#gstblue

[gstblue-blog]

'GSTBlue is one of the leading Accounting Software provider in Surat..We offer a complete GST ready accounting for all type of businesses like Textile, yarn, Embroidery, Pharmacy, Chemical & son on..For more details Contact Us !!'

[gstblue-blog]

Important GST Definitions, Terms and Glossary

The GST is ready for implementation and brings with it a slew of changes that indirect tax payers and business owners need to get familiar with. Not only are businesses required to register themselves under the GSTN, they must also reassess their business in accordance with certain new terminologies to determine how the GST impacts them. A few of the important GST definitions and the registration process are briefly specified here to help you get started.

GST Terms To Know 

Certain essential definitions have been mentioned under the Model GST Law, which was first released in June, 2016, and then modified and released again in November, 2016.

Business : Definition: Business refers to trade, commerce, manufacture, profession, vocation or any other similar activity, including transactions related or incidental thereto, irrespective of volume or frequency, as well as supply of goods/ services in connection with commencement or closure of business.

The definition is quite wide and seems to be borrowed from State VAT legislation. Some parts have been modified to include transactions in services.

Place of Business : Definition: (a) A place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a taxable person stores his goods. (b) A place where a taxable person maintains his books of account. (c) A place where a taxable person is engaged in business through an agent.

Since GST is a destination-based indirect taxation system, the place of business is a critical factor in determining the business model and taxation dues of a business that is present in many places.

Time of Supply : Definition: The time of supply is the earlier of the following dates: (a) Date of issue of invoice by the supplier or the last day by which the supplier is required to issue invoice or (b) Date of receipt of payment.

The time of supply is important since it determines the point of taxation i.e. the point in time when goods / services have been deemed to be supplied or services have been deemed to be provided and hence SGST or IGST apply.

Goods : Definition: “Goods” refers to every kind of movable property other than money and securities, but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply.

While the term “movable property” has been mentioned, it has not been defined in the Model GST Law, and one needs to refer to the General Clauses Act 1897 for this. It does not include intangible property such as intellectual property rights (copyrights, trademarks). Also, an item needs to be movable for it to be classified as goods.

Services : Definition: “Services” means anything other than goods.

The GST Model Law clarifies that services include intangible property and actionable claims but does not include money. There are separate definitions for supply of software, works contracts and leasing transactions, even though they fall in the ambit of services. The inclusion of “actionable claim” may create confusion where financial and commercial transactions are involved.

Software includes the development, design, programming, customisation, adaptation, upgradation, enhancement, implementation of information technology software, and is treated as a service.

As far as leasing transactions are concerned, a finance lease would be considered as supply of goods, and an operating lease would be considered as a service under the Model GST Law.

Works Contract : Definition: It is an agreement for carrying on building, construction, fabrication, erection, installation, fitting out, improvement, modification, repair, renovation or commissioning of any moveable or immovable property. Work Contract has been defined as a “Service”, simplifying its taxation procedure.

Supply : The GST has three new definitions related to “Supply”, i.e., Principal Supply, Composite Supply and Mixed Supply.

1. Principal Supply Definition: It is the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary and does not constitute, for the recipient an aim in itself, but a means for better enjoyment of the principal supply. It is generally the dominant supply in a bundle of supplies or a bundle of services. For example, in a mobile phone and the charger, the mobile phone will be the principal supply.

2. Composite Supply Definition: a supply made by a taxable person to a recipient comprising two or more supplies of goods or services, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply.

For example, goods packed with insurance and packing material is a composite supply, with the good being the principal supply. Here, there is a main supply and supporting supply, which normally go together in the course of business and enhance the enjoyment of the main supply.

3. Mixed Supply Definition: Two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply.

Take the case of a corporate gift pack that consists of a tie, a wallet and a pen. These are bundled in a package supplied for a single price. None of the items is dependent on the other, nor necessary to be purchased together. This is a case of a mixed supply, where the individual items, which can also be sold separately, are sold together.

Aggregate Turnover : Definition: “aggregate turnover” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess.

Reverse charge tax is a system where the recipient of the supply (goods and services), i.e. the client, is liable to pay the tax. Inward supplies are input supplies used as an input for manufacturing the goods or providing the service. Tax paid on input expenses can be adjusted against tax paid on output supplies, through input tax credit. This means that it cannot be treated as a part of the aggregate turnover.

Read more about GST at our GST blog for India.

[gstblue-blog]

Determining the GST Tax Structure

Determining the GST Tax Structure

The GST tax structure will bring about a drastic change in the current indirect tax system. Currently, tax barriers have created a fragmented Indian market. This has resulted in a cascading effect of taxes on cost making indigenous manufacture less profitable. Also, the complex multiple taxes have raised the cost of compliance considerably.

The GST tax structure will comprise of the Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST) and Integrated Goods and Service Tax (IGST). The four slab tiers of the GST tax structure will be 5 per cent, 12 per cent, 18 per cent and 28 per cent. The  lowest rates will be applicable for essential items and the highest for luxury and demerit goods. Moreover, these include SUVs, luxury cars and tobacco products. GST may go up to 40 per cent after the GST Council proposed raising the peak rate.

Service tax will increase from its current levels of 14.5 per cent which will be negative for service industries like airlines, telecom and insurance. Currently, FMCGs pay about 24 to 25 per cent on excise duty, VAT and entry tax. Under the GST tax structure, this may be reduced to 18 per cent, but at 28 per cent this may disappoint the market. Also, telecom will be affected with a rate of 18 per cent from the current 15 per cent. An additional tax up to 1% will be levied on the inter-state supply of goods. Therefore, these goods do not come under VAT and have no input tax credit.

Central taxes to be absorbed under GST are:

Central Excise Duty

 Additional Excise Duties

Service Tax

Additional Customs Duty (Countervailing Duty)

Special Additional Duty of Customs – 4% (SAD)

Central Surcharges and Cesses in the nature of taxes on goods/services like cess on rubber, tea, coffee and national calamity contingent duty

State taxes to be absorbed under GST are:

State VAT/Sales tax

Entertainment tax

Luxury tax

Taxes on lottery

Betting and gambling

Tax on advertisements

State cesses

Surcharges in the nature of taxes on goods/ services, Octroi and entry tax and purchase tax

Excise and service taxes will be replaced with CGST, Local VAT and other state taxes will be replaced with SGST. CST will be replaced with IGST. Therefore, IGST is the total of CGST and SGST.

Alcohol and tobacco will have a separate excise duty in addition to GST. Petroleum and petroleum products will continue to be taxed under existing laws and will be incorporated into GST at a future date.

GST has the potential to boost India’s GDP by as much as 2 per cent and has been considered an unprecedented reform in the history of modern global tax. Taxpayers will not have the burden of multiple compliances under various states. With the GST tax structure, there will be a single registration and single return. This will help build and expand upon the Make in India initiative by the Government of India by attracting FDI and reducing costs. Hence, these costs are manufacturing costs in the form of reduced compliance cost and taxes.

