5 basic accounting disciplines for startups.. Credit to Yourstory

MyMuneemji did a guest blog for one of the renowned blogs for entrepreneurship called YourStory.in.
Below are the excerpts of the blog. http://
bit.ly/1gRSmws

6 accouting tips for smooth year end closing

March end seems to be very hectic for the accountants and tax professionals. Sometimes, we hear the businessman saying they are busy with the year end closing.

As startups or new entrepreneurs, you may be thinking what really needs to be done?

Here is a top 6 items to be sorted out his year end.

Provisions for Expenses

Prudent accounting thumb rule is debit expenses pertaining to a period eventhough the payments are due in next period. With this in mind all your electricity, telephone, rent, salaries, etc. till march needs to be booked even if due in next month. If actual bills are not received, prudent accounts estimate and Book those to show correct picture. There is a basic matching principle to be kept in mind wherein all expenses corresponding to income generated in that period need to be booked showing correct picture of profit or loss for that period.

Check your VAT and Service Tax Calculations
Whether all the invoices are booked and accounted before the calculation for the same is done.

Has the legitimate setoff been claimed on the purchase side. Many of us miss claiming this while it is available. This has a cash impact and hence very trivial. Taxes once paid are difficult to get refunded. The setoff gets missed in the small expenses like flight tickets, hotel bills, taxi bills, purchase of office equipments, AMC charges, and so on.

Bank Reconciliations
Completely verify your bank statement visa-a-vis the books of account. This will allow you know if there are any cheque which are received but not deposited in the Bank or cheques which are issued but not cleared. This may also throw surprises like cheque bounces not recovered, huge bank charges and so on. Very important to pass all the pending entries in the Bank before deciding on the available balance for payments at the year end.

TDS (Withholding Tax)
Here the expectation is from the payer of income to deduct taxes while doing so. Contractors, Professional Fees, Advertising, Renting broadly attract deductions before making the payments from 1% to 10%. It is necessary to do this even with respect to the provisions of expenses even though the payments would be done later in the next year. As a recipient of the services, please be careful that each and every provision for expense is Tax Deducted

Writeoff all the bad clients
You may have been raising invoices on clients all through out the year. Now is time to clean up. Check if there are any clients not going to settle these and reverse those. This will help you save unnecessary VAT, Service Tax and even the Income Tax. From the commercial point of view, you may have only the real receivable customer balances lying in the books to be recovered. Doing a bill to bill reconciliation is advised instead of account to account.

Check whether your Cash book tallies with that in Hand
It's common that the cash doesn't matches with the balance in hand. Matching the physical cash with that in the book throws up surprises like cash lying with some employees, vouchers not booked, payments made without supporting documents and even theft.

It's like taking "a stitch in time would save nine".  This would not only make the life smoother from taxation angle but also show correct picture for the financial as to what's your profile or loss, which are liabilities to be paid and assets to be collected.

People say that accounting doesn't add any value in the business but we do not tend to agree. It acts like a mirror to show how do you look. It's like a dashboard of the Car which doesn't help in efficiency or speed but it definitely measures the achieved one.

What if you fail to deduct TDS while making payment to foreign Nationals

CBDT guidelines for failure to deduct TDS while making payment to foreign nationals and companies u/s 195

Clarification has been sought by field officers as to whether the tax is to be deducted (under sub section (1) of section 195) on the whole sum being remitted to non-resident or only portion of representing the sum chargeable to tax, particularly if no application has been made (under subsection (2) of section 195 of the act) to determine the sum.

The matter has been examined in the board and accordingly, in exercise of powers vested under section 119 of the act, the board hereby directs that in case where the assesse fails to deduct tax under section 195 of the act, the assessing officer shall determine the appropriate proportion of the sum chargeable to tax as mentioned in subsection (1) of section 195 to ascertain tax liability on which deductor  shall be deemed to be assesse in default under section 201 of the act , and the appropriate proportion of the sum will depend on the facts and the circumstances of each case taking into account nature of remittances, income component therein or any other fact relevant to determine such appropriate proportion.

Startup Showcase – MyMuneemji

Delighted to announce that The Hub of Startups by Prajakt Raut of India Angels Publishes the MyMuneemji story.

http://bit.ly/1kzHo6L

Here’s the story of MyMuneemji– We offer shared services accounting, compliance and reporting services to Start-ups.

Catch them on – www.MyMuneemji.com 

In conversation with Mitesh Katira, Founder of MyMuneemji – 

• Tell us about the story of your startup - Why did you start this, how did you start, when did you startup?

Run a mid-sized Chartered Accountancy firm for the last ten years, having start ups and small businesses as clients. While working with these companies, we felt the need to be able to provide a reliable, efficient and cost effective solution to these client segments which need quality accounting, compliance and reporting support. We felt the need to service existing and prospective customers using IT as an enabler. MyMuneemji was formally launched 6 months back.

• How did the co founders come together?

Harshal and I know each other for the last 30 years, we went to school together. I joined a mid-sized Chartered Accountancy firm as a partner and helped them grow the practice and more importantly bring in a process orientation in the way we managed our audits. We increasingly started using IT tools which helped us deliver more at one third the time to our customers. Deepak Pasad joined the CA firm and was the man behind the executing process improvements and the IT tools.

