Automation of 26AS Reconciliation

On every sale of Goods and Services above a certain limit, TDS is deducted by the Customers. Companies need to reconcile TDS periodically by extracting transaction data from Accounting Software & 26AS form from the government portal to ensure that the client has given proper credit, and avoids penalties and audit risk.

The TDS and TCS that are eligible for the credit are reflected in the statement while reconciling with the ledgers. The amount stated in the statement is like advance tax paid by the deductee and eligible for credit. Hence it is of utmost importance that the amount matches the TDS/TCS receivable ledgers of the deductee.

While this process is crucial, it is done manually by the majority of organizations today. A survey found that Tax managers spend at least 8 hours a week on average on manual data tasks. In fact, 25 percent reported spending over 20 hours a week on manual data tasks.

In another survey of over 280 companies, 62 percent of respondents reported that a large part of inefficiencies could be eliminated by using automated tools. Just like the other financial functions, TDS reconciliation is faced with a similar fate. Accurate reconciliation of TDS credit reduces the tax burden and ensures no loss of TDS credit. However, due to manual intervention, faces the following challenges:

Challenges spelled out 

  • The possibility of manual errors in inputting amounts while filing returns can result in a mismatch.
  • For deductees having a large number of customers, matching amounts is a herculean task.
  • The frequent updates to 26 AS make it time-consuming to reconcile and track on excel worksheets.
  • Adopting manual work involves different people and their different ways of working. This lacks standardization and discipline. Communication usually happens over email and is easy to falsify or spread misinformation.
  • Proactive tracking of discussions with tax deductor/collector for corrections due to identified mismatches. Finance teams are needed to manually communicate over endless emails and calls.
  • In many instances, issues can be caused due to version control of excel sheets and other documentation
  • The reports might be kept in disparate places while working in a manual model.
  • The booking of TDS in the books of the deductor and deductee can be in different periods. Time differences spill over from one quarter to another quarter in the form of 26AS causing further discrepancies.

Automating this process will enhance accuracy for 26 AS and significantly reduce time in processing low-value-adding activities. It also enables us to manage TDS and TCS credits as per Form 26AS and books of accounts and almost nullify leakages.

What are the benefits of automating the reconciliation process? 

Running a tax department equates to having a plethora of responsibilities, especially concerning compliance and regulations like TDS. However, using reconciliation automation tools helps expedite the reconciliation process and closure while also improving compliance, enhancing accuracy, and promoting transparency.

  • Firmways’ 26 AS Reconciliation Software is also one such software that makes the reconciliation process seamless for the organization.
  • Maps the TAN number with the PAN number for reconciling
  • It can reconcile large volumes in 60 seconds.
  • With the flexibility, it offers in quarterly, half-yearly, and annual reconciliations, it highlights mismatches and classifies entries into different buckets for ease of operations.
  • Efficiently manages communication with parties and generates actionable reports as and when required

Automation of the reconciliation process is truly the need of the hour for any business. With manual processes, it’s difficult to scale in response to the reconciliation when there is an increase in transactions. However, automation of the process makes the entire process effortless.

GSTR-3B – Insights

GSTR-3B – Insights

Government has published #GSTR-3B format for filing #GST return for the month July’17 and Aug’17.

With the objective of ensuring smooth roll out of GST and taking into account the concerns expressed by the trade and industry regarding filing of the returns in GST regime, it was decided that, for the first two months of GST implementation, the tax would be payable based on a simple return (Form GSTR-3B) containing summary of outward and inward supplies which will be submitted before 20th of the succeeding month.

Return in Form GSTR-3B notified contains details to be filed by the registered person in a simplified manner.

Details to be furnished in Form GSTR-3B is as under:

• Consolidated taxable value and tax amount of Outward and inward supplies liable under RCM

• Consolidated taxable value and tax amount of inter-state supplies made to unregistered persons, composition taxable persons and UIN holders

• Details of Eligible input tax credit

• Details of Exempt, nil-rated and non-GST inward supplies

• Details of Payment of tax • Details of GST TDS/TCS credit

GSTR-3B will have to be filed for the month of July and August, 2017 as per the timeline given below:

Firmway – Assisting GSTR-3B

Firmway – Assisting you for GSTR-3B

Firmway assists you in aligning with your vendors and customers for filling of your FIRST GST Return (GSTR-3B) in a week’s time protecting you from unintentional interest cost. For more information please refer the details below:

Links:

LinkedIn: https://www.linkedin.com/feed/update/urn:li:activity:6295613904668196865

Twitter: https://twitter.com/firmway/status/891977846364659712