Accounting Process - KERALA

Accrual Based Double Entry

The method of accounting whereby revenues and expenditures are identified with specific periods of time, such as a month or year and are recorded as incurred, along with the liabilities and acquired assets; without regard to the date of receipt or payment of cash, distinguished from cash basis.

SAANKHYA Accrual based double entry application

SAANKHYA

• Fund codes • Function codes • Functionary codes • Account codes

SAANKHYA

• Fund code Major Fund : Panchayat Fund

Minor Fund (within Panchayat Fund) :

• General Fund

• Separate Financial statement for each fund

• Only General Fund in almost all Panchayats Therefore only one set of Financial Statements

SAANKHYA

• Function Codes The various functions of the Panchayats as per the Kerala Panchayat

Raj Act, 1994.

• Birth and Death Registration

• Solid and Liquid Waste Management

• Administration

• Building Regulation

• Social Welfare etc..

SAANKHYA

• Functionary codes

SAANKHYA

• Account codes • Four types of accounts

• Nine digit code for each Account

• First digit indicates the type of account

SAANKHYA

• Accounting Documents

• Receipt Voucher

• Payment Voucher

• Journal Voucher

• Contra Voucher

SAANKHYA

• Books of Accounts

•Cash Book

•Bank Book

• Journal Book

• Ledger

SAANKHYA

Financial Statements

•Balance Sheet

• Income and Expenditure Statement

•Receipt and Payment Statement

•Cash Flow Statement

SAANKHYA

•Recording of Receivables and Payables

•Recording of Cash and Bank Balances

•Recording of Fixed Assets

•Compilation in the prescribed format of

Balance Sheet

Preparation of Opening Balance Sheet

SAANKHYA Accounting of Transactions

Taxes

• Accrual Basis

Property Tax

Profession Tax - Institutions/Professionals/ Traders

Advertisement Tax

• Actual receipt basis

Profession Tax – Employees

Entertainment Tax, Show Tax

SAANKHYA

Rent

Rent - Accrual Basis :

• Rent from buildings, Rent from Lease of

Lands

Rent – Actual receipt basis :

• Rent from Auditoriums and halls, Rent

from Staff Quarters

SAANKHYA

Fees and other Receipts

Accrual Basis :

• D&O Licence Fees, PFA Licence Fees

• Other income, if auctioned and

regular in nature

Actual receipt basis :

• All other fees and receipts

SAANKHYA

Grants Capital grants and specific purpose grants received in advance :

Eg : Development Fund, B-Fund amounts for capital expenditure

• Treated as Liability on receipt

• When utilised for Capital Expenditure – transfer to capital contribution (Liability)

• When utilised for Revenue expenditure – transfer to Revenue grant (Income)

Revenue grants :

Eg : Maintenance Fund, General Purpose Fund – treated as revenue income

SAANKHYA

Public Works

•Part Bills are debited to Capital Work in

Progress

•When completion certificate is received –

transfer as Fixed Assets

•Capital Expenditure – creation of asset or

value addition to an asset

•Revenue expenditure – Repairs and

maintenance

SAANKHYA

Fixed Assets

• All movable and immovable properties are

Fixed Assets

• Depreciation is provided on asset in Straight

Line Method

SAANKHYA

Employee Liabilities

• Expenditure is recorded on the last day of the

month

• Liability is created for recoveries, salary payable

and pension contrition, when expenditure is

recorded

SAANKHYA

Procedure at the beginning of the year

• Conversion of ‘Receivables (current)’ in to ‘Receivables (Arrears)’

• Conversion of ‘Closing stock’ into ‘Opening Stock’.

• Recording of accrual of income

• Adjustment of Licence Fees received in advance against Licence fees receivable (Current).

SAANKHYA

Procedure during the year

• Recording the receipts in cash and by Cheque/DD/Letter of Authority/ Treasury Bills

• Recording of payments in cash /by cheque/ through Treasury Bills

• Recording of contra entries for remittance in to bank/withdrawal on self cheque/ transfer from bank to bank

• Bank Reconciliation

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Procedure at the end of the year

• Depreciation

• Conversion of Capital Work in Progress to Fixed Assets in respect of completed works

• Recording of closing stock’

• Provision for doubtful receivables

• Provision for goods/ services received during the year but bills received in April of next year

• Reconciliation with the Registers kept in other departments

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Implementation Status

• Implemented in All Local Self Government Institutions in Kerala

SAANKHYA Integration with other applications

SAANKHYA

SULEKHA SANCHAYA

SACHITHRA STHAPANA

SOOCHIKA

SANKETHAM SEVANA

SAKARMA

SUBHADHRA SUGAMA

SAANKHYA

Integration With Priyasoft

• 2592 Saankhya Account Heads mapped with priyasoft Account Head

• Need more clarity regarding mapping

• State specific scheme can be mapped with following Receipts heads only (because only for these heads the provision is given)

'1601','8550','8658', '0049','7610','8011','8009','8443','0075','6004','8782','8671‘

• For Own Resource in PRIASoft it is already mapped with all the major heads and State doesnt have the permission to map the Own Resource

THANK YOU