Income and expenditure are part and parcel of every business. Be it managing a grocery store to a car showroom to mandi business, accounting is an important part of the system. Without accounting, a business owner can’t track the inflow and outflow of funds in their business.
Paper-based bookkeeping has been the traditional form of business accounting but with changing times, trends have changed. Business owners have switched from traditional bookkeeping to accounting software.
A commission agent is usually the single point of contact for buyers and suppliers who trade in agricultural products. They have to do the majority of the paperwork. This includes inventory management, bill generation, keeping a track of payments as well as doing the daily functioning in mandis. Understanding the concerns of commission agents in mandi accounting and turning them into opportunities, Bijak which is India’s Number 1 Agritrading App, came up with a mandi accounting solution called ChargeERP.
ChargeERP is the fastest, easiest and most secure mandi accounting software that is designed to help commission agents efficiently manage their day-to-day activities. To give a complete accounting experience, we have added 32 pre-created accounts under 5 primary accounts – Assets, Liabilities, Capital, Expenses and Income.
Before we look at the 32 pre-made accounts, we need to understand the importance of the 5 categories:
- Assets: An asset is any resource with a financial value that is controlled by a company, country, or individual. These economic resources can be used at a company or owner’s discretion. Assets help in increasing your wealth. All your assets are listed in your company’s balance and are categorised as to how they are financed, i.e., whether through debt, equity, or owned outright.
- Capital: Capital is the money available to pay for day-to-day operations and to fund the growth of a business. It is typically cash or liquid assets being held or arranged for expenditures. Capital includes cash, cash equivalents, marketable securities, manufacturing equipment, production and storage facilities. The investment made in business is also considered capital.
- Expenses: Expense is the cost of operations borne by a company that happens during the process of generating revenue. These expenses are direct and indirect and are mentioned in the company’s balance sheet. Common expenses are payments made to suppliers, salary payments, rent, taxes and buying of equipment. Equipment depreciation is also considered an expense.
- Income: Income is revenue earned by a company in exchange for return for working, providing a product or service, investing capital or selling goods. The compensation received for labour services is also considered as income. Income is of two types: taxable – on which a person needs to pay taxes to the government and other is tax-exempted where a person need not pay any tax.
- Liabilities: Liabilities are something a person or company owes to another person or entity. These are generally obligations and debts of the company. These can also be a legal or regulatory risk. Liabilities include loans, accounts payable, mortgages, deferred revenues, bonds, warranties, and accrued expenses. These are mentioned in a company’s balance sheet also.
As we just explained the 5 primary accounts a mandi commission agent has to manage, we should also understand a bit about pre-made accounts. These accounts are pre-fixed accounts and cannot be changed. These are made considering most of the accounting terms and experiences that a business owner goes through while doing business. These 32 account types help them segregate their income, expenditure and investments. This not only helps them in keeping their balance sheet clean but also makes it simple while filing taxes. This also makes recording everyday transactions in the system easy and commission agents need not worry about keeping track of papers.
These 32 account types are further divided into 58 pre-created accounts or use case scenarios so that the commission agent can track every sale, purchase or investment made by them. These 58 pre-created accounts are not fixed and more can be added to them as and when required.
These impact all the modules of mandi accounting. Even a single miss of an entry can increase the efforts of the commission agent. These 32 pre-made accounts and 58 pre-created accounts not only make sure that everything is recorded but also that every rupee in the business is counted and there is accountability to it.
Another benefit of using this software is that it is cost-effective and does not require technical or accounting expertise. ChargeERP reduces the accounting time by 90% and the data is safe with end-to-end encryption. So if you wish to make your mandi accounting faster and more efficient, then you must try ChargeERP.
If you are looking forward to knowing more about ChargeERP software and the newly launched ChargeERP box, feel free to connect with us at +91 9311341199 or visit www.chargeerp.com. You can also request a free demo here: https://www.chargeerp.com/#demo. Also, you can follow us on Facebook or check out our latest videos on our YouTube channel.