Accountancy for Software Development Firms

[nomehero]

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Hi!

I have recently started my own software development firm. After having success with few offshore projects I am looking forward to registering the firm in Pakistan.

I would like some help in managing the accounts of my firm. At the moment the software I use is SAGE Line 50. Could anyone guide me what the structure of accounts would be for a registered software development firm.


Thank you.



Syed Irtaza Ali
MCP, OCP, OCA

[Pervez]

Hi Ali!
Normally the advice i give on behalf of my firm is billed @ $ 175
per hour! However, when i see young Pakistanis trying to make a name in national and international business world, i am willing to give a 100% courtesy discount!!!Now some serious stuff!
At the very start of any business enterprise, one has to look into a few accounting and non accounting issues, such as
1) In what legal form, you want to continue your business i.e. sole-proprietorship, partnership or a corporation. In your case, if you are engaged in offshore projects, it is good idea to limit ur liability in the business to the value of shares u will own in a corporation. Hence, u should consider forming a private limited co.
If you are based in UK(as ur e-mail address suggests) the process is simple and can be carried out by yourslef without involving a lawyer. You should contact relevant govt. dept for this. Best way is search through the internet.
2) Software development at any serious level involves professional liability. Specially if you are doing work abroad, you should seriously consider obtaining liability insurance. Make enquiries with insurance agency that you deal with regarding your other insurance needs. Professional orgs like CA and CPA provide group liability insurance and won't let you practice without it.
3) Now that you have made some real "money" question arises how to account for it. My advice don't get too fancy at the early stage. You should concentrate on more productive aspects of the business than keeping the books. Get some part-time help from a friend or family member. Software development is not a very unique business from accounting perspective. Use the sample account chart provided in your current software.
4) As you grow, u would need an accountant for frequent advises (i don't give out my number at this stage!!!). Accounting is mother of all types of businesses. Your accountant will know a lot more about business world than you give hime credit for. But that will come later.
I hope one day our boys would stand shoulder to shoulder with those
south indian mokeys!!! (sorry for the outburst!!)


<b>Also i think we should move this topic to General Discussion as this section is reserved for CA studends or CAs who want to rant and whine about their firms (i know some of them wouldn't forget and forgive me for these remarks!!!</b>


Take care.






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