Company Accounts And Financial Statements

Preparation of Accounts and Financial Statements is mandatory for all companies as per the Companies Act, 2013. Private Limited Companies,

Company Accounts And Financial Statements

Preparation of Accounts and Financial Statements is mandatory for all companies as per the Companies Act, 2013. Private Limited Companies, Limited Companies, and One Person Companies are required to prepare proper financial statements. Further, the Financial Statements are required to be audited by a Chartered Accountant and filed along with the Annual Return to the Registrar of Companies. Any non-compliance leads to penal proceedings. Therefore, the maintenance of proper company Financial Statements is mandatory. The below article will provide you with detailed procedures for maintaining Financial Statements and you can get in touch with Volody for all your Financial Statements preparation and filing needs.

Company Accounts and Financial Statements

A company Financial Statement is a record of all financial dealings of an organization and includes books of account, vendor payment bills, customer invoices, employees payment details, bills, and registers in electronic or paper form. A company is required to safely keep these records for review by Statutory Auditors, Tax, and other regulatory authorities.

The company’s Financial Statements are required to give a true and fair view of the state of affairs of the company and the company is required to maintain all detailed invoices, bills, and vouchers supporting each and every transaction.

The Company is required to maintain Accounts on an accrual basis and follow a double-entry system of accounting. Accrual basis means all expenses and income to be booked in Financial Statements as and when it is incurred and not when it is paid.

Maintaining proper accounts and Financial Statements also gives an advantage to the company in getting Ratings, Business Contracts, Raising funds (Debt / Equity), and Cash Flow Management.

Provisions of the Companies Act, 2013 for maintaining accounts and Financial Statements

Companies (Account) Rules 2014 inter alia, provides a manner of keeping accounts in electronic mode. It reads as;

Manner of books of account to be kept in electronic mode.-

(1) The books of account and other relevant books and papers maintained in electronic mode shall remain accessible in India to be usable for subsequent reference.

(2) The books of account and other relevant books and papers referred to in sub-rule (1) shall be retained completely in the format in which they were originally generated, sent, or received, or in a format that shall present accurately the information generated, sent or received and the information contained in the electronic records shall remain complete and unaltered.

(3) The information received from branch offices shall not be altered and shall be kept in a manner where it shall depict what was originally received from the branches.

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Preparation of Company Financial Statements and Accounts

The Company`s Financial Statements can be maintained in paper form or electronic form, however, as we are in the computer and mobile age most companies maintain their financials in electronic form using various accounting packages. volody.com  is your partner of choice to assist you in maintaining your accounts and preparing your financial records as per the requirements of the Companies Act 2013. We are also equipped to prepare Business MIS as per your specific need and can provide you MIS periodically so that you have everything available at any given point in time.

Safekeeping of Companies Financial Statements, annexure, and supporting records

As per the provision of The Companies Act, 2013 every company is required to keep all the records of Financial statements including bills, vouchers, purchase orders, invoices, etc in proper condition for  8 years.

Legal implications for non-compliance

The Managing Director, the Whole-Time Director, the Finance Manager, the Chief Financial Officer, or any other person of a company nominated by the Board of Directors is responsible for ensuring that the Financial Statements / Accounts and supporting records are maintained and kept in the custody of the Company.

In case, the Company does not maintain proper Financial Statement / Accounts, imprisonment or penalty of up to Rs.5 lakh can be levied under the Companies Act 2013. In addition this lead to reputational risk to the Company and the effect fund raising capabilities of the Company. Thus, it is important to maintain proper Financial Statements / Accounts of a company properly.

Please visit volody.com for various packages suitable to you to avail of our services to maintain Financial Statements / Accounts for your business. We are a tech-enabled one-stop destination for all services of CA, CS, and Lawyers.

Please visit https://www.volody.com/ to avail the services.

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