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What does the CA say?

Maintain Chart of Accounts right from the early stage of the venture.

 

Is Chart of Accounts really important?

A company’s Chart of Accounts is a view of all Asset, Liability, Equity, Revenue, and Expense accounts included in the company’s General Ledger. The number of accounts included in the chart of accounts varies depending on the size of the company. Designing a COA is one of the first tasks that have to be performed when setting up a budgeting and its associated accounting and financial reporting systems.

 

The Chart of Accounts (COA) although appears to be just concerned with classifying and recording financial transactions, is critical for effective budget management, including tracking and reporting on budget execution.  A mistake in designing the Chart of Accounts could have a long-lasting impact on the ability of the system to provide required financial information for key decisions. Remember, COA is also the hub of any computerized accounting and reporting system.

 

How does maintaining Chart of Accounts benefit the firm?

  • The COA specifies how the financial transactions are recorded in a series of accounts that are required to be maintained to support the needs of various users/stakeholders.
  • The COA provides a coding structure for the classification and recording of relevant financial information within the financial management and reporting system.
  • The COA provides room for planning, controlling and reporting of budgetary allocations as well as internal management needs of budget units and/or cost centers.

 

How is Chart of Accounts designed?

COA can be designed by anyone who is aware of the nuances of accounting, but the difference that an experienced professional brings in is productivity and quality. It is a known fact that startups, most of them, lack the management bandwidth and expertise to carry out COA related works. 

The development and implementation of a COA should involve the following key steps:

  • The COA can only be properly configured after a comprehensive business needs analysis has been undertaken
  • The COA segments and the hierarchical levels within each segment should be defined.
  • The COA and its segments should use basic logic and account definition
  • Creating a global or a unified COA establishes a foundation for consistency in terminology and serves to eliminate redundant accounts
  • Define clear institutional, legal and procedural frameworks to prevent the COA structure from becoming fragmented.
  • For the COA to achieve its desired impact of facilitating improved budget management and financial reporting, all users should be adequately trained.
  • An effective change management strategy also needs to be developed to implement the new COA and associated reforms in the accounting and reporting system

 

Wazzeer Professional Network is built on qualified CAs, CSs, and Lawyers who work with startups in understanding and delivering various compliance works seamlessly. We would be happy to work with you getting this organized and compliant. Let’s connect -> “Get your Wazzeer”

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License

Ayurveda or the revolutionary remarks by Patanjali and growing demand for organically developed cosmetic products is catching up blazing demand, and with many startups focusing on developing products that are Homemade or 100% Natural this sector is catching eyes of investors globally. The manufacturing, distribution, and selling of cosmetic products are governed by The Drugs and Cosmetics Act, 1940 and The Cosmetics and drugs rules 1945.

 

Cosmetics are products that are intended to be rubbed, poured, sprinkled or sprayed on, or introduced into, or otherwise applied to, the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance and includes any article intended for use as a component of cosmetic. For manufacturing, distribution and selling of cosmetic products license are mandatory. Manufacturing license is valid for is valid for 5 years.



Major Categories under which cosmetics have been divided as:

 

  • Powders like Face powder, cake makeup, compacts, face packs, masks, and rouges, etc.
  • Creams, lotions, emulsions, pastes, cleansing milk, shampoos, pomade, brilliantine, shaving creams and hair oils etc.
  • Nail Polishes and Nail Lacquers.
  • Lipsticks and Lip-gloss, etc.
  • Depilatories
  • Preparations used for Eyes
  • Aerosol
  • Alcoholic Fragrance Solutions.
  • Hair Dyes
  • Tooth powders and toothpaste, etc.:
  • Toilet Soaps
  • Sanitary pads

 

Procedure to acquire the manufacturing license:

 

  1. Fill Form 31with a license fee of Rs.2500 and an inspection fee of rupees 1000 for every inspection.
  2. Application to manufacture additional items of cosmetics shall be accompanied by a fee of Rs 100 for each item subject to a maximum of Rs. 3000 for each application.
  3. The Inspector or Inspectors from Licensing Authority will conduct on the premise and generate a report.
  4. Once the authority is satisfied that your premise abides by the standards, it will provide you the license.
  5. If cosmetics are to be manufactured at more than one place, a separate application for each premise need to be made and separate license needs to be obtained for each premise.

 

Documents to be furnished along with Application to acquire license:

 

  1. Affidavit of Applicant
  2. List of machines installed for manufacturing
  3. List of laboratory equipment
  4. Valid NOC from Pollution Control Board
  5. Rent/Lease Agreement in case premises is taken on rent or lease.
  6. Plan layout of the premises.

 

Conditions for the grant of Manufacturing Licence:

 

  1. Technical Staff consisting of at least one person who is a whole-time employee and who holds a Diploma in Pharmacy approved by the Pharmacy Council of India or registered under the Pharmacy Act, or has passed the Intermediate Examination with Chemistry as one of the subjects or an examination recognized by the Licensing Authority as equivalent to it.
  2. The factory premises shall comply with the requirements and conditions specified in Schedule M-II
  3. The Applicant must decide for Licensing Authority to conduct such tests.

 

In case you need any assistance in legal or accounting or secretarial services, things can be consulted and delivered seamlessly on Wazzeer platform -> “Get your Wazzeer”

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