Wednesday, June 3, 2020

How to Move Your Accounts Department Completely Online

The Corona Virus outbreak has put a halt on a number of business activities.

It is possible that your accounting department may have gone into limbo for a few weeks too, especially if you are a small enterprise with heavy dependency on manual data entry on a software such as Tally that is installed on a local server at your office, and the accountant complains of not having access to data to complete compliance related filing.

Here is a step-by-step guide on the problems and the possible solutions to swiftly move your accounting department online so that they can work from home and no work is hampered.

Problems at Hand

1) Accounting software is installed on specific machines at the office and the data is stored locally, which is now inaccessible

2) Accountant's workings and folders/files are kept physically at the office and it would be a task to digitize all such records

3) Even if the above two issues are resolved by providing online access to accounting data, there may not be a simple mechanism to track the daily deliverables in accounts and get an overview of real-time pending tasks, and progress on them.

4) You are not aware of the best computer and web based tools available to set up this system at least possible cost

5) Accountant(s) are old and not tech-savvy, but are indispensable for personal or professional reasons, and may require training from the right persons

6) Your CA does not have full capacity in terms of manpower to deliver on your requirements and review your data timely

Main Objectives

1) Bring entire accounting function online
2) Set up a system of continuous monitoring of accounting and compliance function
3) Increase efficiency in accounts reporting and compliance filing

Bringing the Accounting Data Online - Tally & Other Software

Accounting Systems Popularly Used

- Tally ERP.9
- Busy
- Quickbooks
- Zoho
- Xero
- SAP, Oracle, or any other ERP system

Moving Tally on the Cloud - Process & Costs

If you are like most businesses in India, you most probably use Tally as your accounting software.

Tally has the option of putting your data on the cloud for easy web access from any location. You may speak with your Tally operator for the same. If you do not know whom to contact, you can let us know and we'll connect you to one of the many Tally providers that we know of.

The cost for obtaining a 3-5 user Tally access on the cloud with adequate storage space should cost you not over Rs. 2000 per month.

This cost may increase if you do not have a valid Tally license. Purchasing a license normally involves a one time cost of about Rs. 50,000 and it gives you lifetime access to Tally. You may have to pay for a few advanced features if they are ever released by Tally. However, we've mostly seen the same version to work for clients continuously for years.

A number of such Tally on Cloud providers promise to offer you access to the software on their own purchased Tally license, on which a huge number of their clients maintain data. We wouldn't recommend such an arrangement as one, it's possibly unlawful, and two, it may bring with itself its own data integrity and safety risks.

The monthly cost of Rs. 2,000 for web access of Tally may increase marginally if you need to increase the number of users beyond 5 or increase the processing speed of the server your Tally Backup will be saved on.

Important Safeguards

1) Check if you have a valid Tally license or not. We'd recommend getting a valid license.

2) Take in writing details such as cloud space, RAM and processing speed from the Cloud provider.

3) Ask for minimum 7 days continuous off-site backup and the facility for the data to download twice a day on your local hard-disk at the business owner's home or office.

4) Ask about the data security and safety features to be aware of all methods of recovering your accounting data in case of an unforeseen event.

5) Make the Cloud service provider sign a Confidentiality Agreement which would make them liable to heavy damages and penalties in case of breach.

6) Make a list of all user credentials and ensure that the passwords for access remain with the admin and the respective user only.

7) Ask for special features such as restrictions on copying data to the local computer system of the accountant/remote user and on not being able to email the data to any unauthorized person from the remote user's computer.

Softwares Other than Tally

Most of the other softwares are also easily available on online mode and can be accessed from any location. A number of them such as Quickbooks, Zoho and Xero are web-based and can be logged into from any computer system.

We have mostly observed most accountants from small enterprises to be comfortable with Tally and Busy.

Quickbooks and Xero may look more user-friendly and may seem to have a more attractive UI/UX. However, from a long term perspective, in our opinion, Tally seems to be one of the most cost effective options and it is easier to find accountants who are comfortable with it.

We would recommend you take the same steps for your accounting software as these steps are mostly generic and may apply across the board.

In case of any concern, feel free to reach out to us for tech assistance.

Maintaining Invoices/Documents in Digital Copies

Keeping all Invoices and Vouchers Online

1) Generate a unique email ID for Accounts where all vendors would be instructed to send the various invoices for expenses and purchases. The same may also be communicated to your Departmental Heads, who receive such documents for onward submission to Accounts. Such email ID may be in the form of or

2) The Accountant may classify the vouchers received in different folders - expense head wise (e.g. Marketing, Traveling & Conveyance, Business Development, Purchases, Electricity Expenses, etc.)

3) Within each such folder for expense, sub-folders may be made for each month. With this classification, they will be able to access each voucher based on the accounting entry as per head accounted under and month of recording.

4) A coding for folders may also be developed and the same code may be mentioned in the narration to that accounting transaction. For example, if the voucher is stored in Marketing expenses -> June, the code for such a folder could be MKT-06/2020.

