Non-banking finance companies function the same like a bank, except the deposit. That’s why, they also take huge responsibilities in terms of business. Hiring the right type of accounting software makes this hectic task, smooth and hassle-free.
Non-bank financial companies or NBFCs are the commercial organizations that provide all kinds of banking services, but is not registered as a bank. They are not allowed to take deposits from the public depending on the jurisdiction. However, they have to follow all the banking policies before making any function.
NBFCs are more a business than a finance company. They cannot accept demand deposits, cannot issue demand drafts and cheques drawn on itself. Unlike banks, NBFCs are amalgamated under the company act of 1956. They cannot accept or renew public deposits for 12 months to 60 months. Their deposits are not insured. The repayment of deposits is not guaranteed by RBI.
Still, these firms carry a significance, especially in the rural areas for their simplicity and plays an important role in the development of economy. Accounting is the major thing here, which includes monetary transactions, the loan and EMI calculations, the debt clearance and many other functions. An accounting software makes this job easy by offering a wide range of applications that can acclimatize work flow as per requirement. It is used to assess the economic feasibility of the business and allows the company to enter in expenses like payroll and equipment expenses and revenues like income from sales.
NBFCs also purchase accounting software for the proper administration. But before deciding which software to use, you should know about different types of software.
Our market provides many types of NBFC Financing software, some of them are simple, some complex. They follow two main modules. That are-
Core modules These are the system and the process of using a finance software.
Payable Accounts- It is the series of accounting transactions which enables the payment of money the company owes. The bills are also entered here.
Receivable Accounts- This series of accounting transactions enters the billing report of consumers who owe money to any person or organization. It is generally done by writing an invoice and mailing or delivering it to each customer.
Billing Service- It is a procedure of sending accounts documents or invoices to clients.
General ledger- Also known as the nominal ledger, is the financing record of a business for the accounts including present possessions, static belongings, obligations, income and expenditure products, gains and losses, kept by using double-entry book keeping. It also consists of the records of collection and payment of money.
Stock/Inventory- This is the list of goods and materials held available in stock.
Some of the non-core modules offered by the NBFC Financing software are below,
Monetary Outlay- Expense are like assets or liability. The expenditures dealing with trade are entered here.
Collecting Debt- Here, the company gives efforts to accumulate unpaid bills.
Other things to be discussed in the next part.
Leon Grant has performed a series of interview with the non-banking finance company of many countries. His survey has proved that the NBFC financing software is popular because they have some inbuilt features which makes the work smooth and fuss-free.
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