There are millions of small-scale businessmen operating in various businesses across India. They vary in terms of expertise, turnover, number of employees, customers they cater to, and so on, but there are some common problems faced by the vast majority of SME businessmen. This article highlights five such issues and how technology can be used to solve them.
5 Technological Solutions for Common Issues Faced by Small Businessmen
- Poor Maintenance of Records
A lot of small businessmen don’t keep proper records of their transactions. For small sums of money, there is only a verbal understanding and no written proof. This may not lead to legal issues, but it can make managing finances very chaotic, especially if you deal with a large number of people daily.
Keeping track of your expenses and revenues in an organised fashion can help you run your business better because you can correctly account for every transaction made. You don’t always need a fancy accounting software to help you with this; a simple Excel spreadsheet does the job just as well.
- Online Payment
Many small businessmen are still used to dealing in cash transactions daily, both spending and earning. India has been promoting the concept of a digital and cashless economy for the last couple of years, but it hasn’t quite reached all the small businessmen. Digital payments make a lot of accounting simpler, faster, and more organised.
E-wallets and other online payment systems have been made easy to use for everyone, and at the same time, many businessmen are encouraged to open bank accounts. Some of the apps meant to aid businessmen with taxation also help them keep track of online payments and dues.
- Tax Compliance
Ever since the GST Act was put into effect, many small businessmen have become confused about the rules, the exemptions, the dozen forms involved, etc. Most of them were never used to technology, so making the entire process of registering online and getting a GST no. made it much more difficult for them.
GST software applications have become popular recently. These help such businessmen automate most of the regulatory process like uploading invoices, while also guiding them step by step for other things. To make the taxation system transparent and uniform, all these businessmen – especially those dealing in e-commerce or inter-state deals – must register online and get a GSTIN number.
- GST Invoices
Earlier, an invoice was just a piece of paper with details about a financial transaction, with no specification on the data that should be mentioned. A lot of businesses never gave invoices or made a namesake one. With the GST system in place, registered businesses have to issue only GST-compliant invoices.
Depending on the nature of your supply, you should issue an intra-state, inter-state, or export invoice. Invoices must contain the GSTIN, name and address of the supplier and taxpayer, details of the goods, total amount, the date of issue, and the digital signature of the supplier. Nowadays, software applications let you readily download the GST invoice format (Excel or otherwise).
For example, the template in Excel contains five sections (given below) and has the formulas automatically encoded in the specific cells:
- Header
- Customer Details
- Product and Tax Details
- Billing Summary
- Signature
- Filing Returns
All taxpayers who have registered under the GST (manufacturers, suppliers, etc.) must file their GST returns regularly (monthly, quarterly, etc. based on the type of form you need to use). The different forms like GSTR-1, GSTR-2 etc. are for different categories of taxpayers, filed at different intervals. Software services have made this complex process very simple.
You have to log in to the GST portal, fill in the GSTIN and other details, upload all your invoices and submit the relevant forms. The GSTN (GST Network) stores the information of all the buyers and sellers, maintains registers and also consolidates the submitted details for further reference. The GST portal lets you download the GST Certificate free of cost, thereby making it easier to file returns.
Conclusion
As a small businessman facing one or more of these problems, you now have some idea of how you can employ technology to assist you. If you are new to tech and digitisation, you need not worry. Several companies have designed software services dedicated to helping small businessmen as yourself take their business online.
