In Sri Lanka, the accounting firms tend to have the professionals who perform various tasks. The services delivered are generally divided into three sections. They do the audit, the tax as well as the advisory. The accounting firms in Sri Lanka try to focus on the auditing, which is necessary to be done on a daily basis.
This ensures that the audit work done is very predominant in terms of finances. This brings the success of the company. It enforces tax to be done as the way of meeting the tax obligations. It helps in having the legal affairs minimizing the cases of the amount that is expected to be paid. On the side of advisory, it tends to cover more clients who will seek to have the performance improved.
This article tends to tends to focus on the accounting systems that are found in Sri Lanka. The issues to do with the bookkeeping, as well as journals, will be handled. The profit and loss account will also be clarified on the same.
The TAX and VAT payment calculation and the system will also be shown in this article. Accounting year and the average cost of accounting services, Advantages and disadvantages of accounting software and the basic questions, as well as answers, will be shown in this article.
The Accounting System of Sri Lanka
The accounting standards of Sri Lanka is comparatively better than other. The accounting systems involve how the business records are kept. You will have to put them into the accounting system with the transactions like the invoice and the money that will be spent on your business account. It also focuses on the bills that come from the supplier as well as the money that is spent to one’s business.
With the help of the overall Ledger module, you can have the design of the architecture that will now minimize the transactions by working on a given volume. It tends to provide the accounting function that shows how well the given interactive that has various modules, this will lead to the flexible manipulation of the different stocks. The expert who can offer the custom report can no succeed to have the best designer ever.
The following are the system features that you should know:
- The Charts of the account
- The opening balance
- The overall payments.
- The overall journal entry
- The bank deposits
- The bank depositors
- The check returns
- The creditors as well as debtor master info
Read Also : Accounting & Audit Firms in Sri Lanka
It deals with the records on the regular basis of a given company based on the financial transactions. Through bookkeeping, you will now understand the various principles that are done in accounts. Having the right bookkeeping, the firms can now afford to deal with the track of all the records that have the information which helps in many ways. This is the crucial area in doing your investment as per the financial decisions that you will have to make.
The bookkeepers should thus manage the financial data for all the companies. Failing to have the bookkeeper the company will not have the right financial position. Therefore, the accurate bookkeeping is needed for the external users. They will easily afford to access the correct information that can be accessed by all the investors of a given company.
For any beginner in accounting, will be required to make use of the basics in managing the investment. You opt to learn more about some strategies as well as the techniques that will show you some success. You require finding the reliable bookkeeping that is going to grant both the external and the internal users.
The significance of Bookkeeping
With the best bookkeeping, companies can have a reliable measure showing their performance. It tends to give the right information indicating the overall strategies that seek useful information. You can now succeed to spend the right about of money in your business.
You will also have to reconsider the bank when you are going to have some application process done. Once the application is made, you will then be required to focus on managing the approval in all that you seem to do. The credit cards that will be used should also be revealed in the best way. You might also be required to use the reconsideration line; here you have to mention the credit history.
You will thus, be expected to look at the credit history as you think of the final reconsideration. The various intentions about the company will thus, be looked since there is much that will now be done. The focus shall thus be shown as per what they will as well tend to expect.
Ledger and Journal
The double entry in the given systems that deal with bookkeeping shows transaction of a given account. There is a unique procedure for doing a recording of every financial transaction that is made within the given system. This particular process begins from the journal then comes the ledger followed by the trial balance and then ends with financial accounts.
The journals, as well as the ledger, are the main pillars that create the foundation of preparing the accounts. Therefore, the journal shows the book where the various types of transaction are documented instantly after they have been recorded. After this, they are classified and after that transferred to the account commonly referred to a ledger.
The journal forms the primary book of entry that records the transaction in a given chronological sequence. On the same note, the ledger shows the set of the various accounts that have the same transactions that relate to the person, the revenue, the asset as well as the liability that might have been tracked. Therefore, it necessary to make use of the journal also ledger for the success of the business. If this is considered you will finally achieve the best result.
Profit and Loss Accounts
The account whereby the annual net of the profit and loss of a given business is recorded is termed as the profit as well as loss account. You can determine the net profit as well as loss of given business by detecting the indirect expenditure from a gross profit via the profit as well as the loss account.
Hence, the profit and loss account begin with the outcome that is given by the trading account. Some particulars can be involved in having the profit as well as loss account to be well managed. The indirect expenditure, as well as the indirect revenues, usually are considered. The gross profit tends to be shown under the credit of both the profit also loss accounts while the total loss is normally shown on the debit side.
The indirect expenditure is also put on the debit side of the account. The indirect revenues also tend to be on the credit side. Once the totals of the credit tend to exceed the debt, then this shows the net profit, thus if the debt exceeds the credit side, it shows the net loss.
Therefore, both the net profit as well as loss of the accounting will be determined by the profit and at the same time the loss account. Finally, in most cases, this given account is prepared on the last day of the year so that it can be sued to determine the outcomes of the business.
Tax and VAT Payment Calculation and System
The VAT is the form of the consumption tax. If it is on the side of the buyer, the Tax comes from the purchase price. If it falls on the seller, the Tax is from the value added to the given product, the material or the service when it is based on the accounting point of view.