Similar to the GST law, the CGST, SGST and UTGST laws will be addressed and strengthened at the levels of the Centre, States and Union Territories. Hence, the centre will introduce the CGST Bill and SGST bill shortly in the Legislative Assemblies.

Central and State officials will determine which goods and services will fall in which tax brackets and will be carried forward to the GST Council for approval. Also, they will decide which goods and services would attract a cess on top of the peak rate. This will compensate states for any revenue lost due to the implementation of GST in the first five years. Moreover, the government intends to roll out GST from 1 July, 2017. Therefore, GST will help with removing trade barriers and facilitating the ease of doing business. 

[gstblue-blog]

How Accounting Standards Are Developed In India

Concept of Accounting Standards:

We know that Generally Accepted Accounting Principles (GAAP) aims at bringing uniformity and comparability in the financial statements. It can be seen that at many places, GAAP permits a variety of alternative accounting treatments for the same item. For example, different methods for valuation of stock give different results in financial statements.

 Such practices sometimes can misguide intended users in taking decision relating to their field. Keeping in view the problems faced by many users of accounting, a need for the development of common accounting standards was aroused.

For this purpose, the Institute of Chartered Accountants of India (ICAI), which is also a member of International Accounting Standards Committee (IASC), had constituted Accounting Standard Board (ASB) in the year 1977. ASB identified the areas in which uniformity in accounting was required. After detailed research and discussions, it prepared and submitted a draft to the ICAI. After proper examination, ICAI finalized them and notified for its use in financial statements.

Meaning of Accounting Standards:

Accounting standards are the written statements consisting of rules and guidelines, issued by the accounting institutions, for the preparation of uniform and consistent financial statements and also for other disclosures affecting the different users of accounting information.

Accounting standards lay down the terms and conditions of accounting policies and practices by way of codes, guidelines and adjustments for making the interpretation of the items appearing in the financial statements easy and even their treatment in the books of account.

Nature of Accounting Standards:

On the basis of forgoing discussion we can say that accounting standards are guide, dictator, service provider and harmonizer in the field of accounting process.

(i) Serve as a guide to the accountants:

Accounting standards serve the accountants as a guide in the accounting process. They provide basis on which accounts are prepared. For example, they provide the method of valuation of inventories.

(ii) Act as a dictator:

Accounting standards act as a dictator in the field of accounting. Like a dictator, in some areas accountants have no choice of their own but to opt for practices other than those stated in the accounting standards. For example, Cash Flow Statement should be prepared in the format prescribed by accounting standard.

(iii) Serve as a service provider:

Accounting standards comprise the scope of accounting by defining certain terms, presenting the accounting issues, specifying standards, explaining numerous disclosures and implementation date. Thus, accounting standards are descriptive in nature and serve as a service provider.

(iv) Act as a harmonizer:

Accounting standards are not biased and bring uniformity in accounting methods. They remove the effect of diverse accounting practices and policies. On many occasions, accounting standards develop and provide solutions to specific accounting issues. It is thus clear that whenever there is any conflict on accounting issues, accounting standards act as harmonizer and facilitate solutions for accountants.

Objectives of Accounting Standards:

In earlier days, accounting was just used for recording business transactions of financial nature. Its main emphasis now lies on providing accounting information in the process of decision making.

For the following purposes, accounting standards are needed:

 (i) For bringing uniformity in accounting methods:

Accounting standards are required to bring uniformity in accounting methods by proposing standard treatments to the accounting issue. For example, AS-6(Revised) states the methods for depreciation accounting.

(ii) For improving the reliability of the financial statements:

Accounting is a language of business. There are many users of the information provided by accountants who take various decisions relating to their field just on the basis of information contained in financial statements. In this connection, it is necessary that the financial statements should show true and fair view of the business concern. Accounting standards when used give a sense of faith and reliability to various users.

They also help the potential users of the information contained in the financial statements by disclosure norms which make it easy even for a layman to interpret the data. Accounting standards provide a concrete theory base to the process of accounting. They provide uniformity in accounting which makes the financial statements of different business units, for different years comparable and again facilitate decision making.

(iii) Simplify the accounting information:

Accounting standards prevent the users from reaching any misleading conclusions and make the financial data simpler for everyone. For example, AS-3 (Revised) clearly classifies the flows of cash in terms of ‘operating activities’, ��investing activities’ and ‘financing activities’.

(iv) Prevents frauds and manipulations:

Accounting standards prevent manipulation of data by the management and others. By codifying the accounting methods, frauds and manipulations can be minimized.

(v) Helps auditors:

Accounting standards lay down the terms and conditions for accounting policies and practices by way of codes, guidelines and adjustments for making and interpreting the items appearing in the financial statements. Thus, these terms, policies and guidelines etc. become the basis for auditing the books of accounts.

[gstblue-blog]

Why GST Is Good For Retailers?

With the implementation of GST, three sectors will benefit the most:

Retail

FMCG

Consumer companies and Logistics Business

It is a comprehensive tax imposed on manufacture, sale and consumption of goods and services at a national level.

The Bill’s draft does away with the additional tax on the movement of goods across state boundaries. States will be compensated for revenue losses in the first 5 years of implementation of GST and a mechanism has been put in place to decide on conflicts between states, if any.

How Can Output Tax Benefit Your Business?

As a GST registered the business, you will hold the tax which you have collected from your customers for up to 4 months before you are required to pay it to us. This money could be placed in a business deposit account to earn interest for your business.

You must remember though, that this money doesn’t belong to the business and should not be used to supplement cash flow.

Example of a GST Calculation:

Importer

First, the importer buys a television from overseas for £400(Rs. 28874.50) but experiences a further cost of £200(Rs.14437.25) in packaging, transport, insurance fees and other Customs duties. These costs are considered to be part of the value of the television and, at the time of import, the importer must so pay £30 in GST, signifying 5% of £600(Rs. 43311.75). On the other hand, since the importer can reclaim the £30 he paid as GST to customs, the net cost is only £600(Rs. 43311.75).

Importer to wholesaler

When the importer adds his mark up of £200(Rs.14437.25), his selling price to the wholesaler becomes £800, to which GST of 5% (£40- Rs. 2887.45) is added, making a GST inclusive price of £840(Rs.60636.45). However, the cost to the wholesaler is only £800 (Rs. 57749.00), since he is also able to reclaim the £40 (Rs. 2887.45) of GST.

Wholesaler to Retailer

After adding his markup of £200(Rs.14437.25) the wholesaler sells the television to the retailer for £1,000 (Rs. 72186.25) plus 5% GST of £50 (Rs. 3609.31), making the selling price £1,050(Rs. 75795.57). Again, the retailer is able to reclaim the GST of £50(Rs. 3609.31), so the actual cost to him is only £1,000 (Rs. 72186.25).

Retailer to consumer

Finally, the retailer sells the television to a consumer and applies his markup of £200(Rs.14437.25), making the selling price £1,200 (Rs. 86623.50) to which 5% GST (£60- Rs. 4331.18) is added. The consumer pays £1,260 (Rs. 90954.68)(GST inclusive) and pays the full cost of the £60 (Rs. 4331.18) of GST in the final selling price.

