Why Does a Business Need Accounting and Bookkeeping Services?
Accounting plays a crucial part in developing the base of an organization. Under the umbrella of accountancy, we do have bookkeeping and accounting. Bookkeeping is the ultimate foundation that deals with the daily recording of business transaction whereas accounting is a broader concept that includes multiple processes apart from analyzing these recorded transactions.
Once a green signal is received by the registrar to carry out the daily business activities, a business entity involves in multiple every single day with multiple stakeholders and in a different way. So, it becomes a compulsion to keep a track of every single transaction that involves huge cash inflow or outflow.
Accounting Types in the Czech Republic
There are two types of accounting followed in the Czech Republic:
1. Tax Evidence of Income and Expenditure
These can be used by entities that are not registered in the trade register, with a turnover of not more than 15 million CZK per year.
2. Double-Entry System
Here, each economic transaction takes place in two different accounts credit and debit simultaneously.
The European Accounting System
The European Accounting System was established in the year 1977, to create a major impact on the accounting system of the European nations. The accounting system is a bit different from that of Czech-Republic Accounting System and is based on:
- Directives of the European Union
- International Accounting Standards (IAS), now known as International Financial Reporting Standards (IFRS)
Types of Tax in the Czech Republic
Any nation embraces a number of taxes that are to abide by both individuals and organizations. These are duly formed keeping in mind the rules and legal regulations of the country. The different types of tax available in the Czech Republic involve:
- Income tax
- Value-added tax
- Road tax
- Immovable properties
- Tax on the acquisition of immovable property
- Excise duty tax
- Environmental taxes
Types of Business Entities and Tax Rates in the Czech Republic
|Business Entity Type
||Corporate Tax Rate
||15% or 19%
||15% or 19%
|Limited Liability Company
|Joint Stock Company
VAT Rgistration Process in the Czech Republic
The documents essential to complete the VAT registration procedure in the Czech Republic are:
- Certificate of registration
- License to business activities
- Abstract of Companies Registrar
These documents are to be submitted via an online portal and should be officially authenticated and translated into the Czech language.
Business Setup Worldwide Accounting Services
At Business Setup Worldwide, we look into the complete process of establishing a business. We focus on each of the individual segments. When it comes to the accounting segment, we provide a wide variety of services that include:
- Dealing with the international tax structure
- Maintaining payroll and personnel administration
- Generating profit and loss statement, balance sheets, financial statements
- Preparing and planning income tax according to the national rules
- Tracking the cash flow of business
- Analyzing and reforming the budget structure
- Reconciling bank statements
Benefits of Availing Accounting and Bookkeeping Services
Now that we have a clear idea about the importance of accounting and bookkeeping services and the role that it plays in building business foundations, let’s have a look at the benefits that can be derived by availing these services:
1. Cash Inflow and Outflow
Accounting records help in keeping a clear check on the activities that result in cash inflow and outflow. Each business transaction has an effect on the financial front of the business.
2. Minimization of Financial Issues
A well-maintained book of accounts deals with up-to-date recordings of transactions. This consistency of recording daily transactions lowers the risk of facing financial issues or crisis.
3. Display of Business Expense
Accounting helps in getting a clear idea about the fund utilization.
Accounting and bookkeeping records act as a tracker tool to highlight any malpractice or misuse that takes place in the business entity and can be solved at the right time.
5. Firm Expansion
Any business requires heavy funds for expansion. Book of accounts displays the funds available so that it becomes to estimate the correct time and sum required for business expansion.
6. Firm Stability
Accounting records help the business to understand and measure their stability level among competitors.
7. Budget Flexibility
Transparent records of cash inflow and outflow help a business entity to determine their budget, so that it may be controlled it as per business requirements.
Business Setup Worldwide has been an active player as a business consultant in setting up businesses worldwide. We have a large number of satisfied clients dealing with different nature and size of the business in multiple nations. Our team of experts hold considerable industry experience and can guide you in every way to build a business framework for your company. Apart from looking into the accounting domain, we also help in dealing with legal proceedings that are an essential part of any company formation process.