Accrual Vs. Accounting

Muthukumar (Chartered Accountant) (78 Points)

13 December 2010  

Our client receives their expenses bill from the factory with a considerable delay like one or two months. Hence the basis concept of accrual is not being followed and entries are booked later on receipt in the admin office where accounting functions take place. The payments to the parties are authorized and made from the factory side. So from the factory side they feel they need the original invoice/bill till payment and then they are forwarding to the Admin office. Because of this compliances like TDS which must be followed on accrual basis are not properly followed. Appointing an accountant at factory itself is unviable as major accounting functions are to made in the admin office. So kindly friends suggest a few ideas to avoid this delay in accounting and a proper system to be implemented.