38th GST Council Meeting: Updates and Highlights

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The 38th GST Council meeting held on 18 December 2019, Wednesday was chaired by our Hon’ble Union FM Nirmala Sitharaman and conducted at New Delhi. A presentation was made to the 38thGST Council on the issue of revenue, GST rate structure and compensation needs of the States. Before the presentation, the Convenor of GoM on revenue augmentation Sh. Sushil Kumar Modi, Dy CM (Bihar) made opening remarks about the revenue position and future roadmap.

Here are the main decisions that were taken during the recent meeting.

GST Updates:

  1. Due dates extended for GSTR-9 and GSTR-9C for FY 2017-18 till 31 January 2020

The due date of GSTR-9 and GSTR-9C are extended further till 31 January 2020 from the earlier date of 31 December 2019. It was done to allow more time for taxpayers to use the offline tool of GSTR-9C that is expected to be made available on 21 December 2019.

  1. Provisional ITC claim in GSTR-3B further restricted:

The amount of ITC availed on a provisional basis restricted to 10% from the earlier 20%, where invoices or debit notes are not reflected in GSTR-2A. Hence, invoice matching must be frequently done, and vendor communication becomes challenging.

  1. Late fee waiver on GSTR-1 through amnesty scheme:

Waiver of late fee for GSTR-1 for tax periods between Jul 17 and Nov 19, if filed by 10 January 2020. If the taxpayer does not still file for more than two consecutive tax periods, then e-way bills of such taxpayer will be blocked from generation.

  1. Standard Operating Procedure (SOP) in case of non-filing of GSTR-3B defined for taxman:

The SOP is to be released for the benefit of tax officers about actions taken for non-filing of GSTR-3B. These will help in blocking or reversal of fake ITC availed.

  1. Due dates for GST returns extended for certain category of taxpayers

The due date extension for GST returns for some North Eastern States (November 2019) to be extended till 31 Dec 2019.

  1. The GST Council decided to levy 28% tax on all lotteries

  • Opts for voting to conclude the matter
  • Date of applicability is 1 March 2020
  • Prior, GST rates on lottery schemes were as follows:
  • State-owned – 12%
  • State-authorised – 28%
  1. GST Rate rationalised to remove inverted tax structure

The GST Council imposes a uniform rate of 18% from earlier 12% on bags belonging to HSN code 3923/6305 from 1 January 2020 (woven and non-woven bags and sacks of polythene or polypropylene strips or the like, whether or not laminated, of a kind used for packing of goods including FIBC). It effectively removes the inverted tax structure.

  1. GST exemption for the industrial land developers:

Supply should be a long-term lease of an industrial or financial infrastructure plots. The Central or State Government holds 20% or more shares in the developer’s capital from the earlier share of at least 50%. Exemption to apply from 1 January 2020.

Other Decisions:

  • Amendments to the GST law to be taken up in the Union Budget 2020-21. Several thoughts deliberated on GST revenue augmentation. Grievance Redressal Committees (GRC) will be constituted at Zonal/State level to address grievances of specific/ general nature of taxpayers.

How Automation of Sales and Purchase Register Has Helped Businesses

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Sales and purchase are the two most important functions of any business. Transactions with these natures keep a company running and so they should be recorded accurately, timely and seamlessly. While most accounting software would provide this feature as it is a basic need that any entrepreneur is looking for when adopting technology for their business, what’s important is how much can a user make out of these simple reports and add value to their business.

Sales and purchase registers have been maintained by companies since the inception of accounting. Traditionally, these were maintained manually, sales and purchase books recorded all the transactions which occur every day. However, with digitisation taking the world by storm, business owners have now automated maintenance of sales and purchase register through various accounting software.

Recording sales and purchase transaction is no rocket science, and once these transactions are recorded, their respective registers are created. Sales and Purchase register is nothing but a comprehensive day book which comprises of all the transactions which you have recorded so far. This report will help you get a detailed view of all your transactions which have been made throughout and allow you to make any corrections if required.

Advantages of automated Sales and Purchase Register

  • With a sales register, you can analyse a periodic turnover of your company, be it monthly or yearly. You get a consolidated report of each sales transaction that you have done for a specific period.
  • You can also easily navigate to the respective invoices and vouchers, in case there are any errors detected post sales.
  • Purchase returns made during a year can also be traced. At any given point, if your customer returns with an invoice issued by you, and addresses any grievance which is product-related, you can easily go back to the entry made at the tarnation level and modify the data accordingly.

With Tally.ERP 9’s Sales and Purchase Register, you can easily view all your transactions in a split of a second. Detection of errors and the ability to correct it with numerous shortcut keys, will help you save a lot of time and effort. Because of Tally.ERP 9’s flexible nature, navigating to the respective transactions till the entry-level and then correcting it with the right value, becomes very easy. Sales and Purchase Register Tally isn’t just confined to giving you a gist of all the transactions but also track transaction-level profitability to get more insights about your business. With the columnar view of the purchase transactions, you can get a detailed view of each purchase transaction which is a great reference point to check for any discrepancies and inaccurate entries. For adding more value to your business by getting consolidated sales and purchase reports, take a free-trial here.

Ratio Analysis: How it Helps Determine A Company’s Financial Health

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Determining the financial health of your business depends on several aspects. One of them is ratio analysis which draws a clear comparison of line items in the financial statements of a business. Ratio analysis is a powerful tool for financial analysis. The report indicates the health of the business using the defined formula. The higher / lower ratio indicates good /poor liquidity position of the business. This report is not just useful for the stakeholders outside of a firm who do not have direct access to other crucial financial statements like balance sheet, profit and loss statement, etc, but also for internal management. Ratio analysis report permits the stakeholder of an entity to make better sense of the accounts and better understanding of the current fiscal scenario.

