The notion of reconciliation is not unusual to taxpayers as it was widespread before the advent of the GST regime too. However, this concept gained unprecedented popularity after the GST Law in India as it enables businesses to ensure that no sales or purchases entry goes missing or gets wrongly reported when filing the GST returns.

GST reconciliation includes equalling purchases and sales data employing various GST returns and purchase and sales registers using a manual calculation or GST accounting software.

What is meant by GST reconciliation?

In general, a reconciliation implies analysing two data entries to distinguish any discrepancies or variations. However, GST reconciliation is a means that helps taxpayers to understand the disparity between their financial statements and GST returns.

Moreover, with the aid of GST reconciliation, you can amend the variations either by interacting with the supplier or making modifications to your accounting records. Apart from this, you should conduct the GST reconciliation process at every fixed interval to avoid any financial penalties that arise due to mismatch in your financial statements.

Types of GST reconciliation

Mentioned hereunder is a list of the most popular types of GST Reconciliation that you should take into account while filing your GST Return:

• GSTR2A and Inward supplies Reconciliation
• GSTR 2A and GSTR 3B Reconciliation (Input Tax Credit)
• GSTR 1 and GSTR 3B Reconciliation to understand discrepancies in sales data.

Any deviations marked between these GST returns can point to a show-cause intimation from the GST authorities.

Mismatches under GST reconciliation

Listed below are some significant mismatches that you may find during your GST Reconciliation.

• Discrepancies in bill details

There can be numerous errors in the provided information between you and your vendor. Also, some fundamental invoice data mismatches include the incorrect bill number, bill date or/and invoice price.

• Discrepancy in GSTIN

Mismatch in GSTIN is the most common discrepancy while carrying out GST Reconciliation. On the off-chance, due to a manual error, the supplier enters the wrong GSTIN. A situation like this will create a problem while claiming ITC. Hence, to overcome this discrepancy, you should employ online GST accounting software.

Why is GST reconciliation important?

GST reconciliation plays a significant role for your business due to various reasons. Firstly, GST reconciliation is essential in claiming 100% correct Input Tax Credit as it helps eliminate all the discrepancies between the GSTR 2A and purchase register. Also, GST reconciliation is beneficial in raising invoice issues with the supplier to fill errorless GST return.

How to do GST reconciliation?

Follow the below-mentioned steps to conduct GST reconciliation effectively:

• Start by reconciling within the GSTIN accurately.
• Next, reconcile the data provided to the PAN India level.
• Afterwards, perform the supplier-wise GST Reconciliation to get any unclaimed ITC.

What are the common challenges faced during GST reconciliation?

One of the significant challenges faced during GST reconciliation is that the people involved hold different methods for their bill numbers. This can make it more difficult for the implementation system to obtain an accurate match of the invoice number. Major issues faced during GST reconciliation are:

• The bill numbers employed by the buyer to register transactions do not match with the seller’s invoices collected in GSTR-2A.
• The buyer carries out business in various states, and the seller has raised the invoice utilising another GSTIN instead of the original buyer GSTIN.
• Both the purchaser and supplier hold registered invoices in separate GST return periods.

To sum up, we can say that GST Reconciliation plays a vital part in keeping your business on track. While it is easy for you to reconcile limited data, it can become challenging to match thousands of entries without proper GST accounting software in place. Hence to make your GST reconciliation seamless, opt for cloud-based accounting software from Ankpal today.

Managing personal accounts and handling income and expenses is a significant yet confusing and exhausting task due to the frequent reforms and changes in tax laws. In India, GST (Goods and Service Tax) is followed for the same, which came into effect on 1st July 2017.

The article outlines the tax reforms that have been introduced in recent years and enlists the reasons as to how they directly affect one’s income bifurcation in terms of TDS or Tax Deducted at Source.

New TDS Section 194Q

The recent budget has proposed certain changes that are expected to impact every business operating in India drastically. The changes pertain to TDS on Purchase Transactions.

One needs to be updated with the latest but significant changes in all commercial and business laws. Such crucial changes wrt TDS on Purchase Transactions will be in effect on 1st July 2021, as proposed by Honorable Finance Minister Ms. Nirmala Sitharaman in her budget speech.

