Payroll & Accounting can be a challenging task for any entrepreneur, especially if you are a non-finance / non-commerce background. Keeping books in order is crucial to avoid fiscal problems and inciting penalties. As the business grows, your accounts grow more complicated. In this blog, we’ll present 5 crucial Payroll & Accounting Services any start-ups should not avoid.
1. Issuing Salary to Employees
Most start-ups / SMEs do not follow the standard procedure for processing the salary of their employees. And more worrisome part is managing salary payments in excel sheets. The healthiest aspect for a start-up would be to implement Payroll Management System and bring automation in the process. Small business owners can even operate such systems on their own. Once employee strength tend to grow they can easily outsource the work to 3rd party vendors.
2. Monthly Compliances
It is a general guideline that as a company crosses employee strength of 20, monthly compliances and statutory deductions come into the picture. Start-ups / SME owners are required to take such norms seriously to avoid any penalty from the government. Terms like Employee Provident Fund (EPF), Professional Tax (PT) and Employees’ State Insurance (ESI) are the first three compliances to start with. For non-commerce background entrepreneurs these terms might be tough to understand. But you can take help of any 3rd party vendors to handle these compliances for your organisation.
3. Calculation & Payment of Taxes
The term TDS (Tax Deducted at Source) comes into picture, the moment a business pays salary to even a single employee. Imagine how tedious and time consuming it would be if start-ups / SMEs are doing it for 10-20 employees on manual excel sheets. On top of it, the terms like VAT (Value Added Tax) & Service Tax depends on the amount of revenue a company makes. Entrepreneurs could be in soup if tax paid is not what they were supposed to pay the government. To avoid such tricky situations, take help of online automation tools or 3rd party service providers who understand these terms better.
4. Investment Advice to Employees for avoiding access taxation
It is the responsibility of employers to deduct Income Tax while they are paying salaries to the employees (based on the tax slabs defined by Government of India). And getting the taxation right is most essential. Extra deducted tax could hit the paycheck figures which is not a favorable moral booster. To help employees save on taxes, government has given various options to do investment of money. House Rent, PPF (Public Provident Fund), Travel & Medical allowances to name a few basic ones. Take help of Payroll Service providers who can advice your employees where and how much to invest to reap maximum benefits.
5. Accounting & Bookkeeping
If you are still wondering Why Accounting & Bookkeeping is crucial for Start-ups / SMEs; then you are pulling down your own business from getting any Financial stability. In a lehman term, Accounting & Bookkeeping is all about getting your Money-in & Money-out correct to even a single rupee. This service is majorly a transactional activity which involves keeping record of receipts, invoices & payments; and keeping the ledgers updated.
When it comes to running a business, it is always advisable to focus the key competency areas of the business and have team working on those areas. In this competitive era of running a start-up / SME; outsourcing non-core business functions has turned out to be a boon for many entrepreneurs. FastCollab can be your crucial partner when it comes to Outsourcing Payroll & Accounting services; because growth in money is crucial for a business to succeed.