Since all the registered traders involved in the sale have been able to claim back the GST paid on the television, there is no cascading tax effect on the consumer, who doesn’t pay GST on GST.

 Benefits of GST on Retail Sector:

Increased efficiency in supply chain

As the retail business can be carried out in every state upon single registration, the retailer will not have to maintain warehouses in every state and this will be very useful regarding the cost to the retailer. The transportation industry will show as they would carry more goods from one state to the other as the transfer goods are much easier under GST. The lead time will also reduce in transporting the goods as the inter-state boundaries would be more free-flowing. GST will help the retail sector become more proficient in their operations.

Avoiding Duplicate Product:

If any suppliers deliver the duplicate products to the customers and if customers complain about it then the government will track the record of delivering the duplicate products and take a strict action towards the suppliers. So now the customers or retailers will not get cheated by anyone.

Tax on Promotional Items and Gifts

In the GST model, any supply without consideration will attract tax and so, everything will have to be accounted for. The retailers would give out gifts and promotional items with products as a part of their marketing strategy which used to be tax-free in the current taxation system. Now, the GST gets implemented from 1st July 2017, so no such rule will be applicable and the retails will have to pay tax on the gifts and promotional items as well, thus, rethink their promotional strategies.

Hyper Local E-commerce:

Nowadays, most of the E-commerce sites are moving to the new phase which is its new strategy. They are coordinating with the retailer so that they can easily run their business with the help of local business retailer. Thus, local business retailer will get benefited from this as well as the reputation will get increase as they are linked to top e-commerce site.

Example: Top online food ordering sites like Swiggy, Foodpanda, Zomato, etc. They are linked with local business restaurants and delivering the food to their customers very easily. So, the local restaurant will get benefited through this and also their reputation will get increase.

Growth of Retail Market

GST will lead to the association of markets as it will simplify the state and the central tax and eliminate all the confusion of taxation in different markets. The retailers can easily expand their business beyond boundaries as they have to register their business only once and then can carry operations in all the states. This will also contribute towards the growth of the retail market and help boost the economy of the country.

Better Strategies

GST will force the retailers to rethink their supply chain strategies and re-model their network as it will open a lot of doors and opportunities for retailers to expand their business. It will give them the freedom to draft better business strategies and implement it for further growth of the retail sector.

Reduce Complications

The retailers would be able to carry out the business with more ease as the taxation, and other policies would be effective under the new GST rules, and they would not have to waste their time in paying various taxes and waiting to fulfill all other policy requirements of the current taxation system. But doing manually all the tax related documentation is tough. So, we are offering GST READY Billing software so that you don’t need to do all the documentation manually. You just need to purchase our Desktop or POS model software so that you can carry out the business with more ease. For more details, you can visit our website: http://gstblue.com

[gstblue-blog]

IMPACT OF GST ON PHARMACEUTICAL INDUSTRY

Goods and services tax (GST) has been in place for over a month now. With the passage of time, more aspects of it are becoming clear. One of the questions that have come up is what it means for the affordability of medicines. GST replaces a whole host of taxes – and chiefly of relevance to medicines, the old value added tax and excise duty. All invoices – of medicine manufacturers and traders – only reflect a GST from July 1, 2017. But what does that mean in practice?

Let us first understand how GST on medicines will affect the consumer. The GST rate on a commodity has been fixed such that the incidence due to the new rate is approximately equal to the earlier tax incidence due to VAT and excise duty. VAT was 5% and excise duty – where applicable – was 6% of 65% of the MRP. The MRP included the VAT and excise duty. No seller can sell at more than the MRP.

The GST on formulations (tablets/capsules/liquids) used in allopathic medical care and other health-related items fall in three categories: GST at 12%, 5% and zero. Human blood and its components, and all types of contraceptives have no GST on them. The GST on formulations is 12% for most medicines, as compared to the earlier 9.5% effective rate (VAT + excise duty). A few medicines which earlier had no excise duty, like ORS, vaccines and insulin, but had 5% VAT, now have a 5% GST incidence.

Post GST implementation, prices of medicines with 12% GST will have increase by about 2.30%. Prices of medicines with 5% GST will have no change from before. In summary, medicines with 12% GST will have a 2.30% increase over pre-GST MRP. Medicines with 5% GST will continue to be sold at the pre-GST MRP.

This is the scenario in a state like Gujarat and is true for much of India. In a few states, VAT and excise duty are at different rates on certain items. If VAT and excise duty were both at zero, the increase post-GST will be zero, 5% or 12% depending on which GST category the item is in now. If excise duty was at the usual rate of 6% and VAT was zero, the increase in MRP post-GST will be 0.90 % or 7.6%, depending on whether the item is now in the 5% or 12% GST slab.

The government has increased the ceiling prices of essential medicines listed in the National List of Essential Medicines (NLEM). The new ceiling prices reflect the 2.3% increase for price-controlled drugs – that is for NLEM drugs in the 12% GST category. Price control of NLEM drugs incidentally covers less than 12% of the domestic pharma market of more than Rs 1 lakh crore. Drugs not under price control are allowed a 10% price increase every April as per the Drug Price Control Order, 2013. However, the government did not allow the 2.3% price increase due to GST for these drugs not under price control and has asked drug companies to maintain the same MRP from July 1 too. Pharma companies have been allowed to put a sticker on medicines made before July 1, 2017 for NLEM 2015 drugs. For medicines made after July 1, 2017, the new revised MRP for NLEM 2015 drugs will be printed on the label reflecting the 2.3% increase.

If we look at the medicines in the 5% GST category, the government has made no change on the MRP and therefore there is no need for manufacturers to use new price stickers. During the transition to the GST regime, for medicines made before July 1, some manufacturers have not changed the MRP as it is a tedious and messy procedure to put stickers, etc. Which means they are absorbing the loss of about 2.3% on the batches made before July 1 and lying in stock with them as on July 1, 2017.

 For medicines made on or after July 1, 2017, all labels on medicines will reflect the price increase. So in 3-4 months practically all medicines in stock will be – it is expected – of only batches made from July 1, 2017. The revised MRP on the label on these medicines will be inclusive of GST.

Please note the GST is on the transaction cost – that is the price charged at every stage. Therefore, GST will be charged by the manufacturer, wholesaler and distributor on his/her sale price and not on the MRP. However, the MRP is inclusive of the GST; therefore retailers selling at or less than the MRP will have to back-calculate the GST accordingly.

Now the question is, who finally pays for the GST on the medicine? The end user is the patient. The patient always paid the taxes. Under the GST regime, it is explicit. The example given below will help you understand this.