Key Elements of TDS Section 194Q

Section 194Q is proposed to be applicable from 1st July 2021 for business transactions:

• All Purchase Transactions are proposed to be subject to TDS provisions.
• Such a transaction can be effective with TDS and will have to be deducted at 0.1% of the purchase transaction or payment thereof, whichever is earlier.
• The applicability of this section will also extend to an assessee whose aggregate turnover in the immediate previous year exceeds ten crores.

Applicability

The new section 194Q is going to be applicable from 1st July 2021.

TDS Rate

Under section 194Q, Tax Deducted at Source (TDS) shall be applicable at 0.1% on aggregate purchases over and above 50 lakhs from a supplier in India in a financial year.

When to Deduct?

When the value or aggregate of purchases from a supplier or payment, whichever is earlier, exceeds Rs.50 lakhs during the previous year, the provision will be effective as TDS will have to be deducted at 0.1% of the Purchase Transaction or payment.

Who should Deduct?

The buyer is responsible for making payment to a resident to purchase goods when the value of purchases from a supplier exceeds 50 lakhs during the previous year. The Purchaser, hence, is responsible for deducting TDS as applicable.

Consequences of non-deduction by the Purchaser

If the Purchaser fails to comply with the provision to deduct TDS as applicable, Section 40A(IA) provides that the value of such Purchase Transactions will be subject to 30% disallowance.

How can cloud-based TDS accounting software help?

Cloud-based accounting software provides a digital platform and end-to-end financial services such as bookkeeping, GST, tax filing, Company Law, FDI, TDS return filing, etc. Try Ankpal.

It is the best cloud-based TDS software that offers absolute security for your data and provides convenience in every step.

Clarifications

• If there is a transaction under any other section of the Income Tax Act, other than TCS collected under section 206 C (1H) of the Act, TDS is not required to be deducted on that particular transaction.
• However, if TDS is required to be deducted under this section, then the same Transaction TCS on sales will not be Collected by Sell.
• TDS on a Gross amount involves cash flow reductions.

Example

Mr. Z Turnover in FY 20-21 is more than 10Cr. His purchase from Mr. A till 30.06.2021 is Rs 45 L. No on 07.07.2021 He Purchases goods Rs 7 L from Mr. A. Mr. Z is required to deduct TDS on that purchase of Rs 7 L only.

Ankpal can make your TDS filing faster and streamlined. Make use of the opportunities available and choose the best accounting software.

For more info, call at 63588 58915 and get started with the 30 days free trial of your TDS return filing software today!

Forex Accounting is the term given to Foreign Exchange Accounting that refers to the process of recording the transactions between different currencies. The transactions are recorded in the functional currency as per the exchange rate at the date of completion of a transaction.

With the rapid development in the IT sector, there has been an accelerated change observed in the structure of global and domestic forex markets. Liberalization and the development of currency and forex derivatives have even pushed the RBI to revise its policy of Internal Control Over Foreign Exchange Business.

Forex accounting is carried out through a dealing department which includes dealers, mid, and back-office staff. The staff is responsible for following and tracking the deals made by dealers in foreign currencies.

Forex Accounting and Compliances in India

During a foreign currency exchange, the dealers need to observe the compliances followed in India. RBI lays down these regulatory requirements. According to the regulations, the dealers need information about the transaction in written form.

For any sector, one needs to follow the accounting standards for all foreign currency income and expenditure. It includes a reevaluation of outstanding liabilities and assets in foreign currency.

Forex Accounting and IT industry

As India grows to become an IT hub, the services provided by the IT industry are continuously enhancing the foreign currency inflow in India.

As with other sectors, forex accounting is an essential aspect of accounting in the IT industry to understand its finances better and streamline the expenses.

With sole trader accounting software such as Ankpal, one can ensure that the invoices of their IT company are maintained. Along with it, the sales report provided by the software can ensure that one keeps track of the receivables.

Forex Accounting: Online Course

Forex accounting is a highly specialized function that needs proper training and an immense knowledge base about the respective industry.

The online course offered at Ankpal, a leading trading accounting software in India, provides a practical outlook. The program has been initiated to provide practical and accurate guidance so that the learners can determine functional currency along with understanding the principles and reporting transactions that involve changes in foreign exchange rates.

The course will guide the learners through the step-by-step method of preparing the cash flow statement that involves foreign exchange and handling foreign exchange derivatives. Along with that, it will also detail the effect of hyperinflationary effects on foreign exchange operations.

