October 23, 2018

Why you need a localized accounting software in Pakistan?

Naveen Shayan

LedgerMax specialist

Business operations considerably count on the location of the business. Every country has different laws, protocols and approaches towards their local businesses. Similarly, in Pakistan, there are several legal matters and regulations regarding businesses that are different from other countries. This elevates the need of a localized accounting software in Pakistan. An accounting software that assists Pakistani business owners to manage and keep up with their finances while incorporating Pakistan based tax laws to make their accounting seamless and error-free. LedgerMax is one such software that offers complete integration between various areas of finance from general ledger to accounts payable and receivable with an adaptation of Pakistani tax laws to make financial reporting and tracking easier for you.

Advantages of Using a Localized Accounting Software in Pakistan 

1)    In Pakistan, the government collects the Corporate Income tax from businesses. This tax rate is imposed on the net income of the businesses, usually once a business year. Hence, a local accounting software facilitates Pakistani businessmen especially the ones running SMEs by performing all the required computations itself. It sets them free from going through data tabulations or carrying out confusing and exhausting calculations manually. Being the first in Pakistan to provide a comprehensive accounting management system explicitly designed for the local market, LedgerMax transforms the way accounting practices are carried out locally with the ambition of moving your business and people forward.

2)    In terms of finances, all businesses in Pakistan, on an average, follow the same criterion. The purchase of every single service or product is taken into consideration and the organization monitors all such records and then allocate their finances to tax, labor and the overheads etc. Hence, in the presence of a local accounting software, all you have to do is to enter the correct figures and it will perform all the computations efficiently on its own. The business owners are then in a better position to take quicker and secure business decisions.

Pakistani Taxation Law and the Use of a Localized Accounting Software

According to Section 230 of the 1984 Companies Ordinance, it is obligatory for all businesses to keep record of the following:

1)    Liabilities and Assets

2)    Sales and Purchase

3)    Payments and Receipts

When a business is involved in manufacturing, production, mining or processing activities, each and every particular related to the labor or material utilization may be set. The Securities and Exchange Commission of Pakistan, at times, orders to take in all these details in the account books. Here, a local accounting software like LedgerMax will do the needful. It will provide all the accounts related particulars required by the SEC promptly with accuracy and efficiency.

As per Section 233, the directors of all organizations are required to provide a profit and loss record along with a balance sheet at the organization’s yearly general meeting within a period of 18 months of inclusion and every 12 months afterwards. In relation to this, a localized accounting software will not only prepare the most accurate balance sheet but will also provide a comprehensive record of profit and loss account of the business.

Moreover, Section 234 compels every organization to submit a balance sheet that gives affair and factual view of the condition of the organization at every financial yearend. It also demands a genuine view of the profit and loss records of the organization as well. A local accounting software like LedgerMax will provide a detailed profit and loss record along with the balance sheet without any hassle.

FBR’s Principles of Book-keeping and the Significance of using a Localized Accounting Software:  

 The Federal Board of Revenue defines that all taxpayers (the ones deriving business income) should maintain precise records, documents and accounts in regard to:

(a)  The amount of capital earned and spent by the taxpayer and the conditions where the expenditure and receipt occurs

(b)  Each and every purchase and sale of services and goods provided and acquired by the taxpayer

(c)  Each and every asset of the taxpayer

(d)  Each and every liability on the taxpayer

(e)  Each and every item of cost related to the consumption of labor, materials etc.

A local accounting software can facilitate the taxpayer by maintaining the books as per the principles defined by the FBR. Accounting software like LedgerMax will issue a computer generated receipt, invoice or memo providing the most accurate and precise records of the capital earned and spent by the tax payer, the records of all the purchases and sales carried out by the taxpayer, record of every asset of the taxpayer and every liability on the taxpayer along with all the items of cost related to the consumption of labor and materials.

LedgerMax is an accounting software especially designed to cater the needs of local businesses in Pakistan particularly SMEs. It allows you to enter your business related financial transactions effortlessly and intuitively. The best thing about installing LedgerMax is that it allows you to view information that helps you in taking better management decisions. It keeps you up to date with all the valuable records to grasp the profit and loss situation of your company. Besides, its modules such as Payroll, attendance, CRM, inventory management also facilitates business owners to run their organization smoothly.

LEDGERMAX BLOG

Our Featured Blog Posts

October 20, 2020
As a business owner, what do you believe is the best way to maintain your business financial records?
Read more
October 7, 2020
A sales tax is defined as a tax paid to the government for the sales and supply of certain services and goods. The Federal Government of Pakistan levies sales tax under the 1990 Sales Tax Act on the services or goods being sold and supplied as well as on the goods imported into the country.
Read more
October 6, 2020
An invoice is an official document sent by the seller of a service or product to the buyer. The purpose is to form a compulsion on the buyer to pay, making an account receivable.
Read more