For example, if a hospital with GST registration buys Rs 100 worth of a medicine from Alpha – where Alpha is a pharma manufacturer/trader – Alpha’s invoice to the hospital will be Rs 100 plus 12% GST = Rs 112. The GST collected by Alpha from the hospital is Rs 12. Alpha will remit to the government Rs 12, less any input credit (that is any GST paid on Alpha’s purchases). Further, if the MRP on the medicine’s label is Rs 140, the hospital’s/retailer’s invoice to the patient will be Rs 140, or Rs 125 plus Rs 15 as GST (as 12% of Rs 125 is Rs 15). The hospital collects Rs 15 as GST. But the hospital has already paid Rs 12 to Alpha. So even though it collects Rs 15 from the patient, it will pay only Rs 3 to the government (since it already paid Rs 12). So in effect, the patient picks up the GST tab of the hospital (Rs 3) and of Alpha (Rs 12).

If a hospital (or a retailer) does not have GST registration, it cannot sell medicines bought from outside the state in which the hospital is located. So a hospital without GST registration and located in Tamil Nadu, cannot buy and sell medicines bought from Gujarat. However, if the hospital does not have GST registration, it can still distribute for free medicines bought from outside the state.

If you include the GST on APIs (Active Pharmaceutical Ingredients), which is the raw material, it does not make a positive difference to the consumer. Most APIs are in the 18% GST category, matching the effective VAT plus excise duty incidence of 17.6% before the GST regime. Some APIs are in the 5% GST category. GST on formulations is at 5 or 12%. As a formulations manufacturer, if I buy API at Rs 100 say plus Rs 18 (18% GST rate), but if I sell the formulations made from the API at Rs 200, I collect from my buyer Rs 24 (GST rate 12%) in addition. I remit to the government Rs 24: Rs 18 through the API manufacturer on paying his bill of Rs 118 and Rs 6 directly to the government. As before, all GST paid to the government is collected from the end consumer or patient: nobody in the chain from API manufacturer or dealer to formulations manufacturer-dealer-retailer really pays out of his/her pocket in the final analysis.

So, it appears that GST does not benefit the consumer by price decrease. If one has followed the above analysis, how medicine prices can decrease if everybody at every stage maintains the same profit margins. We have seen the GST rates of 12% on formulations was about 2.3% more than the incidence of tax before GST. There is no way prices can come down because of GST per se, at least not on medicines in the 12% GST category.

So there is no conceivable ‘passing on of benefits to the consumer’ because there is no benefit to pass. Neither does the supply chain benefit in any way, as this business of input credit was available pre-GST too. In fact, manufacturers and traders will be filing returns every month and those small traders who are not computer savvy will need to become savvy or depend on competent persons for help.

Now the question arises, who does the GST regime benefit? Tax collectors, that is governments at the Centre and state levels will be happy. In due course, if not immediately, all businesses, manufacturers and traders with an annual turnover of more than Rs 20 lakh will pay tax and will be ‘captured’ in the tax net. But there will be enough procedural and legal wrangles between taxpayers and the governments that collect the tax, increasing the burden on courts and increasing the work, and income, of at least two professions: chartered accountants and lawyers. Absolute tax revenues will increase in the country. How such increased revenues are used for people’s welfare depends on the governments. Interstate commerce will pick up: the pile-up of trucks at the state border will be less as also the regime of road permits – and associated corruption that you had to face if you had to sell interstate within India – will be history. It already is for the most part. In one year we will know how things are working out.

[gstblue-blog]

CHOOSING THE RIGHT SMALL BUSINESS ACCOUNTING SOFTWARE

Accounting software makes it easier for you to track your business's financial health and monitor the money moving in and out of your accounts. It can create invoices, track expenses and generate a variety of reports that help you analyze your business's performance from various angles. Many can also help you track your bills and manage your inventory or projects.

Choosing accounting software can be challenging. Each program includes a different set of features, and most offer multiple pricing plans to choose from, which also vary by feature, number of users or another factor. Here are three items to keep in mind when selecting accounting software for your business

Would you prefer inexpensive, basic accounting software or an application that costs more but includes extra features?

How many users need to access the software? Do you prefer a cloud-based system you can access anywhere or desktop software? Do you need it to have a mobile app?

What do you need the accounting software program to do? Do you need both accounts receivable and accounts payable tools? Which reports do you need it to generate? Do you need it to track inventory? Do you need it to include ancillary services, like time tracking, project management and payroll?

If you already know what you need and only want to see our recommendations for the best accounting software, visit our website GSTBlue

HOW MUCH DOES ACCOUNTING SOFTWARE COST ?

Accounting software varies in cost, depending on the number of features included, the number of users supported and other such factors. Most accounting software companies offer cloud-based software as a service rather than software licenses, and charge a monthly subscription fee.

You can usually choose from multiple plans, with paid packages. If you're willing to pay for the software annually rather than monthly, discounted rates are often available.

At GSTBlue, we believe in profiting our potential clients & so do we take care of their budget & hence provide them the best accounting software at best price in surat,Gujarat,India

More expensive plans often include advanced features such as expense tracking, sales tracking, recurring invoices, automatic past-due billing, team functionalities, payroll services, advanced reporting capabilities, inventory tracking and purchase ordering. Many accounting software companies offer integrations to augment the software's capabilities or to connect it to another business program, though often at an additional cost.

Several companies offer a free version of their accounting software, though these usually have either basic features or limit the number of users, clients or transactions. Some free accounting software providers make their money from advertisements placed within the software or from the paid add-on services they offer. These programs are useful if your business is very small or if you want to take the software for a longer test run than the trial period allows.

[gstblue-blog]

IS GST & DEMONETIZATION GOING TO IMPACT GUJARAT ELECTIONS 2017 ?

Traditionally, Gujarat has always been a state where trading has been the principal business activity. Its transition towards emerging as a manufacturing giant is a more recent phenomenon. The large trading community has been averse to change, and any policies that threaten the status quo have always made the business community nervous.

The introduction of GST in India has been the most significant economic reform since independence, and most agree that in the long-term it will be beneficial.

However, it’s the short-term impact that has caused maximum angst among traders who are still trying to come to terms with the negative impact of demonetization on their businesses.

This is bad news for the BJP as the dates for election in Gujarat draws closer. The party has failed to placate the trading community which forms a significant segment of voters. Congress is trying to maximize its political gains riding on this discontent.

SO HOW IS BJP DEALING WITH THIS CHALLENGE?

Economics and politics share a close relationship, and so, the process of introducing and implementing GST has largely been an outcome of that relationship. All political parties, national and regional, have tried to draw maximum political mileage for themselves and their respective states in the run-up to arriving at a reluctant consensus.

As the ruling party, BJP rushed introducing GST in the hope of political gains but is now having to face general discontent. The timing has been bad.

Gujarat assembly elections are crucial to BJP, and the PM, Narendra Modi in particular. The result in Gujarat will impact how the opposition responds and comes together to put up a fight in 2019. With most small traders and businessmen unhappy with GST slabs, the government has been in firefighting mode and has been forced to shift some items to lower tax rates.

The states are unhappy as this might impact their revenue collections. On the other hand, the business community wants the government to do more. But with Legislative assembly elections in Himachal Pradesh and the forthcoming one in Gujarat, the model code of conduct is preventing BJP from announcing any further steps.