The trainer employs various case studies and real-life examples to illustrate the issues and clear the doubts arising in foreign exchange accounting and resolve them.

The course is offered in three formats:

Basic (free)

Intermediate

Advanced

The learners can avail numerous videos that detail the course outline for free under the basic plan. For an in-depth and complete course outline, one will have to buy the intermediate or advanced plan.

The outline of the course is as follows:

Introduction to the effects of changes that occur in foreign exchange rates.

Accounting the differences that occur in the foreign exchange rate in a company’s financial statement.

Difference between the functional and presentation currency of the entity.

The impact of foreign exchange differences on business combinations and fair value adjustments.

Translation of functional currency of a subsidiary in different forms of presentation currency of the group.

Accounting the difference in foreign exchange that is caused by the net investment in foreign subsidiaries.

Statement of cash flow and effect of foreign exchange on it.

Foreign exchange derivatives and their accounting.

Foreign currency risk disclosure and disclosure requirements.  

Contact us at 6358858915 or visit our website and start your 30 days free trial today.

GST came into existence in 2017, and since then, many businesses have found the right way to comply with GST regulations. However, there are pockets of businesses that are confused about the GST regulations, registration, etc. Fret not! Here’s everything you need to know to make your business GST compliant.

Filing GST returns

Businesses are required to register under GST if their yearly turnover is more than ten lakhs in the special category states and forty lakhs in other states. Essentially, a regular business will have to file for GST returns. The company has to file one annual and two monthly returns. Non-compliance can lead to severe penalties and a lot of hassle. An efficient online GST accounting software can ensure a seamless experience when filing GST returns.

Classifying transactions

Transactions under the jurisdiction of GST must be classified as goods or services. GST laws classify transactions differently compared to the previous VAT laws, and utmost care should be taken to correctly classify all transactions using HSN/SAC code mapping. Classifications are also based on whether the transaction occurred interstate or intrastate.

Raising invoices under GST

The registered business issues invoices under GST. While suppliers can pick the format that works best for them, the invoice itself must have sixteen mandatory fields. The next step is to update the invoice details on the GSTN portal without fail. An
online GST accounting software can help a great deal in raising invoices and filing returns.

Are you liable to compulsorily register under GST?

Existing business owners have already registered under GST. However, if you’re starting something new and your business meets any of these conditions, you need a GST registration, especially if your turnover crosses Rs. 40 L:

1. Interstate suppliers
2. If you deduct TDS/TCS
3. Casual taxable persons
4. If you are taxable under the reverse change criterion
5. E-commerce operators who offer dealing space to suppliers
6. If you supply via e-commerce operators
7. The principal or the agent making sales indirectly
8. If you are a non-resident taxable person
9. Distributor in the input service
10. Overseas e-service providers providing services to Indian citizens
11. Your turnover exceeds 40 lakhs INR

Get GST registered

As a new business owner, you can get GST registered through the official portal, which has a simple interface and is easy to navigate. You’ll have to validate your contact details. After enrolment, you will receive Form GST REG-25. If you are a supplier for multiple states, you must get GST registered separately in all the states.

Check the impact of GST

Getting registered under GST is bound to have a disruptive impact initially. All the nodes in your network, like your vendors or suppliers, must be aware of the GST registration to implement compliance.

You cannot keep using your old ERP software

After your business is GST-registered, you will have to move to an ERP system compliant and cooperative with the new changes.

Learn from the practices of other countries

When you learn more about similar regulations in other nations and how businesses worldwide cope with them, you will learn how to optimize your systems. Learn from other nations to improve, adapt, and overcome the impact of any changes.

Check up on your IT and accounting systems

Your IT and accounting systems must have needed an upgrade when you first included GST accounting software. Since it’s been a while, it’s time to evaluate how well your IT systems are working in coordination with the software. As time progresses, the technology we use must also become faster and more efficient to cope with a dynamic world. A robust
GST billing software for small businesses can make a huge difference.

GST guidelines must be followed, as is the norm. It’s best to keep a check on changing tax guidelines so you never fall behind. Having efficient online GST accounting software on your side can improve efficiency by a large margin.

Accounting has always been one of the essential parts of running a business, be it large or small. To help manage this, accounting software was introduced. Most online accounting software acts as a ledger that consolidates the records and process of all accounting transactions under one roof. As good as that sounds, does it aid in business growth?

