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“Without changing our pattern of thought, we will not be able to solve the problems we created with our current pattern of thought”, Albert Einstein

Because of various resource limitations, SME owners in India accord least priority to the accounting services. There is complete lack of understanding and willingness for use of the data generated by the bookkeeping in the decision making for growth of business. They mostly depend upon their personal knowledge for taking crucial business decisions. They undertake bookkeeping activity more because of statutory requirements rather than getting useful information.

Disadvantages of Current Accounting and Bookkeeping Service Delivery Model

  • There is hardly any practice of creditor or debtor analysis to evaluate them.
  • The inventories are not kept and taken systematically giving a margin of error in calculating the true profits of the business. A substantial error here can have a very long term effect even on the sustenance of the business.
  • They are not able to take benefit of lower rate of interest from the lenders because of poor credit rating due to bad financials, at least in the presentations.
  • The status quo with regard to the accounting services depicts very dismal state of affairs. Since the businessmen under the current mental model did not give enough importance to the information produced by the bookkeeping activities, the competence of the accountants was also affected because great degree of skill was not required.
  • SME Owners are choosing the accountants based upon the volume of work and price.
  • The accountants are either hired as full time employee or part time employee. The latter work on the visit basis but are paid fixed amount per month. So they sometime fail to visit as per agreement causing arrear of work. But they do not have any disincentive for missing the visit because they get fixed remuneration. This causes confrontation between the accountant and the owner who delays the payment of the accountant till he completes his arrear of work. Both get tied in a vicious cycle of incomplete work and delayed payments. This phenomenon is very common.
  • The limited financial resources of part time accountants get very badly affected by the delayed payments and this acts as a big motivation to shift to fixed income employment with work based incentives.
  • Since the accountants do not possess any formal qualification, they are not well trained and professional, the Owner has to take the services of CA for resolving the queries of accountants, at extra cost.
  • For each of other job, services of respective professionals are taken, for instance, VAT consultants is required for VAT returns , service tax consultants is required for service tax returns , CA is required for TDS/TCS and other income tax related returns. Financial consultants are required for raising funds and making investments.
  • To say that accountants restricts themselves to the bookkeeping only and for all other jobs additional professional services have to be taken at huge extra cost.
  • The software cost too has to be borne by the owners.
  • No benefit of sharing of industry specific provisions is coming to their business under this system.
  • To sum up, the status quo of providing accounting services to The SMEs in India is highly inefficient and devoid of value addition. The same is demonstrated in figure below.
  • IABS is the Solution to all the Mentioned Pitfalls of the Present Accounting System.

IABS is the Solution to all the Mentioned Pitfalls of the Present Accounting System.

The whole philosophy of IABS is to help you in taking your business and investment decisions by providing you with analysis of your bookkeeping data. By maintaining the books in a qualitative manner, we get access to the various indicators and parameters of your business and hence are in the best position to guide you to take various financial business decisions in the course of your business. The services offered by IABS are designed to meet your requirements as an SME, self-employed, home-based businesses or individual customer.

The effort and time you spend on the bookkeeping, payroll, bank reconciliation, accounts receivable and payable, tax preparation etc. hold you and your managers back from working on the strategies for increasing sales and business expansion. All the businesses at one point or the other require these services but it is very difficult for the overburdened company managers and sole proprietors to work simultaneously on the business maintenance and expansion along with these basic requirements with the limited company resources. So keeping in view all these pitfalls, we provide outsourcing of these office activities allowing you to focus your energy and efforts on maximizing your core business.


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