My interaction with Venkat and Deepak started in the early to mid 2000 when we knew each other as family friends and the bond just got stronger when WealthTree was set up in late 2006. My firm used to work very closely with WealthTree on matters that required support on Accounting, Compliance, Audits, Tax filing for WealthTree’s customers. We started discussing ideas and ways to improve customer experience. MyMuneemji is the outcome

• What challenges did you face and how did you deal with them?

We wanted to leverage technology to deliver MyMuneemji to the customers. Venkat put me in touch with one of his colleagues who was the CTO of the company where Venkat worked. Sabyasachi came with excellent credentials having been CTO with large corporations and he helped us get through the initial bit by building version 1 of MyMuneemji.

Unfortunately, Sabyasachi had to go back to Kolkata due to personal reasons and we started driving the process ourselves.

• What is your aspiration for the venture?

We want start ups, pre – revenue ventures, Non Profit Organizations (NGO), co – operative societies and small businesses to try the MyMuneemji model. We are currently in the process of migrating all our existing customers (around 350 in number) from a manual mode to a ‘shared services’ online mode. We want to sign up with 5,000 new companies in the next 12 months.

• What did you learn from the journey so far?

We believe there is a huge gap on the demand and supply side. While entrepreneurs require high quality accounting support, the quality of accountants/ accounting support available is below par. In a majority of cases, it is not reliable and stable. MyMuneemji exists to bridge this gap. One of the biggest gains to come out so far has been our own evolution in thinking on looking at things ‘from a customer standpoint’. What works and what may not work. As an established CA firm, we never felt the need to think through this aspect. Viewing this from a customer standpoint and bringing the customer at the center has been our biggest learning.

Boot strapping is another aspect of a start up. We have constantly tried to keep our costs to a minimum while at the same time doing what it requires to be done to be able to get the service off the ground. Partnerships and tie ups with key business stakeholders has been the key. Leveraging on the impact of social media and getting the team to being the brand ambassadors of MyMuneemji were also huge learnings.

• If you had to start all over again, what would you do differently?

I am currently reading a book called “The Lean startup”. I was able to establish the correlation between “Build - measure – Learn”. I realize that we could have saved at least 50% of time and effort had I read this a year ago.

Free Due-date Reminders - a Christmas Gift from MyMuneemji

Christmas is the festival of Cakes, Candles and Carrels. Cake says "be sweet", Carrels say "Love one and all" and Candles say "Light up your mind with knowledge". 

We at MyMuneemji extend warm greetings for Christmas and a Happy New Year 2014.

At this juncture, it is exciting to share that more functional version of MyMuneemji is launched. This welcomes the New Year with added visibility and pro-activeness.

As Just try our Free Signup to start getting free sms and email alerts on before relevant tax filing due-dates and avoid any interest or penalties. Do let us know if there are any suggestions and feedback in this regard to make us better in helping you.

I am a fan of MyMuneemji.com!

I lead a busy, routine, ordinary life. I own and run a clothing store in Kotla’s commercial district and I am the sole earning member of my family of 4.  While I’d call myself a responsible family man, I have to confess that sometimes my duties weigh me down and I find myself ignoring the important yet demanding task of sorting out my finances and accounts. It is not that I am laid back or ignorant, it is just that at times I lack the willingness to make the effort to visit my accountant, to file returns, to source all the forms/data from different platforms given how time-consuming and tedious a task it all is.  

It is just for these reasons that I am super thankful for the services of MyMuneemji.com. From the comfort of my home I get expert accounting solutions + advice and under their skilled supervision I can file my tax returns without worrying about messing up the process in doing so. Additionally, it is with their help that I learnt about the best investments for me and under their guidance invested my money wisely. And yes, the returns on my investments so far have been great!

The best part about MyMuneemji.com is that the methods are simple and do not require much time. All I had to do was to sign-up, fill in basic details and I was ready to go. To get such an important job done without any hassles and to be able to do it at my convenience and on my time is what has made me a fan of MyMuneemji.com. So much so, that I have already recommended the site to all my friends and I am convincing them to sign-up ASAP.

To be honest, MyMuneemji.com has made it possible for me to fully concentrate on running my business as I leave the care of my finances in their trusted hands. And for this, I am always grateful! 

I have found a reliable partner in MyMuneemji.com

Everyone says if you start your business, you are your own boss.

At least, that’s what everyone told me. And they couldn’t have been more wrong!

After working a corporate job for 5 years when I finally decided to give in my papers and to turn my dreams into reality, I knew I had to surround myself with people and partners who would help me realise my dream. I was aware that the ground realities, responsibilities, duties, expectations would soon outshine the glamour of owning and running a business. Acute planning on my end led me to MyMuneemji.com and after going through their services I immediately decided to allow MyMuneemji.com to handle my accounts/finances.

To tell you the truth, given that I have only just started my business, I need to focus all my energies on it. This constant attention and dedication to furthering my business leaves me with very little time to sort my accounts and/or to visit a CA regularly. This is where MyMuneemji.com enters the picture. A simple registration process later, MyMuneemji.com was on my side, looking into my accounts and managing them. Experts handle my money, remind me about my tax filings, miscellaneous processes and even recommend the best investment options for me. The fact that I can focus on my business 100% and that I have a trusted and reliable partner look into my money has been a blessing.

If you are about to set-up your business and are looking at a trust-worthy partner to handle your accounts, then MyMuneemji.com is your best bet. Trust me!

--- Adip Shah, Entrepreneur