NIHAL JOSHI – SOP:

I. FLII
1. Preparation of Financial Statements for the period January to December as well as April to
March, Tax Audit report & US memo:
 While preparing financials statements, we extract trial balance in detailed manner, link
it to grouping sheet & then link it to notes. We also have to make sure that previous
year’s figures or groupings are not changed unless asked by auditor during the current
year’s audit.
 While preparing tax audit, we prepare separate file for Clause 34 (TDS details), special
attention needs to be given to this file
 While preparing, US memo, we not only prepare US memo in a specified format but also
Financials for the period January to December. While preparing US memo, special
attention needs to be given to meals data.

2. Over viewing accounting entries, ledger scrutiny & coordination with statutory auditors:
 Ledger scrutiny needs to be done before we start to prepare financial statements
 Ledger scrutiny is conducted in order to ensure that, all the provisions are made
properly, TDS is deducted wherever required, to check if any bill is due for a longer
period of time, unbilled revenue is booked, provision for tax has been knocked off
against advance tax, TDS receivable & SA tax for those years whose assessment has
been completed, entries w.r.t accrued interest, prepaid expense, license fees is passed.

3. Collection & preparation of various data & workings for the purpose of Audit & providing it to
auditor on time to time:
 This includes, preparation of accrued interest working & reconcile it with Form 26AS
 Preparing ageing of debtors as well as creditors
 Obtaining bank confirmation in a specified format
 Make sure that bank statements are received for all the bank accounts for the entire
period under audit & also make sure that balance as per tally & balance as per bank
statement is matching and if it’s not then make sure that reconciliation is prepared
 Make sure that bonus data (Bonus working & bonus payment file) is received for all the
months. In addition to this, make sure that we have received other various reports like
(bodex, BOR – 610, BOR – 715, BOR – 715C, DSR – 510, DSR – 519, EIR – 610, EMR - 640).
Further, also make sure that we also receive full & final working & payment file
 We also need to provide cash balance certificate, debtors and creditors balance
confirmation, employee loan confirmation etc.
 We also need to provide other workings like, Depreciation (fixed asset register), Forex,
GST, Mutual Fund, Rent equalization, professional fees, prepaid expense etc.
 In addition to above we also need to provide purchase register, sales register &
inventory register along with bifurcation into Health care, beauty care & literature items
 We also need to provide salary details. These details are sent to auditors directly by HR.
 In addition to above, we also need to provide other data as and when asked by auditor

4. Weekly updates on Mutual Fund returns :

 This working is prepared for the week Wednesday to Tuesday, viz., this working need to
be sent on every Wednesday to Vishal Sir.
  Certain data in this working needs to be changed on monthly basis viz., AUM, portfolio
breakup, YTM & Expense Ratio

5. Monthly Capital Gain working on Sale of Mutual Fund units & ensuring proper accounting of the
same:
 This working need to be prepared as soon as month ends & make sure that closing
investment value as per tally is matching with closing investment value (cost) as per MF
statement.
 Entry need to be passed in tally towards booking of Capital gain or loss on sale of MF
units after taking approval from Pradeep.

II. FLPI
1. Preparation of Financial Statements for the period January to December as well as April to
March, Consolidated Financial Statements, Tax Audit report & US memo:
 While preparing financials statements, we extract trial balance in detailed manner, link
it to grouping sheet & then link it to notes. We also have to make sure that previous
year’s figures or groupings are not changed unless asked by auditor during the current
year’s audit.
 While preparing consolidated financials, we prepare our consolidated working,
eliminate figures liker inter co balance & link balance figure to notes
 While preparing tax audit, we prepare separate file for Clause 34 (TDS details), special
attention needs to be given to this file
 While preparing, US memo, we not only prepare US memo in a specified format but also
Financials for the period January to December. While preparing US memo, special
attention needs to be given to meals data.

2. Over viewing accounting entries, ledger scrutiny & coordination with statutory auditors:
 Ledger scrutiny needs to be done before we start to prepare financial statements
 Ledger scrutiny is conducted in order to ensure that, all the provisions are made
properly, TDS is deducted wherever required, to check if any bill is due for a longer
period of time, unbilled revenue is booked, provision for tax has been knocked off
against advance tax, TDS receivable & SA tax for those years whose assessment has
been completed, entries w.r.t accrued interest, prepaid expense, license fees is passed.

