{"id":23677,"date":"2021-01-08T12:23:11","date_gmt":"2021-01-08T06:53:11","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=23677"},"modified":"2021-01-08T12:23:14","modified_gmt":"2021-01-08T06:53:14","slug":"what-role-does-online-business-accounting-play-for-a-private-limited-company","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/what-role-does-online-business-accounting-play-for-a-private-limited-company\/","title":{"rendered":"What Role Does Online Business Accounting Play For A Private Limited Company?"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Online business accounting is the systematic process of\nrecording, analyzing, and interpreting financial transactions. It is the\nresponsibility of every small scale and large scale business to furnish their\naccounting records to the Income Tax Department. <\/p>\n\n\n\n<p>Usually, start-ups ignore the accounting at their initial\ndays, and after a few years, they have to face problems. To avoid problems like\nraids and fines, it is always good to maintain your financial records and\nfurnish details to the government agencies. The entrepreneurs adopt the online\nbusiness accounting process to maintain the books of the accounts. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/what-role-does-online-business-accounting-play-for-a-private-limited-company\/#Types_of_Accounting\" >Types of\nAccounting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/what-role-does-online-business-accounting-play-for-a-private-limited-company\/#Why_is_Online_Business_Accounting_Important_for_a_Private_Limited_Company\" >Why is Online Business\nAccounting Important for a Private Limited Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/what-role-does-online-business-accounting-play-for-a-private-limited-company\/#How_to_Maintain_Books_of_Online_Business_Accounting_for_a_Private_Limited_Company\" >How to Maintain Books of Online Business Accounting for\na Private Limited Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/what-role-does-online-business-accounting-play-for-a-private-limited-company\/#Types_of_Online_Business_Accounting\" >Types of Online Business Accounting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/what-role-does-online-business-accounting-play-for-a-private-limited-company\/#Benefits_of_Accounting_Services_to_a_Business\" >Benefits\nof Accounting Services to a Business<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/what-role-does-online-business-accounting-play-for-a-private-limited-company\/#Is_it_Mandatory_By-Law_to_Maintain_Record_of_all_Financial_Transactions\" >Is it Mandatory By-Law to\nMaintain Record of all Financial Transactions?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/what-role-does-online-business-accounting-play-for-a-private-limited-company\/#Concluding_Remark\" >Concluding Remark<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Types_of_Accounting\"><\/span>Types of\nAccounting<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There are three\ntypes of accounting that can help any entity to track income records in the\nmost efficient way.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Cost Accounting<\/h3>\n\n\n\n<p>Cost accounting\nis a form of managerial accounting that assures the entity to have a track\nrecord of the actual costs associated with manufacturing of a product or\nproviding a service within the supply chain of business activities.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Managerial Accounting<\/h3>\n\n\n\n<p>Managerial\naccounting is the practice of recognizing, measuring, interpreting, analyzing\nand interpreting financial information to entrepreneurs in pursuit of an entity\ngoal. The main objective of managerial accounting is to help the company\ninternally in making well-informed business decisions to users.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Finance Accounting<\/h3>\n\n\n\n<p>Financial\naccounting is the process of maintaining a business record through its\nfinancial statements such as income statement, balance sheet, cash flow\nstatement and statement of retained earnings.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_is_Online_Business_Accounting_Important_for_a_Private_Limited_Company\"><\/span>Why is Online Business\nAccounting Important for a Private Limited Company? <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Online business accounting plays a vital role in small business entrepreneurs. As it helps the proprietors, managers, investors, and other stakeholders in the business evaluate the financial performance of the business. Online business accounting gives essential information regarding cost and earnings, profit and loss, liabilities, and assets for decision making, planning, and controlling business processes.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_Maintain_Books_of_Online_Business_Accounting_for_a_Private_Limited_Company\"><\/span>How to Maintain Books of Online Business Accounting for\na Private Limited Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>To make account books easy, accurate, and secure, entrepreneurs can maintain their financial record through electronic mode. Even the <strong>Companies Act 2013<\/strong><sup><a href=\"http:\/\/www.mca.gov.in\/MinistryV2\/companiesact2013.html\"><strong>[1]<\/strong><\/a><\/sup>, under section 128, permits maintenance of electronic books of account. <\/p>\n\n\n\n<p>There are many software\u2019s available to maintain books of account through online business accounting at an affordable price. Each transaction must be recorded under applicable accounting standards and principles while maintaining accounting books through online business accounting. These principles\/standards ensure accuracy and meet all requirements of industries and legislation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Types_of_Online_Business_Accounting\"><\/span>Types of Online Business Accounting <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The types of online business accounting are as follows;<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/01\/Types-of-Online-Business-Accounting.png\" alt=\"Types of Online Business Accounting\" class=\"wp-image-23678\" width=\"527\" height=\"339\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/01\/Types-of-Online-Business-Accounting.png 985w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/01\/Types-of-Online-Business-Accounting-300x193.png 300w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/01\/Types-of-Online-Business-Accounting-768x495.png 768w\" sizes=\"(max-width: 527px) 100vw, 527px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Double Entry Accounting System (DEAS)<\/h3>\n\n\n\n<p>DEAS acts as an error detection system. According to the double-entry accounting system, each transaction has two parts, so it affects two ledger accounts while recording transactions. It includes a debit entry in one account and a credit entry in another account. If the sum of debits does not equal the corresponding sum of credits, it means an error has occurred. It also makes sure the accuracy of the recording of transactions.