The trading community in Gujarat has made up its mind, and any changes at this stage are unlikely to influence the voting results. Furthermore, 2019 is too close for the positive impact of GST to begin showing results, and this is a disadvantage for BJP.

So is the Congress going to win in Gujarat? That’s unlikely. The trading community may be unhappy, but they also realize they have more to gain with a business-friendly BJP at the state and centre than a rudderless Congress.

In the extended time that Congress has been out of power in Gujarat, it has not been able to rebuild its political base at the grassroots level. Today, the party is devoid of any clear economic or political agenda and is only riding the anti-BJP sentiment in the state. That’s unlikely to deliver the seats needed to come back to power.

People have largely made up their minds on caste lines. Most may be unhappy with demonetization and even the GST, but they still agree that there is no alternative to BJP at the centre and in Gujarat. The trading community, comprising mostly men, will vote based on their opinion on demonetization and GST, while female voters are likely to vote along caste lines.

That’s why predicting results in this election is difficult. Development was a common agenda in previous two elections where general opinion was unanimous, this time around; divisions of caste and economic fallout of central decisions are going to impact the voting pattern.

Congress has no real agenda of its own other than reacting to BJP’s moves and trying to exploit the negative sentiment. Congress is expected garner higher vote share than in 2012, but will it be enough to dethrone BJP remains to be seen.

[gstblue-blog]

5 Basic Things about GST Everyone Should Know

If you are a business, it is nearly certain you deposit some tax other than income tax. It could be in the form of service tax, excise duty, VAT or some version of custom duty. These taxes are called indirect taxes. Nearly all of these taxes will now be replaced with GST.

But the implementation of GST is not merely a change in tax. GST is an overhaul in the way in which indirect taxes will ‘levy’. Currently, excise duty is levied on manufacture, VAT is levied each time goods change hands and value is added to the product. CST (Central Sales Tax) is charged when goods move between states. This way a finished product can have excise duty, VAT, CST added to its cost before reaching its final consumer. All of these have a different ‘point’ of tax levy. These different taxes will now give way to GST.

When is GST Levied?

The most important thing about GST then is its point of levy. Under GST, point of tax levy is ‘supply’. What constitutes a supply has been defined in the GST Act. Supply means sale of goods and services. A supply of goods and services can take place even without an actual sale. Supply will also include, transfer, exchange, and barter, rental, lease and also a supply made to an agent or to a branch. So if you are a business, engaged in any of the above, GST will replace all taxes paid by you on purchases, and mandate you to levy GST on your supply. In this context the government may notify some services & goods, which will not be considered a supply and hence will not attract GST. So the first step would be to identify if your business has made a supply.

Types of GST

Once it has been established that your business has made a supply, the next step is to find out whether it is an intra-state or an inter-state supply. If the origin state is different from the destination State, it is considered an inter-state supply. This is the reason why GST is also called a destination-based tax. Those who make inter-state supplies have to mandatorily register for GST. Most supplies are likely to be taxed at the rate of the destination state. Supplies made outside India would not attract any GST, however GST registration may still be required for these supplies. Intra-state sales will attract Central and State levy, called SGST and CGST. And inter-state sales will attract IGST, which is likely to be a sum total of CGST and SGST. IGST will also be levied on imports.

Who Should Prepare for GST?

If you are an existing registrant under VAT or service tax or excise duty, you should roll over your registration to GST. Those with turnover less than Rs 20 lakh (Rs 10 lakh for North East states) do not have to mandatorily register for GST. This limit, though, is not to be considered if the business is involved in making inter-state transactions. GST registration is mandatory for them.

If you have a website from where supply of goods or services takes place, GST registration will be mandatory for you. GST also applies to an ‘input service distributor’. Input service distributor means a head office that receives billing for services received at branches and later on it sends apportions to branches. Such ISDs also have to mandatorily register for GST.

GST Applicability for Various Businesses

As a trader, you may be already registered under VAT, so you must register for GST. GST will allow you to set off tax paid at earlier stages for payment of GST on supplies you make. Manufactures also stand to benefit by registering, as they can now adjust tax paid on inputs against GST on outputs. So far as service providers are concerned, many of the existing rules will flow to GST. However, GST on services would now be levied by both State and centre. Taxes would flow to the place of consumption and will be received by the consuming state. Service providers will be able to claim set-off of tax paid on input goods, which was earlier restricted to only input services. Some services, such as doctors, para-medical services, and education services earlier exempt from service tax are likely to be exempt under GST as well.

Should You Voluntarily Opt for GST Registration?

Many small businesses that are below the turnover threshold and do not make inter-state supplies have the option to register voluntarily. If your buyers are GST compliant it helps you are too. This way, your buyer will be able to take credit of taxes you pay for your inputs. The GST act has laid down that if registered buyers make purchases from unregistered sellers, they will have to do full GST compliance towards tax payment and return filing on behalf of the unregistered seller. With every buyer and seller on board, GST will create a sort of a club of its own with benefits, but at the same time come with the cost of being compliant as well adapting technology as means to do business. Both bets worth the investment.

[gstblue-blog]

GST – Study & Opinions

GST has brought in ‘one nation one tax’ system, but its effect on various industries is slightly different. The first level of differentiation will come in depending on whether the industry deals with manufacturing, distributing and retailing or is providing a service. 

Impact of GST on Manufacturers, Distributor, and Retailers

GST is a boost competitiveness and performance in India’s manufacturing sector. Declining exports and high infrastructure spending are just some of the concerns of this sector. Multiple indirect taxes had also increased the administrative costs for manufacturers and distributors and with GST in place, the compliance burden has eased and this sector will grow more strongly.

But due to GST business which was not under the tax bracket previously will now have to register. This will lead to lesser tax evasion. 

Impact of GST on Service Providers

As of March 2014, there were 12, 76,861 service tax assesses in the country out of which only the top 50 paid more than 50% of the tax collected nationwide. Most of the tax burden is borne by domains such as IT services, telecommunication services, the Insurance industry, business support services, Banking and Financial services, etc.

These pan-India businesses already work in a unified market, and will see compliance burden becoming lesser. But they will have to separately register every place of business in each state.

SECTOR-WISE IMPACT ANALYSIS

Logistics

In a vast country like India, the logistics sector forms the backbone of the economy. We can fairly assume that a well organized and mature logistics industry has the potential to leapfrog the “Make In India” initiative of the Government of India to its desired position.

E-commerce

The e-commerce sector in India has been growing by leaps and bounds. In many ways, GST will help the e-com sector’s continued growth but the long-term effects will be particularly interesting because the GST law specifically proposes a Tax Collection at Source (TCS) mechanism, which e-com companies are not too happy with. The current rate of TCS is at 1%.

Pharma

On the whole, GST is benefiting the pharma and healthcare industries. It will create a level playing field for generic drug makers, boost medical tourism and simplify the tax structure. If there is any concern whatsoever, then it relates to the pricing structure (as per latest news). The pharma sector is hoping for a tax respite as it will make affordable healthcare easier to access by all.

