is one of the main difficulties in assessing the informal economy. Ignorance of the economic reality generates decisions wholly dissociated from the needs of companies and society in general. And it has caused irrecoverable losses to the country.
The complete bookkeeping is undoubtedly necessary for the accounting businesses of any size, as the main instrument of defence, control and management of its assets. You must talk to a bookkeeping professional and seek more information about the importance of bookkeeping. Bookkeeping is not a luxury, but a necessity for every entrepreneur who wants the prosperity of his business.
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