Going digital can help MSMEs to reduce burden of GST compliance
Small and medium-sized businesses make significant contributions to the GDP and employment generation in the country. Therefore, it is important that their health and growth are nurtured equally. However, MSMEs have been experiencing the increasing burden of compliance under GST. In a country like India, most of the small businesses are unable to quote a price on their products and do any paperwork. Small and medium enterprises rarely can afford to have computer systems and accountants to comply with the GST compliance requirements. Further, SMEs with low turnover and external GST face trust issues.
Ever since the Goods and Services Tax was introduced, it led to a rise in the demand for accounting software and GST accounting mobile apps to tap into the ever-growing number of mobile users. However, several SMEs are still struggling to prepare for the substantive increase in the compliance requirements.
The large number of GST returns that need to be filed is yet another reason contributing to the hardships of small and mid-sized business owners. Even now there are countless micro, small and medium sized businesses that come within the GST ambit and need a proper digitised GST accounting and invoicing solution. While some enterprises have already taken to technology, others are still way behind and need to catch up.
Why MSMEs find complying with GST rules difficult
Even in present times, a large number of businesses are using paper and pen to make their bills. They do not have proper records for their business, including profits, stock adjustments and receivables etc. In the process, they have come to rely heavily on their accountants and find accounting software highly complex to use which requires training.
In today’s time, it has become imperative that MSMEs go digital. With simple applications for managing billing, maintaining an inventory of the stock, recording receivables etc, these businesses can stay ahead of the curve. Moreover, filing GST is an arduous task for many of the MSMEs without a digital solution, as they waste a lot of time in compliance work.
"Digitisation has become an inevitable necessity for MSMEs to fulfil the GST compliance requirements. Several accounting applications and software have extensively helped in the transition of many MSMEs to digital in a cost-effective and easier manner, rendering them more organised. Such applications are a straightforward solution and help in collecting payments on time, managing business finances, maintaining inventories and generating GST reports," BUSY Infotech founder Rajesh Gupta said on the significance that digitization holds for MSMEs.
Benefits that going digital will offer to the MSMEs:
- Mobile apps and accounting software are less time-consuming. Due to their higher speed, documents can be easily uploaded in no time.
- Compared to manual filings, the filing process has fewer hassles in the mobile apps and so it's user-friendly.
- Navigating apps is an easier process and the interface is easy to understand; hence users can file their returns more conveniently.
- Accounting applications are cost-effective and so, filing on these app portals involve lesser accounting and compliance costs for the MSMEs.
- With mobile applications and accounting software, it’s easier to keep records of every activity of the taxpayer. All documents are stored safely in one place and can be accessed here whenever required.
- Mobile apps generate automatic reports which are easy to comprehend and using which taxpayers can curate business operations.
- Applications also send in regular notifications and updates to the taxpayer which ensures the timely filing of GST returns.
- Mobile apps also come with pre-installed videos of the filing process, which can be watched to learn the procedure without any hassles.
In addition, going digital will help MSMEs gain access to the knowledge of GST best practices; achieve operational excellence across wider geographical locations via real-time insights; ensure resource conservation, low carbon impressions and higher energy efficiency; achieve targeted marketing reach and corresponding sales; and help gain financial prudence with mitigated risks and better decision making.
READ MORE: Why digital accounting is important for MSMEs post-Covid era