Telecommunications

In the telecom sector, prices will come down after GST. Manufacturers will save on costs through efficient management of inventory and by consolidating their warehouses. Handset manufacturers will find it easier to sell their equipment as GST has negated the need to set up state-specific entities, and transfer stocks. The will also save up on logistics costs.

Textile

The Indian textile industry provides employment to a large number of skilled and unskilled workers in the country. It contributes about 10% of the total annual export, and this value is likely to increase under GST. GST would affect the cotton value chain of the textile industry which is chosen by most small medium enterprises as it previously attracted zero central excise duty (under optional route).

Real Estate

The real estate sector is one of the most pivotal sectors of the Indian economy, playing an important role in employment generation in India. The impact of GST on the real estate sector cannot be fully assessed as it largely depends on the tax rates. However, the sector will see substantial benefits from GST implementation, as it has brought to the industry much-required transparency and accountability.

Agriculture

The agricultural sector is the largest contributing sector the overall Indian GDP. It covers around 16% of Indian GDP. One of the major issues faced by the agricultural sector is the transportation of agri-products across state lines all over India. GST will resolve the issue of transportation. 

FMCG

The FMCG sector is experiencing significant savings in logistics and distribution costs as the GST has eliminated the need for multiple sales depots. 

Freelancers

Freelancing in India is still a nascent industry and the rules and regulations for this chaotic industry are still up in the air. But with GST, it will become much easier for freelancers to file their taxes as they can easily do it online. They are taxed as service providers, and the new tax structure has brought about coherence and accountability in this sector.

Automobiles

The automobile industry in India is a vast business producing a large number of cars annually, fueled mostly by the huge population of the country. Under the previous tax system, there were several taxes applicable on this sector like excise, VAT, sales tax, road tax, motor vehicle tax, registration duty which will be subsumed by GST.

Startups

With increased limits for registration, a DIY compliance model, tax credit on purchases, and a free flow of goods and services, the GST regime truly augurs well for the Indian startup scene. Previously, many Indian states had different VAT laws which were confusing for companies that have a pan-India presence, especially the e-com sector. All of this has changed under GST.

[gstblue-blog]

Job Work Provisions Under GST Explained: All You Need To Know

Job-work sector constitutes a significant industry in. It includes outsourced activities that may or may not culminate into manufacture. The term Job-work itself explains the meaning. It is processing of goods supplied by the principal.

The concept of job-work already exists in Central Excise, wherein a principal manufacturer can send inputs or semi-finished goods to a job worker for further processing. Many facilities, procedural concessions have been given to the job workers as well as the principal supplier who sends goods for job-work. The whole idea is to make the principal responsible for meeting compliance on behalf of the job-worker on the goods processed by him (job-worker), considering the fact that typically the job-workers are small persons who are unable to comply with the discrete provisions of the law.

The GST Act makes special provisions with regard to removal of goods for job-work and receiving back the goods after processing from the job-worker without the payment of GST. The benefit of these provisions shall be available both to the principal and the job worker.

 What is job-work?

Section 2(68) of the CGST Act, 2017 defines job-work as ‘any treatment or process undertaken by a person on goods belonging to another registered person’. The one who does the said job would be termed as ‘jobworker’. The ownership of the goods does not transfer to the job-worker but it rests with the principal. The job worker is required to carry out the process specified by the principal on the goods. 

How does Job Work function (procedural aspect)?

Certain facilities with certain conditions are offered in relation to job-work, some of which are as under:

a) A registered person (Principal) can send inputs/ capital goods under intimation and subject to certain conditions without payment of tax to a job-worker and from there to another job-worker and after completion of job-work bring back such goods without payment of tax. The principal is not required to reverse the ITC availed on inputs or capital goods dispatched to job-worker.

b) Principal can send inputs or capital goods directly to the job-worker without bringing them to his premises and can still avail the credit of tax paid on such inputs or capital goods.

c) However, inputs and/or capital goods sent to a jobworker are required to be returned to the principal within 1 year and 3 years, respectively, from the date of sending such goods to the job-worker. d) After processing of goods, the job-worker may clear the goods to-

(i) Another job-worker for further processing

(ii) Dispatch the goods to any of the place of business of the principal without payment of tax

(iii) Remove the goods on payment of tax within India or without payment of tax for export outside India on fulfillment of conditions.

The facility of supply of goods by the principal to the third party directly from the premises of the jobworker on payment of tax in India and likewise with or without payment of tax for export may be availed by the principal on declaring premise of the job-worker as his additional place of business in registration. In case the job-worker is a registered person under GST, even declaring the premises of the job-worker as additional place of business is not required.

Before supply of goods to the job-worker, the principal would be required to intimate the Jurisdictional Officer containing the details of the description of inputs intended to be sent by the principal and the nature of processing to be carried out by the job-worker. The said intimation shall also contain the details of the other job-workers, if any. The inputs or capital goods shall be sent to the jobworker under the cover of a challan issued by the principal.

The challan shall be issued even for the inputs or capital goods sent directly to the job-worker. The challan shall contain the details specified in Rule 10 of the Invoice Rules. The responsibility for keeping proper accounts for the inputs or capital goods shall lie with the principal.

 Input Tax credit on goods supplied to job worker

Section 19 of the CGST Act, 2017 provides that the principal (a person supplying taxable goods to the job worker) shall be entitled to take the credit of input tax paid on inputs sent to the job-worker for the job-work. Further, the proviso also provides that the principal can take the credit even when the goods have been directly supplied to the job-worker without being brought into the premise of the principal. The principal need not wait till the inputs are first brought to his place of business.

 Time Limits for the return of processed goods

As per section 19 of the CGST Act, 2017, inputs and capital goods after processing shall be returned back to principal within one year or three years respectively of their being sent out. Further, the provision of return of goods is not applicable in case of moulds and dies, jigs and fixtures or tools supplied by the principal to job-worker.

 Waste clearing provisions

Pursuant to Section 143 (5) of the CGST Act, 2017, waste generated at the premises of the job-worker may be supplied directly by the registered job-worker from his place of business on payment of tax or such waste may be cleared by the principal, in case the job-worker is not registered.

 Transitional provisions

Inputs, as such, or partially processed inputs which are sent to a job-worker prior to introduction of GST under the provisions of existing law [Central Excise] and if such goods are returned within 6 months from the appointed day [i.e. the day on which GST will be implemented] no tax would be payable. If such goods are not returned within prescribed time, the input tax credit availed on such goods will be liable to be recovered.

If the manufactured goods are removed, prior to the appointed day, without payment of duty for testing or any other process which does not amount to manufacture, and such goods are returned within 6 months from the appointed day, then no tax will be payable. For the purpose of these provisions during the transitional period, the manufacturer and the job-worker are required to declare the details of such goods sent/received for job-work in prescribed format GST TRAN-1, within 90 days of the introduction of GST.

[gstblue-blog]

What GST Means For A Common Man?

With the Rajya Sabha passing all the four GST bills in the parliament a week back, the nation’s biggest and revolutionary tax regime GST (Goods and Services Tax) is all set to become a reality soon. Boasted as the most subversive tax reform in the country after independence, GST is expected to curb transactional costs by introducing a unified tax system stirring economic growth in the long run.

