The accounting to fix first
- Close every month within a few days, not months later.
- Reconcile bank, debtors, creditors and GST each month.
- Count stock and reconcile to the books.
- Get product-wise and customer-wise margin out of the system.
- Separate personal and business transactions.
- Prepare a monthly pack the owner can read in ten minutes.
Tax and compliance points that matter in a downturn
| Area | Why it matters in a turnaround |
|---|---|
| Statutory dues (TDS, PF, ESI, GST) | Default attracts interest, penalties and personal consequences, and shows to lenders. Pay these first. |
| Treatment of business losses | Losses can generally be carried forward and set off under the rules in force; keep returns filed on time to preserve the right. Check current provisions. |
| GST input credit | Credit tied up with supplier filings or blocked affects cash. Reconcile monthly. |
| Advance tax | Plan the cash even in a thin year. |
| MSME payment rule | Delayed payments to small suppliers can affect deductions and carry interest. |
| Write-offs and bad debts | Treatment depends on conditions; take advice before booking. |
Fit it into the turnaround
Treat accounting as week 1 and 2 work, and tax as part of the 13-week cash forecast. Surprises from late filings can undo the cash gains of the first month.
Related owner pages: GST input credit stuck, TDS credit missing from your tax statement and advance tax cash planning.
CFOAvatar complements every turnaround
A human CFO sees your business at the review. Problems do not wait for the meeting. CFOAvatar is connected to your accounting data and checks your numbers every day, so the scoreboard in a turnaround is always current. Ask it what an owner in trouble would ask:
What owners say after the numbers started talking
Their assistance and guidance on some complex accounting transactions, solidifying our internal control structure and the resulting opinions on our financial statements have been invaluable to our business success.
Soatech has been an excellent partner to ideasurge for the last five years as our one-stop shop managing Accounts, Audit and Payroll. In addition, they have been instrumental in coordinating with a prior accounting firm and getting us up to date with all regulatory and statutory needs. Soatech now seamlessly operates as an extension of ideasurge for all Finance functions.
Their structured MIS reports have given us clear visibility into our business performance, enabling faster and more informed decisions. The budgeting and cash flow monitoring system introduced by their team has helped us plan our funds more effectively and manage our operations with greater confidence.
Quoted word for word from our clients. Read more client words →
Questions owners ask us
What is turnaround accounting?
Bringing a struggling business's books up to date, reconciled and detailed enough to find the cause of its problems and track the recovery.
Can losses be carried forward?
Business losses can generally be carried forward and set off against future profits under conditions, including timely filing of returns. Check the current law and your own position.
What should I pay first when cash is short?
Statutory dues and salaries, then critical suppliers, with a plan for the rest.
Do I need an audit during a turnaround?
If your company or turnover requires it by law, yes. Reliable, timely numbers are in any case essential.