3. Collection & preparation of various data & workings for the purpose of Audit & providing it to
auditor on time to time:
 This includes, preparation of accrued interest working & reconcile it with Form 26AS
 Obtaining bank confirmation in a specified format
 Make sure that bank statements are received for all the bank accounts for the entire
period under audit & also make sure that balance as per tally & balance as per bank
statement is matching and if it’s not then make sure that reconciliation is prepared
 We also need to provide cash balance certificate, debtors and creditors balance
confirmation, employee loan confirmation etc.
 We also need to provide other workings like, Depreciation (fixed asset register), GST,
Mutual Fund, prepaid expense etc.
 We also need to provide salary details. These details are sent to auditors directly by HR.
 In addition to above, we also need to provide other data as and when asked by auditor
 4. Monthly Capital Gain working on Sale of Mutual Fund units & ensuring proper accounting of the
same:
 This working need to be prepared as soon as month ends & make sure that closing
investment value as per tally is matching with closing investment value (cost) as per MF
statement.
 Entry need to be passed in tally towards booking of Capital gain or loss on sale of MF
units after taking approval from Pradeep.

III. HNB
1. Preparation of Financial Statements for the period January to December as well as April to
March, Consolidated Financial Statements, Tax Audit report & US memo:
 While preparing financials statements, we extract trial balance in detailed manner, link
it to grouping sheet & then link it to notes. We also have to make sure that previous
year’s figures or groupings are not changed unless asked by auditor during the current
year’s audit.
 While preparing consolidated financials, we prepare our consolidated working,
eliminate figures liker inter co balance & link balance figure to notes
 While preparing tax audit, we prepare separate file for Clause 34 (TDS details), special
attention needs to be given to this file
 While preparing, US memo, we not only prepare US memo in a specified format but also
Financials for the period January to December. While preparing US memo, special
attention needs to be given to meals data.

2. Over viewing accounting entries, ledger scrutiny & coordination with statutory auditors:
 Ledger scrutiny needs to be done before we start to prepare financial statements
 Ledger scrutiny is conducted in order to ensure that, all the provisions are made
properly, TDS is deducted wherever required, to check if any bill is due for a longer
period of time, unbilled revenue is booked, provision for tax has been knocked off
against advance tax, TDS receivable & SA tax for those years whose assessment has
been completed, entries w.r.t accrued interest, prepaid expense, license fees is passed.

3. Collection & preparation of various data & workings for the purpose of Audit & providing it to
auditor on time to time:
 This includes, preparation of accrued interest working & reconcile it with Form 26AS
 Preparing ageing of debtors as well as creditors
 Obtaining bank confirmation in a specified format
 Make sure that bank statements are received for all the bank accounts for the entire
period under audit & also make sure that balance as per tally & balance as per bank
statement is matching and if it’s not then make sure that reconciliation is prepared
 Make sure that bonus data (Bonus working & bonus payment file) is received for all the
months. In addition to this, make sure that we have received other various reports like
(bodex, BOR – 610, BOR – 715, BOR – 715C, DSR – 510, DSR – 519, EIR – 610, EMR - 640).
Further, also make sure that we also receive full & final working & payment file
 We also need to provide cash balance certificate, debtors and creditors balance
confirmation, employee loan confirmation etc.
  We also need to provide other workings like, Depreciation (fixed asset register), Forex,
GST, Mutual Fund, Rent equalization, professional fees, prepaid expense etc.
 In addition to above we also need to provide purchase register, sales register &
inventory register along with bifurcation into Health care, beauty care & literature items
 We also need to provide salary details. These details are sent to auditors directly by HR.
 In addition to above, we also need to provide other data as and when asked by auditor

4. Weekly updates on Mutual Fund returns :

 This working is prepared for the week Wednesday to Tuesday, viz., this working need to
be sent on every Wednesday to Vishal Sir.
 Certain data in this working needs to be changed on monthly basis viz., AUM, portfolio
breakup, YTM & Expense Ratio

5. Monthly Capital Gain working on Sale of Mutual Fund units & ensuring proper accounting of the
same:
 This working need to be prepared as soon as month ends & make sure that closing
investment value as per tally is matching with closing investment value (cost) as per MF
statement.
 Entry need to be passed in tally towards booking of Capital gain or loss on sale of MF
units after taking approval from Pradeep.

6. Preparing & uploading of GSTR – 1 on monthly basis

GSTR- 1 mainly consists of 4 steps:
i. Preparing Sales data. It also consist of branch transfer, DSC, Free Product, other income
data & amount written back data
ii. Preparing debit note
iii. Preparing credit note
iv. Uploading data on portal.