With the prospects that GST would improve the GDP by a couple of percentages, the reform in its entirety might come with` a mixed bag of surprises for the common man.

Talking about its long-term impact, GST should mark a positive impact on most sectors. Based on the GST implementation experience derived from other nations, India might experience an inflationary impact especially during the transition stage, which is expected to fade with the roll out of measures such as anti-profiteering.

Yes, with the inclusion of anti-profiteering along with other counteractive measures, GST should lead to reduced cost for most of the supplies to the end-users in the long-run.

Here’s a quick look at what the GST could mean for the common man:

Services that are likely to become expensive include:

Mobile phone bills

Premiums for life insurance plans

Investment management and banking services

Online ticket booking services

Basic luxuries such as DTH services

 Prices of the following essential services are also likely to go up:

Healthcare

Residential rentals

School and educational fees

Rail/metro commute

Courier services

 Services that might see a price drop in most of the states are as follows:

As the GST council has decided to include entertainment taxes in GST, movie tickets might turn cheaper in most of the states  across the country.

Dining out in restaurants/hotels may turn pocket-friendly in several states.

 Vehicles and certain essential goods to witness price drop:

Under the GST tax system and the current supply chain ecosystem, the following might get cheaper:

Two wheelers

Luxury and SUV or premium cars

Entry level sedans excluding small cars

 Minimal impact:

Basis of the current supply chain landscape and other associated indirect taxes, the common man can expect marginal impact on white goods such as:

Stoves

Washing machines

Televisions

Shampoos

Toothpastes

Soaps

 Prices of sin goods and aerated drinks to go up:

The government with its determined outlook towards injurious/sin goods, proposed a high tax rates on ‘sin goods’ that include cigarettes, aerated drinks and tobacco products. With a higher tax rate of around 40%, these goods may witness steep rise in their prices.

Here’s the four-tier GST tax rates 

The tax system has been categorised into four range i.e. 5%, 12%, 18% and 28% (steeper to the pre-proposed 6%, 12%, 18% and 26%). Let us apprehend them for a better understanding:

The 5% slab: The GST council has been very keen on eradicating inflation. as it has cut out the taxes levied upon grain and food (which constitutes up to 50% of the consumer inflation basket). To add more to it, the 5% tax slab is levied upon the common use products, in comparison to the earlier 9%.

 The 12% & 18% slab: The two standard rates that would be applicable upon bulk items such as processed products, oils, soaps, etc. will be further categorized in the upcoming session as which commodity falls in which slab.

 The 28% slab: The council has been keen on uplifting the economic equality, as the top percentile slab will be applied upon luxury and white goods along with tobacco and aerated drinks. An addition secs will also be implied on these goods to compensate for the roll out losses.

Another rate slab is yet to be decided for gold and other precious metals, which is likely to be around 4% (as proposed earlier). (Source: Economic Times)

Though these slabs are yet to be approved by the Parliament, the GST council has put their best foot forward to get rid of the indirect taxations in an attempt to gain a steady control over the administration of the overall tax system. 

 Positive impact lurking around the corner, expected in long-term!

 Whilst the afore-mentioned forecasts are based on the statements/data released by government officials and authorities, it would be good to wait for the final verdict on the fitment that the GST council and government will release for a wide range of supplies and services. Nevertheless, with the ennoblement of anti-profiteering and other counteractive measures, GST is expected to curb costs for most.

[gstblue-blog]

WILL GST TROUBLE ACCOUNTING AND FINANCIAL REPORTING

Print Friendly and PDF GST transition is not only about a tax change but a complete business, finance, accounting and reporting overhaul

Following are some key areas where companies will need to focus from financial accounting and reporting perspective on transition to GST

Presentation Of GST In Financial Statements

Currently, accounting treatment of various indirect taxes varies based on their nature and point of levy. Under IND AS, excise duty is included in revenue, since it is a production-based tax. Sales tax and VAT is not included in revenue, since it is levied at the time of sales. GST is a destination-based tax, which is levied at the point of supply. Hence, it is likely that revenue will not be presented including GST. 

his is likely to bring significant volatility in the reported revenue number of various companies even though from an economic perspective no significant change in operations has happened. Companies should consider a need for non- GAAP reporting to better explain their performance from a revenue perspective to all their stakeholders.

Impact Of Tax Credit

GST is likely to bring significant benefits to organizations by way of tax credit. Currently, organizations do not get tax credit for indirect taxes such as luxury tax, Octroi, Entry tax, CST. On transition to GST, majority of these levies are likely to subsume in GST and will be eligible for tax credit. It is a well-established accounting principle that refundable taxes are not considered as part of cost of acquisition of asset/expense and are accounted as an asset. Transition to GST will require companies to reconfigure their inventory valuation or asset capitalization or expense recording rules in their accounting system to ensure tax credits are accounted appropriately in the GST regime.

Reconciliations

Revenue recognition according to IND AS may not coincide with turnover number for the purpose of GST.

For example, in case of multiple element contracts, total consideration will be allocated to each component based on fair value of each element. However, the same methodology may not work for GST purpose. Moreover, GSTpayments and return filings are expected to be state wise. Accordingly companies will need to devise a proper system in place, for timely state-wise reconciliations of periodic GST filings in various states, with the amount recorded in the books of accounts. Companies, which include excise as a part of sales for their internal reporting/MIS, may have to redesign the MIS post-GST transition and consider the consequent impact, if any, on KPIs of sales/marketing staff.

Accounting Of Tax Holiday Incentives

Many companies enjoyed significant amount of tax holiday incentives and accounted for same as government grant. For example, the Expert Advisory Committee of the ICAI, while evaluating an issue relating to sales tax exemption under In AS, required such exemptions to be recorded as revenue grants (distinct from sales). It is not clear whether these incentives will continue even in the GST regime. Companies will need to assess accounting implications of any change in these tax holiday benefits upon finalization of GST laws.

Updation Of Chart Of Accounts

Companies will need to plan well for transition and assess carefully the transition rules. A key aspect will be whether transition results in any potential write off of tax credits accumulated in particular states and not likely to be set off. Another practical challenge relates to carry forward of tax credits. These may need to be carried forward state wise, which could involve significant effort in identifying and breaking down the current balances. Further tax accounting and compliance considerations needs to be planned in the IT systems for transactions originating before transition but reversing/concluding post transition, e.g., sales returns, receipt of purchases after transition etc.

Transition

Another key impact area will be the Chart of Accounts used for reporting. Currently, there are several indirect taxes and hence, there are usually many tax-related general ledger (GL) codes in the Chart of Accounts used for financial reporting. In a GST regime, the new COA will depend on the type of business, credit availment rules and place of supply etc. However, creating the new Chart of Accounts would require careful consideration and planning; else, this could impact financial reporting. Essentially management will need to make substantial accounting-related modifications in their IT systems at a transaction level, for all transactions affecting tax GLs, including to the auto accounting entries generated in ERPs. This will entail a detailed assessment to ensure there are no financial reporting errors and impact on internal controls post transition.

