Accounting for Small Business Essay Example for Free

Accounting for Small Business Essay defraudSMEs play a very important role in Indias economy and have a colossal potential for strengthening the real sector in India. But there has not been appropriate basis yet which is account statement organization to show the stemma feasibility.Traditional stage commerce in Indian Villages had been started by a family and ancestors, yet has gotten bigger now. This business has many strengths and weaknesses. Based on the condition and background, the proposed-accounting system has been failed. It has been in any case successfully tested for a month transaction and rewrite. Adding knowledge anxiety into accounting system is an substitute(a) way to develop the proposed-accounting system. The four modes of knowledge creation will facilitate the business and its owner to chip in many modules in accounting system and to reengineer the business process.See more Distinguish between problem- rivet make out and emotion-focused coping Es sayINTRODUCTIONSmall business plays a very important role in Indias economy, particularly in aspects increased employment, income generating, economic development. In addition, this sector is considered as a driving armament for the uncouth economy. But until now there are still many problems to hinder the polished business growth. Facts in the Asia Pacific region revealed that Small and Medium Enterprises (SMEs) employ about 60 percent of the workforce. simply 10 percent of the total companies in Asia Pacific which is a big business, the rest are SMEs. For India, check to Small Medium Business Corner (SMBC) data in 2012 the numbers of mild, small and medium green lights develop into 130 Lakhs (http//www.smeindia.net/export_schemes/OverviewofMSME.html) by giving employment to 410 Lakhs people and able to contribute to the total national gross domestic product amounted to 8-9 percent in 2012.Basic problem of circumspection in small business is inability of owners to look on their management style that appropriate with the business need and development stage. In early stage of business, family management style leads to one-man show. According to improvement of business environment, that conventional style could not be pushed longer. peculiarly in financial management, the business owners could not be able to separate the financial management of business and family yet. Besides, they have not well planned, managed and reported periodically yet. It is caused by there is no appropriate foundation which is accounting system. The impact is that the owners of small business have difficulties to cooperate with external such as swan or another financial institution. The owners have difficulties to show their feasibility business when they want to propose extension or make a business contract with another business.Based on the importance of an accounting system, this question results a proposed-accounting system which can be applied by owners of small bus iness in India. The proposed-accounting system is a generic model of purchase and selling system that should be enhanced fit to business need and by refer to the knowledge management approach.LITERATURE REVIEWACCOUNTING frameAccording to Gillespie, accounting system is an organization of document, form and report which is managed to provide information for management. Based on that definition, elements of accounting system are documents, forms and reports, but still concern with procedure and internal control. Therefore, proposed-elements in this fill will refer to it.SMALL BUSINESSUnder the law of Micro, Small and Medium Enterprises (2008), definition of SMEs in India is explained by the table below. Based on the definition, the research object is categorized as a small business.DEFINITION OF SMES IN INDIAEnterprises engaged in providing or rendering of services (i) A micro attempt is an enterprise where the investment in equipment does not pop off Rs. 10 lakh (ii) A small ent erprise is an enterprise where the investment in equipment is more than Rs.10 lakh but does not exceed Rs. 2 crore and (iii) A medium enterprise is an enterprise where the investment in equipment is more than Rs. 2 crore but does not exceed Rs. 5 crore.Enterprises engaged in the manufacture or production, processing or preservation of goods (i) A micro enterprise is an enterprise where investment in gear up and machinery does not exceed Rs. 25 lakh (ii) A small enterprise is an enterprise where the investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore and (iii) A medium enterprise is an enterprise where the investment in plant and machinery is more than Rs.5 crore but does not exceed Rs.10 crore.SYSTEM DEVELOPMENTSystem development in this work will result the three main stepsa.System analysisActivities in this stage are sign study, feasibility study, requirement definition, and specification system arrangement. b.System design After finishin g system analysis, the next activities are system design, system building and system testing. c.System implementation Based on system testing, a revised system will be established. Finally, system is implemented and operated. At this stage, company will conduct criminal maintenance activity.RESEARCH METHODOLOGYSince this study wants to develop a proposed-accounting system, Research and development approach which is applied in this study is a research program that is followed by a development program. It is a combination of descriptive study that describes the actual phenomenon in an object and exploratory research that develops a proposed -accounting system. A proposed-accounting system is focused on purchasing and selling system since those are the main activities in the business.The location of this study, Traditional small business in Indian Villages, was chosen on purpose, because this business in the Villages has significantly improved in sales and human empowering, also gover nment is paying attention by giving assistantship for both management and technology. Primary data of this study was the results of guided interviews and observation.The steps of this study are designed as followa.Initial studyPreliminary research was conducted to comprehend previous studies and literature, guided questionnaire drafting, and Traditional business understanding.b.System requirement definingAt this stage, the data was obtained by interview with business owners and observation directly to the business. By understanding the research object condition and background, also the strength and weakness, the accounting system requirement could be defined.c.Development of proposed-accounting systemAt this stage, development of proposed-accounting system was managed by interviews, observation, and group discussion among owners, researcher and government, related to main accounting system elements, which are document, form and report. In its development, knowledge management appro ach was proposed to use since it can facilitate business daily operation into business standard operation. The result of this stage was a proposed-accounting system.d.Testing and implementationTesting was completed by implementing the proposed system to handle a month transactions. Owners and their staff used it to run transactions of purchasing and selling for a month. By running the system, problems were found and then they were used to revise the system. At this stage, a revised-accounting system was established.e.Conclusions and recommendationsIn the final stage of this study, conclusions and suggestions from all research processes were stated.RESULT AND DISCUSSIONPROFILE OF conventional BUSINESS IN INDIAN VILLAGESIndia is one of the major exporter and supplier of commerces and gift products to the world market. The Indian handicrafts manufacturing is highly labor intensive and decentralized, being spread all across the country in rural and urban areas. The sector is conside red as the second largest employment-generating sector after agriculture with numerous artisans engaged in craft work on a part-time basis. The industry offers employment to over 6 gazillion artisans, including a large number of women and people from the weaker sections of society.The present day handicraft tradition of India is a utter(a) example of assimilation between the traditional designs and modern techniques. The fast evolution demand for Indian handicraft and gifts products have made this sector a full-fledged large scale organized industry that is growing day by day.HistoryThe rich history of Indias craft tradition has evolved over the centuries crack a legacy of Indian culture promising everything beauty, dignity, form and style. The variety is comprehensive and ranges from age-old gemstone carvings to modern handicrafts making use of glass flints and mirrors. The most popular crafts, include metalware, earthenware, pottery, sculpting, woodwork, hand-printed textile s and scarves, embroidered and crocheted goods, shawls, zari products, stone carving and impersonation jewelry.There is a myriad of art and craft traditions in India that depend on social, economic and regional factors. The present status of the sector in India owes much to the rich crafts history and tradition of the recent. Majority of the crafts from the past continues to flourish due to their utilitarian characteristics, availability to the common people and popularity in domestic and global markets.Today, some of the sectors within the craft industry have even become full fledged industries in their own, worry carpet weaving, traditional textile (Banarsi silk sari, Chikankari etc), gem corking and polishing, jewelry making, the world famous diamond cutting and polishing industry, brassware, jute products, etc. The growth of these industries is due to their ever-increasing demand and the popularity of Indian crafts in the domestic market and overseas. Gems and jewelry, carpe t making, metalware, leather products, jute products etc. are some industries, which are growing rapidly.