Author: firmway

GST

GST Registration: What You Need to Know to Drive Growth

Would only registration lay the perfect platform in Cracking Code to GST Success?

While ruling out the possibilities for any further delay in implementation of GST, Finance Minister Mr. Arun Jaitely had expressed, “Of the total 8.09 million existing tax payers, 81.1% have already registered.”

But would only registration itself  be the Cracking Code to GST?

The Importance of Financial Discipline for GST Compliance

Financial Discipline is the primary intention behind drafting the entire law from the grassroots level.
Financial Discipline also helps you find the revenue leakages and manage your business.
It also helps you allocate resources and expenses, which results in profitable outcome.

The Role of Accurate Input Tax Credit in GST

How can we expect a boy, who is not well-dressed at school entry, to stay disciplined all day? Similarly, taxpayers also need financial discipline by cleaning their books and ensuring accurate input tax credit carry-forward. Consequently, less carry-forward leads to fund blockage; on the other hand, excess invites scrutiny and interest costs.

Ensuring Precise GST Tax Credit Carry-Forward with Invoice-Level Matching

So, how to ensure precise tax credit carry-forward with invoice-level matching?

GST

Common Reasons for inaccurate input tax credit:

  1. The deductions made for quality issues, delay in delivery, damages, etc.
  2. Rejected material not sent back.
  3. In the case of works contract: approval of completed work is pending, escalation claims, scope change claims, etc.
  4. Service tax credit on advance payment.
  5. Invoice not received for Goods and Services, and so forth.

Strategies to Ensure Accurate Input Credit for GST

A. Ask your suppliers, service providers, and customers to share pending invoices, debit/credit notes, and unreported deductions or rejections.

OR

B. Get transaction and balance confirmation from suppliers, service providers, and also customers.

Leveraging Technology for Efficient GST Reconciliation

Strict deadlines for Excise & VAT returns (ending June 30, 2017) significantly affect the feasibility of this activity. Consequently, this is where FIRMWAY’s digital platform comes in, effectively expediting confirmations.
Firmway has impressively achieved 80% reconciliations (in value) within a week, and fortunately, this was accomplished with minimal accounts team involvement

 firmway.in to know more about Firmway.

Receivables

Receivables: How CFOs can gain Accurate & Reliable Accounts Receivable

How can CFOs gain confidence over its Receivables?

Monthly MIS must never neglect trade receivables. A further increase in overdue receipts puts you in a spot of bother. How can CFOs gain confidence in their receivables?

The stated amount of receivables in the books raises multiple concerns, such as:

  • Whether the amount of receivables stated in the books depicts the actual amount of money to be received..?
  • Is the other party making uninformed deductions..?
  • Are pending payments waiting for adjustment..?
  • Were there any accounting errors distorting the financials..?

Obtaining direct confirmations from the parties would be the ideal solution for all these concerns.

Ironically, confirmations are not termed as a fruitful activity due to the various complications that overshadow the gains achievable in the process. Due to these complications, entities are either skeptical of exercising the conventional process of balance confirmations or they exercise the process only for the sake of compliance.

What are the actual benefits of confirmations?

Receivables

  • Increases Financial Credibility:
    Confirming balances directly from verified third parties, henceforth boosts the financial statement’s credibility.
  • Timely Reconciliation of Accounts
    Obtaining confirmations also ensures timely book reconciliation with minimal room for otherwise onerous and unrewarding discrepancies.
  • Increases Legal Validity
    A contract is complete only when the receiver accepts and acknowledges the invoice raised. Authorized personnel confirming balances legally bind the opposite party to make the payment

Improves Receivables’ Collection Cycle

Frequent follow ups for periodic confirmations straight from the accounts departments would be instrumental in placing your name at the top in the list of payments.

Additionally, these obtained confirmations can fulfill Auditing Standards’ mandatory requirements when shared with auditors.

Despite the previously mentioned advantages, this process is often unheeded due to the fact that financial decisions are based on ROIs rather than the benefits. However, on the flip side, it is clear that significant financial and human resources are required.

And that’s where FIRMWAY plays a role by making confirmations a reality at absolutely nominal cost.

FIRMWAY is India’s premier online platform for third party confirmations. firmway.in to know more.