Above mentioned steps are explained in detailed below:

i. Sales:
 We get sales data twice, viz., for the period 1 to 25 and for whole month after month
are closed. So once we receive sales data for the period 1 to 25, we save it in respective
locations. Once we receive sales data for whole month, we add invoices issued after 25
to till last date of the month and we also remove those invoices which are cancelled
subsequently.

 Sales data we receive are in CSV format so we need to save it in excel (.xlsx) format.

 Once we save the file, we add various columns like, Updated Customer billing state,
Updated Customer billing PIN, Updated Customer billing GSTIN, Updated State code of
Place of supply, Updated HSN/SAC code etc.
  We apply total formula on various columns like, item quantity, delivery charges (which
we charge for non-counter delivery), item taxable value, CGST, SGST & IGST amount and
total amount.

 Update Customer Billing state because invoice may have state which are either incorrect
or not there in GST state code list like New Delhi, Port Blair, Lakshadweep island etc.

 Update Customer billing PIN, because it may contain PIN for greater than or lesser than
6 numbers or PIN for goods sold outside India

 Update place of supply because if any invoice is having wrong POS then we may end up
paying wrong GST (IGST instead of CGST & SGST and vice versa) and if this is the case
then we should rectify POS as well as GST liability, difference we can get in columns
CGST, SGST & IGST delta. We should also keep in mind that when we change our GST
liability, viz., IGST to CGST & SGST or vice versa, we will get positive figure in one delta
column & negative in another delta column, total of these delta should be nil (i.e.
positive in delta should nullify negative figure in delta). We determine POS by adding
separate sheet called “POS” and we determine whether any invoice is having wrong POS
by adding pivot. POS can be determined on the basis whether customer is registered
under GST or not. If he is registered then POS is to be determined on bill-to basis. If
customer is unregistered, then POS is to be determined on ship-to basis.

 Apart from sale, we also include inter-state branch transfer, DSC, Free products, BAS
data & other income data.

 Add various sheets like B2B, B2C, HSN, Invoice series, Doc Series & RD URD. B2B consist
of invoices issued to customer registered under GST. B2C consist of invoices issued to
customer not registered under GST. It also includes credit note as well as amount
written back data which we reduce from B2C sales. HSN consist data HSN code wise
sale, including other income, BAS, debit note, credit note & amount written back data.

 Insert Pivot to all the above sheets

 After incorporating data, we also prepare document series file. Different set of series is
maintained for different data.

ii. Debit Note:

 Debit note is issued for branch transfer rate difference. Since this is for rate difference,
we do not consider quantity while filing GSTR 1. While uploading debit note, we
consider only interstate branch transfer debit note. The word in column inserted in
upload file should be “Debit” instead of “Debit note”.

iii. Credit note:

Credit note is of 2 types:
 Credit note issued by FLPT to FBO against actual product return:
 This credit note is w.r.t. product returned by FBO. Since it involves actual movement of
product, we reduce quantity of product returned from quantity of product issued in HSN
 summary sheet. We show credit note for a location from which invoice for sale was
issued.

 Credit note issued by FLPT one branch to another branch for NDP on sales return:
 Since it does not involve actual movement of product, we do not reduce quantity of
product returned from quantity of product issued in HSN summary sheet.

iv. Uploading on cleartax:

 Once we incorporate all the data, we prepare upload file. While preparing upload file,
one should keep in mind that Place of supply and PIN should be copied from updated
column & copy taxable value and GST liability from updated columns

 Make sure that Taxable value & GST liability is matching with Total value

 We prepare separate upload file for GSTR 1 & Credit / Debit note.

 If size of upload file is more than 16MB then we need to prepare 2 upload files.

 Once we upload the file, we need to check if any error is there and need to fix those
errors.

 Once data is uploaded successfully, we need to update data in different tabs:

 In B2B it automatically captures the data so need to check B2B figure with B2B sheet
added in GSTR 1.

 In B2C we need to click “Auto Compute” & then “Save”. Make sure that figures are
updated after considering credit note issued for actual product return

 In HSN we need to click “Auto Compute” & then “Save”. Make sure that figures are
updated after considering credit note issued for actual product return.

 In document series tab, we copy data from doc series sheet prepared in GSTR – 1. Apart
from this, we also need to add delivery challan & job work challan.

 Once we upload the file, we need to check data from tally which is maintained branch
wise. Sale, debit note & credit note figure we check from P & L sales accounts. DSC &
Free products data we check from Purchase accounts. Other income & BAS data we
check from P & L indirect income & GST liability we check from liability side. Once all the
figures in tally are matching with the figures reflecting on cleartax, we file our monthly
GSTR – 1.