ARE YOU READY FOR GST

Gst 1 

1ST July, 2017 is a transformational day for India. GST will be implemented and as the industry speaks it is a short term pain for a long term gain. Let’s take a count on the action items –

  • GST Registration, also applicable for Reverse Charge;
  • Vendor details updation for availing Input Tax Credit (ITC);
  • Customer details updation for invoicing;
  • Transaction structure updation – B2B or B2C or E-commerce;
  • Accounting code updation for goods and services and the GST rates;
  • Closing Excise, Service Tax and VAT records and carry forward of available credit;

 

However, there is a key question less deliberated. How does a company ensure that the migration is smooth and how does the Matching Concept under GST to be validated for each business transaction. Can we afford to run our business by exceptionin future?The only answer to this problem is “Finance process optimization”. This process is no longer limited to a few leading Companies in high tech industries. It is an increasingly pressing goal of all start ups, medium sized and small business organization. The discipline required under the GST regime can only be achieved if companies have robust systems in place. Management is under constant pressure to find innovative solutions and control the underlying risks. A business runs on various complementary functions. Each function is further comprised of various sub-function. Take the classic example of a Supply Chain System. GST has forced companies to re-evaluate the entire system and move from having their own branches to a model of appointing super distributors. However, finance is a function which liaison’s and impacts every other business goal. Hence, the business discipline needs to originate from finance and close with a sanitized and informative MIS for the management. Data management system, effective flow of information, defined procedures, defined accounting heads, defined process owners for each function, knowing vendors and customers more systematically, and many more such progressive steps goes a long way in defining business success. Each activity needs to be completed as per the set deadlines and a mechanism for real time identification of any process or revenue leakage. Management information System is an important financial tool of the organization which helps the management to evaluate their business, make decision and track the progress of the organization.This infrastructure must be capable to scale with growth and continue to provide higher levels of performance. Complying with GST is easy, we need to be only informed and systematic.
CA Nidhi Tatia

(The author is a member of ICAI who specializes in GRC implementation and may be reached at nidhitatia@devmantra.com)

 

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