Here are 10 ways accounting software helps do just that.

Performance analysis

Without having your business first analyzed, creating a good management policy is impossible. Depending on the financial records that have been accumulated, a person can check to see where money was spent and how advantageous were certain investments in the long run.

Saves time

Accounting software, especially cloud-based accounting software, helps in reducing any extra costs that may be incurred and saves time which can be used for something else. This is because accounting software not only helps businesses track their financial data but also helps in managing their credit notes and even invoices.

Law compliances

Any account that has been kept in a systematic order is only beneficial to a business. In some cases, it could help them overcome any unexpected changes made in taxations or legal compliances. Though as an accountant may be aware, owning good accounting software would come with updated taxation settings.

Financial updates

It isn’t easy to remember details that are related to the financial world. This is mainly because there is too much to remember, and more only gets added as the days go by. With the help of online accounting software, these details get accumulated and added on for handy reference.

Creating budgets for managing operations

With the help of cloud-based accounting software, it is easy for any business to create a good budgeting system without any issues. A good business always ensures that a balanced budget is made in case of any emergency expenses that arise or even for future revenues.

Reduced overall costs

Accounting software and overall cost reduction are always linked. This is because the software is basically doing the job of three or four people. With this, any extra costs that would initially go towards administration and even payroll are significantly reduced.

Manages cash flow

Problems that are related to cash flow are often seen as one of the biggest issues that businesses face. The use of online accounting software helps the business come up with new ways to combat the issue of cash flow.

Increase efficiency

Due to its ability to manage any and all accounts transactions, accounting software helps increase the efficiency of a business as all the necessary information is in one place. As accounting calculations are often difficult, this software ensures they are made with no hassle.

Security and protection

The financial data of any company is considered to be it’s the holy grail. That means it cannot fall into the wrong hands. Cloud-based accounting software acts as a safeguard that protects this data. This way, the data is safe, and an extra copy is made available whenever required.

Maintaining customer relationships

In the financial world, the relationship any firm has with its clients is extremely important. With accounting software, any delays and mishaps that could have happened can be avoided. This increases business reputation and credibility.

In many cases, the financial world is something that keeps changing. More often than not, it is difficult to keep up with them. However, online accounting software helps reduce the burden in certain situations, giving a business enough breathing room to focus on other areas that could potentially lead to immense growth.

8 Effective Inventory Management Techniques for 2021

Inventory is a crucial aspect of a business that involves purchasing, producing, and selling goods. It is essential to regulate and keep a check on the inventory for a profitable business experience. Both small-scale and large-scale companies can profit from keeping a check on the inventory. Inventory control software helps in growing businesses by focusing on stored items for production.

What is inventory management?

Inventory management is a technique by which businesses can keep track of the inwards and outwards stock-flow in their warehouses. It lets the companies plan their sales and purchase according to the inventory stock quantities. It is a systematized approach to manage raw materials, tools, finished goods, and unfinished goods in the inventory.

How does inventory management work?

Inventory management keeps a check on the stocks when it moves from the suppliers to the company warehouses and finally to the customers. It ensures efficient use of the items and helps plan future sales. It also helps in controlling the demand and supply chain of the business. A good inventory control software helps keep a record of the inventory systematically. It tracks the availability of the stock for its optimal usage.

Why is inventory management important?

Manual stock accounting can be stressful and can create confusion. Inventory management is less time-consuming and helps maintain a smooth flow of work without any misinterpretations. It improves consistency and increases customer satisfaction. It automates the workflow and provides detailed reports of the stocks such that the company is not out of stock or overstocked. Software companies like Ankpal offer the
best inventory management software that helps your company grow with reliable services.

Inventory is one of the most valuable and largest assets for businesses. Inventory management software provides financial aid to the companies as it keeps a check on the cost of buying, producing, maintaining, and selling the goods during the accounting period. It also manages to identify and track the expired products, and the items returned to the inventory. It enhances value management and reduces the chances of misinterpreting item quantity.

Common inventory management techniques for 2021

It is vital to track the stocks for the smooth functioning of your business. Many popular innovative techniques of inventory management can improve the flow of capital and regulate company sales. Some of the methods are listed below.

• Just-in-time (JIT) inventory

JIT inventory, as the name suggests, means keeping only that much stock in the storage as is needed for production.

• ABC inventory analysis

This technique divides the inventory items into value-based categories A, B, and C that makes it easier to track them.

