Company Financial Statements
Preparation of Accounts and Financial Statements is mandatory for all companies as per the Companies Act, 2013. Private Limited Company, Limited Company and One Person Company are required to prepare proper financial statements. Further, the Financial Statements are required to be audited by a Chartered Accountant and filed along with Annual Return to Registrar of Companies. Any non-compliance leads to penal proceedings. Therefore, maintenance of proper company Financial Statements is mandatory. The below article will provide you with detailed procedure for maintaining Financial Statements and you can get in touch with volody.com for all your Financial Statements preparation and filing needs.
Company Accounts and Financial Statements
A company Financial Statements is record of all financial dealing of an organization and includes include books of account, vendor payment bills, customer invoices, employees payment details, bills and registers in electronic or paper form. A company is required to safe keep these records for the review by Statutory Auditors, Tax and other regulatory authorities.
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 accrual basis and follow double entry system of accounting. Accrual basis means all expenses and income to be booked in Financial Statements as and when its incurred and not when its paid.
Maintaining proper accounts and Financial Statements also give advantage to company in getting Ratings, Business Contracts, Raising funds (Debt / Equity) and Cash Flow Management.
Provisions of Companies Act, 2013 for maintaining accounts and Financial Statements
Companies (Account) Rules 2014 inter alia, provides 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 so as 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 which 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 as an electronic form, however, as we are in computer and mobile age most of the companies maintain their financials in electronic form using various accounting package. volody.com is your partner of choice to assist you in maintaining your accounts and prepare your financial records as per the requirement of Companies Act 2013. We are also equipped to prepare Business MIS as per your specific need and can provide you MIS on periodic basis so that you have everything available at any given point in time.
Safekeeping of Companies Financial Statements, annexure and supporting records
As per provision of The Companies Act, 2013 every company is required to safe-keep all the records of Financial statements including bills, vouchers, purchase orders, invoices etc in proper condition for 8 years.
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Legal implications for non-compliance
The Managing Director, the Whole-Time Director, Finance Manager, 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 upto 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 our services to maintain Financial Statements / Accounts for your business. We are tech enabled one stop destination for all services of CA, CS and Lawyers.
Please visit https://volodycom/ to avail the services.