The True Accounting Problem!

Being a Small Business ourself, we could relate to our clients problems of Bookkeeping and Accounting, however my endeavour to findout the real problem with a few clients resulted in a few funny conversations:

This is how it started with the prospective client:

Robin: ”œ We are developing an online accounting software for small businesses like yours…. The software is a very easy…”

Client: interrupts… ” No Thanks! We have Tally! ”

Robin: Ok.. We have Tally too…but tell me how many times last year have you closed your accounts and filed your VAT/ST returns well ahead of time?

Client: err..well, Our accountant never closed accounts on time. He is new to the jobs and hasn”™t got hold of accounting still.

Robin: Oh. Well, so was your previous accountant able to do it on time?

Client: hmm…no he actually quit before he learnt….He was lazy and was absent 10 days a month.

Robin: Oh. Ok. But tell me… If your accounts are not closed on time, How else would you get the required Business Intelligence to make your decisions?

Client: I maintain an excel myself, I can”™t trust the authenticity of the data provided by the accountant! And actually Im too busy to review any intelligence reports

Then, I had an interaction with the accountant:

Robin: ”œ Hi. I heard that you haven”™t been able to close your accounts on time. Is there a way I can help you?”

Accountant: Not only you, even god can”™t help closing accounts in this company.

Robin: Why so?

Accountant: The Partners have never given their bills and data on time, Never. I do some post mortem accounting.

Robin: Oh….so will we not have supporting bills for all expenses?

Accountant: Actually the earlier accountant has misplaced most of the bills.

Robin: Oops..so how will you handle a Tax Scrutiny?

Accounting: Ha Ha..Baba..The Commercial Tax Officer is my wifes, brothers, …… a little money here and there, I can handle any scrutiny.

I”™m sure most of us, including me could relate this to my business, Can you guys tell me what”™s the real problem here? Why have most small businesses found it difficult to complete accounts on time?

1. Is it because Tally is too complicated to use it ourselves, so we depend on a professional accountant to do it?
2. Is it because we misplace most bills, so it is difficult to provide the Accountant with all the bills and data to prepare accounts?
3. Is it because, we look at account keeping as a mere Tax Compliance responsibility and choose to have our information in excel?
4. Is it because we use multiple application for Invoicing, Payroll Management, Inventory, Tax Return Preparation etc, that we see accounting as a mere duplication of entries?
5. Any Other reason?

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