• Dropshipping

In this technique, the companies outsource the products from a third party. The requirement of the warehouse gets reduced as they don’t take it from their inventory.

• Lean manufacturing

This technique aims to reduce the waste during manufacturing and increase the cost accounting to the customer needs.

• Batch tracking

Batch tracking is a technique used to keep a check on the set of goods produced together. It gives a prompt about the expiration of a particular batch of products, allowing businesses to avoid losses and plan sales.

• Safety stock inventory

In this technique, the extra stock gets purchased as a safety measure to cope with the misinterpreted forecast or change in demand.

• Economic order quantity (EOQ)

EOQ technique uses a formula to ensure the purchase of the right number of stocks required for the productions.

• Minimum order quantity (MOQ)

MOQ is the calculated minimum quantity of inventory stock required to purchase at one time for producing an item.

Five key stages of inventory management

• Purchasing: Raw materials get purchased for production.
• Production: Manufacturing of final products.
• Holding stock: Storing raw materials and finished goods.
• Sales: Selling the products in exchange for payments.
• Reporting: Recording the profits and quantity sold.

Efficient inventory management techniques adopted by businesses help them track their unfinished and finished items. The best inventory management software helps to control the expenses, which can increase the profit margin and leave businesses with enough capital to expand their business. Furthermore, with an efficient inventory system, enterprises can also meet client deadlines and make their customers happy with their service.

Invoicing is the primary step of receiving payment–an invoice is made for every service or product sold and supplied. As most of the transactions are now happening digitally, transactions are also not being recorded in books. So the companies have adapted to the financial technologies (card payment, e-transfer, and online payments) to contain error invoicing and overdue accounts payable. SMEs (Small and Medium-Sized Enterprises) benefit a lot from the best billing software, especially in terms of quick gains.

What is billing software?

A simple billing software tool is used to automate invoice generation for services and goods rendered. The integrated programs create a list of services and products and their costs following the tax calculations and send them to the respective beneficiary. With this smart technology, business owners can create invoices using customizable ready-to-use templates.

What does billing/invoice software do?

The best billing software will save you the printing and postage costs, streamlines business workflow, and reduces deadlines through unified invoice processing. Billing software enables you to access your financial data from anywhere, anytime. They remove the need for additional setup for the process of billing and payments. Such software comes with multi-currency capability allowing you to accept payments in foreign currencies. You can also create reports and export data through PDF files, which are shared directly through emails.

Benefits of using billing software

Invoicing operations are the key to enabling businesses to get paid on time. Ideal billing software will handle your invoices operations and benefit your business in the following ways:

• Saves time and money

Creating and sending the invoices electronically saves you time. It also eliminates the need for manual work, saving money.

• Minimizes disputes and human errors

Billing software removes the need for manual work, which, in turn, eliminates human errors and minimizes disputes.

• Automates accounting and payment reminders

Automating financial and accounting processes will help you in increasing the efficiency of the overall business workflow.

• Establishes brand identity

The customizable ready-to-use templates in the billing software enable you to modify and insert your business icons or brand logos on your invoices. Branding becomes easier this way.

• Quick invoice creation

With billing software, you can create, customize, and personalize invoices quicker. It allows your customers to pay you immediately as they receive their invoices.

• Environment-friendly

With electronic operations, the need for maintaining books and the use of paper for creating invoices is removed, making the entire process environment-friendly.

• 24/7 service

You can access the features of online billing software anytime. It allows you to perform necessary operations whenever required.

• Professionalism and modernity

The modern billing software allows you to create and send the invoices in time without any errors, helping you stay professional.

• Provides security

With the billing software, all the operations are performed electronically, and your data is stored online. It removes the risk of losing paper invoices and valuable information.

• Strengthens customer relations

Billing software enables you to create invoices instantly and process the data accurately and save it online, which makes hassle-free customer service possible. It builds the trust of your customers and strengthens their relationship with your business.

• Ensure accurate information

With the billing software, you don’t have to depend on aging reports and spreadsheets which need manual updates. It enables you to perform your business operations only with accurate data.

Thus, using billing software is the best way to handle all your business financial operations. It eliminates the need for a dedicated finance team and enables you to perform all the required invoice and billing operations anytime, anywhere, and in return, saves you time and money. Start increasing your business growth and profits with the best billing software!