Conclusion

India is already handling with transition to IND AS and need to address various aspects of financial reporting systems and processes to move toward sustainable IND AS reporting. Transition to GST is also likely to impact many of these financial reporting systems as well. It is critical that organizations chalk out their mitigation plan to address changes arising out of both these regulations in a synergistic manner to reduce cost of transition and minimize business troubles.

[gstblue-blog]

WHY BACKUP IS SO IMPORTANT ?

Storage is vital to any computer system. Lose that memory and you’re out of business – often literally. Studies have shown that a company that loses its data is very likely to go out of business.

Having duplicate copies of your most important information saved in a remote location keeps it safe in case anything goes badly wrong with your computer.

When you think about it there are a number of ways files can be lost unexpectedly…

COMPUTER CRASHES

Always happen when you least need it, and can lead to data loss.

VIRUS INFECTION

Aggressive malicious viruses can corrupt files and disable computers.

HARD DRIVE FAILURE

Hard drives have a finite lifetime and can fail suddenly and without warning. The sudden death of a hard drive can cause the painful loss of months or years of irreplaceable files and the timing can be catastrophic – if this happens close to a work or college deadline it could be a nightmare scenario.

PHYSICAL COMPUTER DAMAGE

Your files are more at risk if you use a laptop. Light and portable comes at the price of reduced durability. Laptops are sensitive and are easily damaged if dropped or have drinks spilled over them.

THEFT

Computers are sought after by thieves and cannot always be kept secure whilst travelling.

The bottom line is that if you value what’s kept on your computer, it’s wise to take steps to protect your information from sudden loss. Work can be redone, but the loss of cherished files like family and travel photos is permanent.

Many users regularly back up their files to their computer hard drive, but in the event of a total computer breakdown this will not protect the information. Saving data to a separate location makes far more sense, and can be easily done if you have an external hard drive, or a large-capacity pen drive to back up onto.

However this method is only as secure as the device you’re backing up to. When saving your files on physical devices, your backup device needs to be kept in a different location than your computer, and can in turn fall victim to damage or loss.

In addition, despite your best intentions, you may forget to copy your files as often as you should, leaving a large amount of recent work unprotected.

A safer and more effective method of securing files is online backup. Files stored online are safe from damage your computer, and if something goes wrong with your machine you will still have remote access to your information from any computer with internet access. This means files can be quickly and easily restored to your computer from a secure online server.

Typically a GSTBlue Accounting Software will have one or more storage administrators to take care of storage and backup systems.

There are many features in GSTBlue Accounting Software, You can take manual backup, you can schedule, backup on your google drive when you close the software.

[gstblue-blog]

Best Practice in Accounting

As a small business owner and entrepreneur you have to wear many hats. From product development and sales, to hiring and customer service, there are a number of different tasks and responsibilities that keep you busy 24/7… including accounting.

Unless you’re an actual accountant, the thought of bookkeeping is probably a daunting one, yet it’s a crucial part of your business and, when handled poorly, could ruin all your hard work.

1. Make it a priority from the start

It’s easy to put off tasks or processes you’re not particularly interested in starting out, but proper accounting should be a priority from the get go.

Not only is keeping accurate books crucial to your company’s financial health and success, but it will only get more complicated down the road so start early!

2. Spend your time where you’re most needed

Though there may be a period when you’re responsible for a wide variety of roles, take time to evaluate where your skills are most needed and best used.

Chances are, this isn’t the accounting department… identify what you need to do to make sure your time is spent effectively and efficiently.

3. Invest in the right software…

There are plenty of services out there to help you keep your finances, including payments, invoices, payroll and taxes, organized and in check.

Identify which tools you need for your business activities and look into different options taking into consideration your company size, growth rate and location – different services may be geared toward accounting and tax practices in different countries.

4. …but don’t overspend

The most robust and expensive software package doesn’t necessarily mean it’s the right software for your company as many small businesses won’t need enterprise-level services. Additionally, more complicated software doesn’t do you any good if you don’t know how to fully utilize it.

 5. Hire a professional

If accounting isn’t your thing, you’ll want to try and hire a professional as soon as your company is to the point where its finances need extra attention and you can add someone to the payroll.

6. Keep things separate

Especially if you’re just starting out, it can be easy to blur the lines between business and personal spending and income. Even if you’re not having much money coming in, don’t get into the habit of mixing up your finances. Set up clear accounts and budgets for your business.

7. Track your expenses

Track anything and everything related to your business by saving receipts, using a dedicated business credit card and bank account. Not only will you need to track activity to see how much you’re profiting but also for tax purposes at the end of the year.

8. Stay organized throughout the year

It’s easy to fall behind on tracking and keeping records of everything, but the more organized and consistent you are throughout the year, the better positioned you’ll be when tax time comes.

9. Schedule time to check your finances

Make organizing an a regular habit, even if you do have a dedicated accountant on staff. Taking time to consistently check the books and see where things stand will ensure you don’t make mistakes or have things fall through the cracks.

10. Plan for major expenses

Think well into the future to plan for significant expenses, such as new hardware or system upgrades. Being aware of large expenses down the road will help you better manage your finances now to comfortably spend on those purchases or make it through a rough patch.

11. Learn the lingo

While accounting software like GSTBLUE’s aim to be jargon free and easy to understand for everyone, getting to grips with the basics can be helpful.

 12. Use a payroll system

You shouldn’t be spending your time figuring out your company’s payroll and processing paychecks when you could be working to move your business forward. Streamline pay day with outside tools or services.

13. Automate payments and invoices

In this high tech world, there’s no reason it should take any time to send out invoices or wait for payments.

14. Shorten payment terms

Having a positive cash flow is essential for your business to succeed but sometimes your cash flow can get stuck when waiting for payments to come in. Shorten payment terms or automate subscription payments to help ensure you get paid quickly and on time.

15. Regularly review receivables

Don’t think that once you close a deal you can immediately start counting the cash. Depending on your product and payment platform, you may be waiting on accounts receivable longer than you’d like. Regularly check outstanding payments to make sure all your customers’ payments are up to date.

16. Go after payments systematically

If you do see outstanding payments that are past their due date, make sure you have a set process system in place to go and get them.

17. Record deposits correctly

Clearly record any business deposits noting if they’re loans, funding, revenue or profits, so you’re taxed accordingly at the end of the year.

18. Hire help that knows your industry

Though not entirely necessary, hiring an accountant or financial advisor that truly knows your business and industry will better set you up for success as they can be more than just a bookkeeper, but a trusted financial advisor with your business’ best interests in mind.

19. Prepare for taxes

Don’t wait until the last minute to start figuring out your taxes. Preparing for taxes throughout the year and well before the year-end cut off will help protect you from unwanted surprises or errors.

20. Figure out a system that you can scale

Whether you’re hiring a part-time bookkeeper or investing in reliable accounting software, think ahead to where you want your business to be in five years – will the tools and processes you’re putting in place now be able to adapt and grow as your business does?