5) This entire folder can be updated on a designated accounting ID on Google Drive. The accountant may download the file into a Google Drive shortcut created on his system, which automatically syncs and uploads such files to the Drive on web. Or it may be saved directly to Drive from the mailbox.

6) A regular backup of this Drive folder may be taken either on the same cloud account on which Tally is stored, or on a local portable hard-disk at the owner'f office/residence. Such back up can be automated at a predefined frequency.

7) If you have documents received in hard copy at the gate or otherwise, a designated person at such location should be instructed to scan it using a simple app such as CamScanner and share it on the defined accounting ID immediately.

8) For sharing of such documents, the staff may be instructed to add tags to the subject line at the time of sending. For example, Goods Receipt Notes while being scanned and sent from the gate may be tagged on email as <GRN>. Similarly, Purchase Invoices may be tagged as <PI>, and so on. Such a code list should be made part of the Accounting Manual that we shall discuss later.

Permanent Files

The following types of files may form permanent data, which should be scanned as a one time exercise and be kept in a separate folder on Google Drive or Cloud for quick access by the accounting team or the business owner.

1) Incorporation Documents - Partnership Deed, Certificate of Incorporation, MoA, AoA, etc.

2) Registrations - PAN, TAN, GST Certificate, MSME Registration, Shop & Establishment Registration, PF, ESI, etc.

3) Other Permanent Records, including:
- Registers under Companies Acts - Minutes Book, Fixed Assets Register, etc.
- Bank Sanction Letters and Communications
- Contracts and Agreements
- Specific Sanction Letters
- Prior Year's Tax Orders

Other Continuing Records - Excel Workings

These are mostly maintained in PDF and Excel formats at most organizations, and should be easy to copy on to the online record.

The Excel files, once uploaded on Drive, can be edited and worked on online itself from anywhere. Access and editing rights can be defined user wise. There is also a permanent log of all changes made by different users at different times, so the admin can track all changes to these workings in real-time.

1) GST Workings: GSTR-3B, GSTR-1, GSTR-2A Reconciliation with ITC Register, GSTR-9 Reconciliations

2) TDS Workings: 24Q, 26Q, 27EQ, etc with calculations and filing receipts

3) Payroll: Payroll sheets can be uploaded on Drive and continuously updated online on Google Sheets.

Important Safeguards

1) Keep a check on the access controls for the accounting data folder. The business owner should have admin rights, while the others may have restricted rights on Google Drive only to view a few folders and to edit a few others.

2) You may also define all the files which would remain locked for deletion and may not be deleted other than by the admin

3) You can also include 2-step verification in access of the Google Drive and keep a phone number only for such OTPs, which may remain either with the business owner or a trusted Executive Assistant, who will provide the OTP for access to Google Drive only to authorized persons.

4) An auto-sync and backup system can be easily put in place for such record to be saved at all times on a computer or portable hard disk that belongs to the business owner at home or office.

MIS, Work Tracker & Task Manager

The above steps will have to be synced together in a worksheet and on a task manager that show the progress of all such tasks in real-time.

Work Tracker

The Tracker is mostly easily built using Google Sheets within the same Drive folder. This may track and color code the various steps in routine compliance such as:
- GST returns
- TDS returns
- Advance Tax deposit
- Applying for refunds from GST, Income Tax
- Tax scrutiny matters
- Correspondence with banks for facilities and borrowing limits


An MIS can be designed to track data, which may be either filled in on a regular basis by the accountant in the Google Sheet, or a Tally patch can be purchased for automated export of data from Tally into a predefined MIS format with the click of a button.

Such automated patches can be made, starting at one-time costs of about Rs. 10,000/- by a number of small service providers.

There are also a few web-based and mobile apps being developed for this purpose that are currently in beta testing mode and should be out in the market for all to use within the next 2-3 months.

Job Tracking - Trello

Trello is a web-based app also available for mobile, which helps you get a real-time visual snapshot on the various pending tasks assigned to different team members.

It starts with a free version, which is powerful enough for you to start managing your team for free from the app itself. It has some paid upgrades of better features, but you may not need them for quite some time to begin with.

The app can send automatic reminders for pending tasks to team mates on their phones, add such tasks to their calendars, send them messages whenever a new task is assigned to them and also keeps a tab on delayed tasks requiring immediate attention.

We have designed Trello Boards for a number of organizations and it is extremely easy to use and adapt to, if your team is onboarded on it in the right manner.

Developing of Accounting Manual & Hiring a Virtual CFO

Setting up your Accounting software on web and to get your data online is easy for most.

You may require help at the steps of codifying these processes to ensure that everyone follows the new methods.

For continuous monitoring and ensuring that the Accounting System develops well enough to reach the stage of a functional MIS and a Job Tracker, you may need the professional help of a Chartered Accountant, who is tech-savvy and aware of all such tools.

Services of Virtual CFO are normally available in a range from Rs. 25000 per month to Rs. 1 lakh per month depending on the size of the accounting team, the scale of the organization and the time commitment required from such professional.

We've planned such systems and transitions for a number of organizations, and a bunch of them are now reaching out to us during the virus outbreak. Happy to help if you have any queries on the same.