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Accrual Basis Accounting<\/h3>\n\n\n\n<p>The accrual basis of accounting is considered as standard accounting practice globally. It gives a more accurate measure of a company&#8217;s profitability, as it covers all revenues and expenses irrespective of cash collections and expenditures. For instance, an expense that has been done in a period for which no invoice has been generated at the end of that period is considered an accrued expense and is still recognized.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Benefits_of_Accounting_Services_to_a_Business\"><\/span>Benefits\nof Accounting Services to a Business<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/01\/Benefits-of-Accounting-Services-to-a-Business.png\" alt=\"Benefits of Accounting Services\" class=\"wp-image-23680\" width=\"515\" height=\"357\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/01\/Benefits-of-Accounting-Services-to-a-Business.png 985w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/01\/Benefits-of-Accounting-Services-to-a-Business-300x208.png 300w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/01\/Benefits-of-Accounting-Services-to-a-Business-768x533.png 768w\" sizes=\"(max-width: 515px) 100vw, 515px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Budget Planning<\/h3>\n\n\n\n<p>Budget planning helps the entrepreneurs effectively to control the <a href=\"https:\/\/corpbiz.io\/company-registration\"><strong>private limited company&#8217;s<\/strong><\/a> income and expenditure while monitoring the business&#8217;s managerial policies and goals. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Evaluating the Performance of the\nBusiness<\/h3>\n\n\n\n<p>It helps to measure the business&#8217;s performance concerning key metrics\nlike net profit, sales growth, etc.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Managing Cash Flows<\/h3>\n\n\n\n<p>Regular tracking of funds coming into the business helps in predicting\ntrends, payments to employees and suppliers, covering loans, etc.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Financial Information to\nInvestors and Stakeholders<\/h3>\n\n\n\n<p>The investor will get better business health ideas to understand its solvency,\ncreditworthiness, liquidly, stocks, and bond issuers.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is_it_Mandatory_By-Law_to_Maintain_Record_of_all_Financial_Transactions\"><\/span>Is it Mandatory By-Law to\nMaintain Record of all Financial Transactions?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In India, the companies&#8217; Registrar demands a strict record of income tax\npayments at the end of the financial year, so automatically; it becomes the\ncompany&#8217;s liability to maintain its book of accounts.<\/p>\n\n\n\n<ul><li>The Income tax act needs mandatory audit in\ncertain Expertise\u2019s, and that is possible only when books have been maintained\nas per the law.<\/li><li>The Companies Act regulates companies, and as\nper the Act, every company needs to file an annual return with the company\nregistrar.&nbsp; It is compulsory even if\nthere are losses in a business or no income has been earned in a financial\nyear.<\/li><li>It helps the entrepreneurs to maintain track\nrecords of their expenses, monitor their revenues, and make informed financial\ndecisions.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Concluding_Remark\"><\/span>Concluding Remark<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Online business accounting may seem a burden at the initial phase of business. Still, it is important to manage the daily functions, which keeps the business running successfully. Without online business accounting, there is the fear of hitting a cash flow crisis, wasting money and other financial information issues, and leading to a business&#8217;s closure.  In this competitive market, an accurate book of account is necessary for every small business to sustain itself. Kindly associate with the <a href=\"https:\/\/corpbiz.io\/\"><strong>Corpbiz<\/strong><\/a> to know more about the Online Business Accounting for your business.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/norms-to-register-company-in-india\/\">\nAn Outline on the Norms to Register Company in India\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Online business accounting is the systematic process of recording, analyzing, and interpreting financial transactions. It is the responsibility of every small scale and large scale business to furnish their accounting records to the Income Tax Department. Usually, start-ups ignore the accounting at their initial days, and after a few years, they have to face problems. [&hellip;]<\/p>\n","protected":false},"author":32,"featured_media":23683,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[1404],"acf":{"service_id":"1"},"authorName":"Komal Singh","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/processed.jpeg","authorDescription":"Komal Singh is a Legal scholar, having diverse experience in scripting research papers, articles &amp; dissertations, which serves her main interest &amp; competent in drafting legal documents. She has polished her skills in dealing with the matter related to consumer affairs and now building intelligible Legal Content for Corpbiz.","postViews":3297,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/23677"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/32"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=23677"}],"version-history":[{"count":13,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/23677\/revisions"}],"predecessor-version":[{"id":23693,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/23677\/revisions\/23693"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/23683"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=23677"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=23677"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=23677"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}