Small and Medium Enterprises are the stepping-stone for sustainable development of the economies towards industrialization. In Pakistan, the SME sector has a share of over 30% in GDP and employs approximately 78% of the non-agricultural labor force thus the making this sector a major driver of the country's economy. Best business practices steer businesses towards competitiveness, which is a key to survive in the seamless markets of globalization culture. Conversely, it is identified that poor business practices, particularly lack of documentation, are an obstacle in SME's growth and the development.
The small and Medium Enterprise sector is considered to be the backbone of a developing economy with its unique capability for employment creation, poverty alleviation, innovation, and competitiveness. Owing to emphasis by the Government together with stakeholders' awareness, adequate support efforts have been directed towards SME development through the creation of a business-friendly environment as well as market development for financial and non-financial services.
SMEDA's effort in the form of a publication, Accounting Handbook for Small and Medium Businesses is an important step towards improving business culture and prevailing accounting and bookkeeping practices in the sector.
Accounting Hand-Book for Small & Medium Businesses is a practical guide for SMEs for developing their accounting and bookkeeping capabilities. This handbook discusses a typical SME business cycle and accounting transactions related to it in a hands-on manner. The handbook is comprehensive and self-explanatory to facilitate a typical SME in recording accounting activities. Accounting processes and control bearing relevance to the operating size of an SME business are discussed in a user-friendly manner. Accounting record preparation is also elaborated in a simplified way, along with examples and templates
Who is it for?
Accounting / Finance managers / Owners of SME businesses with a non-accounting background, currently managing business bookkeeping and accounting in an informal manner
· Accounting service providers seeking to provide accounting and bookkeeping services designed exclusively for their SME business clients
Contact your nearest SMEDA office to buy this book!
LIST OF SUBJECTS COVERED IN ACCOUNTING HANDBOOK FOR SMALL & MEDIUM BUSINESSES
1. Use accounting to help your business grow
2. Useful facts to improve understanding of accounting
3. Where are accounting transactions recorded?
4. Want to start a business? Inject capital!
5. Purchases & payables - improve your margins!
6. Sales & receivables - sell more and generate cash
7. Plant & machinery - key in generating profits
8. Leasing! An attractive option for financing capital investments
9. Inventory valuation - know your costs to sell at a profit!
10. Manufacturing! Do you know how much your products cost?
11. Financing! An alternative to capital injection
12. Salaries & expenses -controllable costs to improve profitability
13. How should a business account for transactions in foreign currencies?
14. Accounting is done - now we need to prepare accounts
15. Ratio analysis is a useful tool to improve decision making
16. Income tax - how do I know what needs to be done?
17. Sales tax - an easy to understand reference guide
TABLE OF ANNEXURES:
1. Balance Sheet
2. Profit & Loss Account
3. Cash Flow Statement
4. Cash Payment / Bank Payment Voucher
5. Journal Voucher
6. Tax Challan
7. Quarterly Statement
8. Salary Certificate
9. Form IT-A
10. Form IT-B
11. Tax Payment Challan
12. Application for Refund of Tax
13. ST 1
14. ST 2
15. ST 3
16. Sales Tax Return
17. Sales Tax Return for Distributors & Wholesalers
18. Sales Tax Return for Retailers
19. Sales Tax Return for Commercial Importers
20. Sales Tax Return for Jewelers
21. Advance Payment Receipt
22. Nil Return
23. Documents to be attached along with Returns of Traders
TABLE OF CONTENTS
Chapter 1
1. What is Accounting?
2. What are Accounts?
3. Why do Businesses Need Accounts?
4. Use Accounting to your Advantage
Chapter 2
5. Basis of Accounting
6. The Double Entry System of Accounting
7. Journal Entries
8. Accounting Assumptions
9. Accounting Regulatory Bodies
Chapter 3
10. Double Entry & T Accounts – A Quick Recap
11. Books of Accounts
12. Books of Original Entry
13. Sales Day Book & Sales Ledger
14. Purchase Day Book & Purchase Ledger
15. Cash & Bank Book
16. Inventory Ledger
17. General Ledger
18. Vouchers
Chapter 4
20. Books of Accounts – A Quick Recap
21. What is Capital?
22. What is Equity?
23. How much Capital should be Injected?
24. How Frequently should Capital be Injected?
25. Is Capital always in Cash?
26. Deciding on a Profit Share
27. Businesses are Separate from Owners
28. Capital for Companies
Chapter 5
29. Books of Accounts – A Quick Recap
30. What are Purchases?
31. Why is it Important to Record Purchases?
32. Purchase Cycle
33. Other Situations in Purchase Cycle
34. Cash Flow & Cost Management Strategies – Some Tips
Chapter 6
35. Books of Accounts – A Quick Recap
36. Why is it Important to Record Sales?
37. How should Sales be Recorded?
38. Know your Selling Price
39. My Customer has not paid me – What do I do?
40. Convert your Receivables into Cash
41. Some Suggestions on Improving Liquidity
Chapter 7
42. Books of Accounts - A Quick Recap
43. What are Fixed Assets?
44. Tangible & Intangible Assets
45. What is the Cost of Fixed Assets?
46. Understanding the Terminology
47. What is Depreciation?
48. Depreciation is not always Charged
49. My Fixed Assets are worth more now!
50. What happens when a Fixed Asset is Sold or Lost?
51. Using Fixed Assets to your Benefit!
Chapter 8
52. Books of Accounts – A Quick Recap
53. What is Lease?
54. Commonly Used Terms
55. Types of Leases
56. Why should a Business Lease?
57. How are Leases Recorded?
58. Using Leasing to your Advantage
Chapter 9
59. Books of Accounts - A Quick Recap
60. What is Inventory?
61. Why Have Different Valuation Techniques?
62. What is the Cost of Inventory?
63. How is Inventory Valued?
64. Is Inventory Always Shown at Cost?
65. How can Inventory Costs be Reduced?
Chapter 10
66. Books of Accounts – A Quick Recap
67. What type of Inventory is Manufactured?
68. Why is Costing Important for a Manufacturer?
69. What is the Cost of Manufactured Inventory?
70. Costing Terminology Made Easy!
71. What is a Typical Manufacturing Cycle?
72. How are Costs Classified?
73. How is the Cost of Manufactured Inventory Calculated?
74. What is Accounting for Work in Process?
75. How should I Decide which Product to Manufacture?
76. How can these Costing Methods Help in Decision Making?
77. How much do I have to Produce before I Start Making Profits?
78. Are there Other Costing Methods MORE SUITABLE TO MY
BUSINESS CIRCUMSTANCES?
Chapter 11
79. Books of Accounts - A Quick Recap
80. What are the Sources of Bank Financing?
81. What Types of Financing are Available to Businesses?
82. How are Payments Made to the Financing Bank?
83. Using Long Term Financing to Your Advantage
84. Some Facts to Keep in Mind!
Chapter 12
85. Books of Accounts – A Quick Recap
86. Employees are Important for a Business
87. What Are the Different Types of Payroll Costs?
88. What is Included within Salaries?
89 . Maintaining Employee Records
90. How is Salary Cost Recorded?
91. When & How is the Tax Department Informed?
92. What Responsibilities are Placed on Businesses?
93. What are Overheads?
94. Why are Expenses Accrued?
95. What are Prepaid Expenses?
Chapter 13
96. Books Of Accounts - A Quick Recap
97. What are Foreign Currency Transactions?
98. Understanding the Terminology
99. What are the Different Types of Foreign Exchange Rates?
100. What is the Accounting for Foreign Currencies?
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