The main reason for the VAT is to have the tax revenue generated to the national government that is similar to the corporate tax.
Usually, every time the given product we manufactured, the value is generally added to that given product. On the same note, the tax is always there. Thus the VAT. The products are received from one company to the other and then taxed until the final product reaches the consumer.
The VAT, tend to benefit the black markets. They seem to thrive the bigger market as it may be. With the VAT, the firms will have the product taxed as it goes all the way to the consumers.
The calculation nature of the TAX and VAT is shown by the chain that develops when a product is manufactured and the steps it undergoes whole the tax is given out. You ought to understand the process as you plan to do the investment.
Accounting Year and The Average Cost of Accounting Services
The majority of the small business that begins at most of the time has some little skills on the business, the record keeping and at the same time the business finance. Due to this, there is a need to hire the accounting firm to help in offering such services. The services are useful in helping to lower the operating cost and thus, increasing the revenue. By picking the accounting firm, you need to ensure that the budget you have meets the financial needs.
You need to consider the size of the firm. It shows the various approaches you will be used to aid you in multiple ways. Firms seem to consider the different business that they do. Thus you can plan for the average services in terms of the cost you are going to incur.
The qualification of the accounting services should also be considered. It can perform the purpose of each plan you might have. The nature of the accounting services will define the success you will have in the firm. You can afford to manage all the successful business by seeking the right services from such a given firm.
Advantages and Disadvantages of Accounting Software
The Advantages of Accounting Software are stated below: –
- There is simple data entry- This is typically quite fast as well as straightforward and it is normally needed once.
- It is fast in doing the process- There are fewer cases of delays like in making the sales thus the invoicing is quite minimal at some point.
- The automation reports as well as the analysis- The instances of the profit as well as loss, the various debtors and the creditors seem to be involved. Customer satisfaction is also checked upon.
- The automation of the tasks- It consists of the calculation of the pay, thus producing the pay slips and thus helping in having the VAT calculated.
- The reduction of the errors- Like the transportation figure seems to be incorrect or rather incomplete depending on the various transaction that will be seen. The example is like the cases of integration with the other types of systems as the case of online banking.
- Finally, having to use the accounting software, it can aid you to save some time as well as money. It is capable of offering you valuable insight into the case where you are doing your business effectively. You need to make the right decision upon doing your business considering how effective the accounting software will be.
Disadvantages of Accounting Software
When you are looking for the accounting software to use in business, some problems, as well as disadvantages, are quite worthy to be considered. Here are some of the disadvantages that you ought to consider at any given time once you have the chance.
- The cost of doing the packaging however small it could be based on the other cost.
- The act of implementation- the manual accounts will generally be simple to set up thus more flexible when it deals with the computerized accounting. The accountant provider will now be changing such services.
- Support, you might as well require the maintenance yearly and the support that you might have the package.
- The specialized wants- The accounts with a given package, might now suite the various types of business. You will as well need the business specialists that will offer the routine packages. You will make use of the basic requirements that matter to you most.
- The accounting software will seek to have the steep learning by having the curve. It is going to be comfortable by having the ledger as well as the books that ought to keep the accounts simple.
Five Basic Questions and Answers from Own Content
Q1. Why are interested to be the accountant?
You need to answer the question thoughtfully by giving out instances of things, which, happened at some point in your life under the field of accounting. Here you need to grant the interviewer the background information about yourself and the reason for being interested in this field of accounting.
Q 2. Do you own any understanding of the accounting standards?
Despite you do not have any skills in this field, ensure you are well prepared before giving out the answer. Give your explanation based on the accounting standards and any other things you ought to focus on. Before you attend the interview, ensure that the research is done on the changes made under the standards as you get ready for them.
Q 3. How can you reduce the menace for mistakes in your labor?
As the accountant, you need to have the highest standard of excellence since even any small errors the can always bring about big financial issues. Here you need to check on the usefulness of the work in many times and then try to set up the systems for checks as well as he balances.
Q 4. Describe the time while you have helped decrease costs.
You will normally do this in a situation where you have never handled the accounting job. Give the descriptions of the situation where you did your previous work, the internship, and the coursework. This will show the manager who is employing you that you are ready for more tasks in the company. Show the manager that the priorities you have are quite aligned with the goals of the firm.
Q 5. Where can you perceive yourself in the next five years?
This question grants you the chance of seeing the foresight as well as the ambition that you have. The answer needs to be truthful then highlight the issues that you believe you can learn from the position that you hold in the organization. You opt to display the solid plan that you will have as your diminutive term career.
In summary, when you are dealing with the accounting services, you should know the deeper meaning. There is the need for understanding how to make use of the various services as it is known. You will need the approaches applied in accounting so that you can afford to fix some issues.
You might as well be required to deal with the act of keeping the profit also loss account in the professional ways. Learning how to do the TAX and VAT is very essential for the successful running of the accounting services.
The accounting software is also vital in managing your company. You need to apply it all the time when you are in for the success of your company. Do not fail to make use of the firm when you are in need of the best services ever. You should always have some governing questions that are based on the content of your own. You must find a way of practicing them and be read in a case you are attending the interview by the employing manager. You should ensure that all issues to do with the accounting firms are managed in the right way. Involve the experts to guide you on what you can do best. Now, you can check about how to start an export business in Sri Lanka as a foreigner.