It is almost typical for startups to have a limited budget initially unless they are heavily funded by generous investors with deep pockets. This is why it is reasonable for them to hesitate to hire a professional chartered accountant in India before they have started to generate steady revenue.
While it may sound like a good business decision to so many startup owners, as a way to save money and obligations as an employer, MPVD & Associates, a leading CA company in Kolkata, begs to differ. Handling one’s books and accounts could be a big risk to start with. This article explores the reasons and outlines the best practices.
Opportunities and Challenges of Accounting and Bookkeeping for Startups in India
Startups mean a lot for India because they bring ground-up development to the socio-economic block of the country with their innovative approaches to improve and optimise processes or systems. Unique business models typically feature more potential to generate income and contribute to creating wealth and overseas relationships for India. The reasons to invest in professional CA services for startups in India are not about paying taxes on time but also about leveraging the best opportunities diligently.
The Income Tax Department of India (ITD) offers a wide range of startup opportunities and tax benefits, such as the Startup India Initiative or the Startup India Action Plan, where the country heavily supports entrepreneurship and independent income and welcomes innovative and disruptive technologies with opportunities in taxes, funding and leadership.
But there is an anchor to it. Accounts and bookkeeping. To leverage most of the opportunities, startups need to prepare for the best. Accounting can pose so many challenges for startups:
- Cash flow management: when there is more to invest in and less to get in returns
- Small businesses are sometimes the hardest to streamline financially without an expert
- Proper documentation and formatting of important papers and handling complex paperwork diligently
- Obtaining realistic financial roadmaps to gain the positive attention of prospective lenders and investors.
- Uncertainty, inexperience in handling books and the typical small needs can all be challenging.
If you relate to all these episodes and accept them as real challenges and time-consuming no-growth tasks that take away your production time to grow your business and get more clients, then it is about time you came closer to the best practices of using expert CA services in India.
Best Practices for Startups to Initiate A Predictable Financial Roadmap
The best practices for accounting and bookkeeping for startups in India are to determine their priorities with a calculation of time and money. While managing one’s accounts gets reasonable with saving money, the time spent on it can be an expenditure too. Accounts and bookkeeping mean all the following tasks for startups:
- Curtailing unnecessary costs
- Tax planning and streamlining process early on
- Create financial plans to leverage opportunities and avoid the circumstances of paying extra interest, penalties, or hidden costs.
- Evaluating the fair value of liabilities and assets
- Simplifying technical jargon
- Overview of working capital issues
Consulting a professional accountant makes a big difference and paves the way for a more organised, knowledgeable and predictable business growth model.
Why It’s More Effective for Startups to Outsource Accounting and Tax Services Rather Than Insource
The best aspect of outsourcing for a startup is to gain knowledge and save themselves from making expensive mistakes. Because startups have limited budgets, they need to place their money on growth, not savings. Outsourcing to MPVD & Associates, one of the top 10 CA firms in Kolkata, is more functional for startups since we come with a bigger spectrum.
- You can use our sophisticated accounting software over the cloud and have more control over your finances.
- Have first-hand access to Government initiatives and get advice on how to be eligible for them
- Apply to different initiatives and schemes with the right approach
- Maintain accurate financial records to enhance investor confidence.
Hiring full-time employees is a liability that is hard to undo. The company has to pay the same amount of money and churn out increments, sick pay, and many other obligations that might go over budget based on the unpredictability of initial returns.
This is why it is more worthwhile to opt for outsourcing accounting and tax services in Kolkata, India. With professional CAs available on the call, startups can leverage the most cost-effective solution of having top-tier expertise on a “pay as you go” model, paying only for the service as needed. No extras. No losses. Build your startup with a solid financial roadmap.