Objective of Ratio Analysis

While ratio analysis helps a business owner understand the overall financial health of his company, it also becomes a vital tool for financial management. With a clear understanding of the company’s finances, an entrepreneur can easily take crucial business decisions which would impact his company’s growth and profitability. Here are some of the most crucial objectives of ratio analysis report:

Profitability measurement

Profit is always the ultimate motive behind running a business. If a company is selling goods on a large scale, that does not necessarily mean that it’s making profits. The crucial part is drawing a comparison of two numbers with respect to each other and calculate the net profit. Ratio analysis also helps a company in determining the use of its assets and how these assets are incurring profits. To measure profitability, you must get adequate information on Gross Profit Ratios, Net Profit Ratio, Expense ratio etc which measure the profitability of a firm. The management can use such ratios to find out problem areas and improve upon them.

Evaluation of Operational Efficiency

Certain ratios highlight the degree of efficiency of a company in the management of its assets and other resources. It is crucial that assets and financial resources be allocated and used efficiently to avoid unnecessary expenses and prevent cash blockages. Turnover Ratios will point out any mismanagement of assets. A single ratio may sometimes give some information, but to make a comprehensive analysis, a set of inter-related ratios are required to be analysed and that’s exactly what ratio analysis does.

Ensure Suitable Liquidity

Every firm must ensure that some of its assets are liquid, in case of emergencies when cash is required. Thus, the liquidity of a firm is measured by ratios such as Current Ratio and Quick Ratio. These help a firm maintain the required level of short-term solvency.

Determine Long-Term Solvency

There are some ratios that help determine the firm’s long-term solvency. They help determine if there is a strain on the assets of a firm or if the firm is highly in debt. The management will need to immediately address and rectify the situation to avoid liquidation in the future.

Working Capital Ratios

Like the Liquidity ratios, it also analyses if the company can pay off the current debts or liabilities using the current assets. This ratio is crucial for the creditors to establish the liquidity of a company, and how quickly a company converts its assets to bring in cash for resolving the debts.

With Tally.ERP’s Ratio Analysis report you can get a clear picture between the principal groups and key figures in detail instantly without any added efforts. From determining the efficiency ratio to sundry debtors and sundry creditors to the inventory turnover, get information about all the crucial aspects which impact the financial health of a business in a single shot. Another important lever which regulates regular cashflow in your business, payment performance of debtors is also detailed out in ratio analysis. Both the receivable turnover in days and the customer’s actual payment performance is displayed in the report which helps you take appropriate decision to avoid blockage of cash. To get a better understanding of how ratio analysis will help you get a clear picture of your company’s finances, take a free trial now.

Stock Summary Report & its Advantages

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Stock analysis is extremely crucial for any business as stock play the role of a company’s heartbeat. From stock movement to reordering to stock ageing, various reports are involved in order to get the right information about your business’ inventory. It is only with these crucial reports can one identify the important aspects of stock items and thus take business decisions worry-free. One such report is Stock Summary.

What is Stock Summary?

A Stock Summary is a statement of the stock-in-hand on a particular date. It is one of the primary inventory statements that updates the stock record in real-time as and when transactions are entered. Stock Summary provides information on stock groups and shows the quantity details, rate and closing value of the stock items under them.

Benefits of Stock Summary Report:

  • You can view the entire stock flow ranging from opening stock goods inwards, goods outwards to the closing stock can be analysed in terms of its quantity.
  • You can identify and view the available stock at different locations and take purchase and sale decisions accordingly.
  • A clear view of purchase and sales order outstanding which will further help you decide on the actionable tasks to improve your business’ cashflow.
  • It gives you an insight into the quantitative movement of each stock item.
  • With details about the Nett Stock, you can even establish great relationship with your consumers by giving them suggestions and alternative choices when the demanded stock is unavailable.

The Stock Summary report with stock valuation methods can be used to view the effects of different methods on the value of stock. Each stock item can be set up to have a different stock valuation method. In some instances, a particular method of valuation may be required, for example, to assess the replacement value or saleable value of stock. Tally.ERP 9 displays stocks in any or all the valuation methods dynamically and simultaneously, without any complicated procedure. Tally’s stock summary report is so dynamic that apart from just showing you a list of inventories, you can do so much more. You can also view profitability and consumption details for each stock item and will give you a drill down of each stock item to track the micro-level details which are crucial for planning way ahead. Quite interesting, isn’t it? Take a free-trial of Tally.ERP 9 today and manage your business more efficiently.

How Re-order Level of Stock Helps Keep Your Company’s Financial Health Stable

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Optimum stock is the key to manage inventory successfully. Overstocking will lead to blockage of cash and add up to certain risks such as price fluctuation, cost of managing excess stock, dead stock etc. This means that excessive stock may lead your business into losses.

Detecting the correct re-order level is extremely crucial. If an order is placed too soon, it would incur extra costs which include, warehousing rent, opportunity cost, etc. These costs are classified as “carrying costs” which also affects the overall financial health of your business. However, if the company places an order too late, it would result in stock-out costs, for example lost sales, etc

Some of the most crucial benefits apart of keeping your company’s finances steady which re-order levels of inventory reap are:

  • Automatic generation of a replenishment order at the appropriate time by comparison of stock level against re-order level inventory controls
  • Appropriate for widely differing types of inventory within the same firm
  • This report will help you in taking the appropriate decision for timely Purchase of Materials and will readily provide all relevant information required for placement of a Purchase Order.
  • Monitoring stock levels to see when the “re-order point” has been reached. The re-order point is the point at which the stock gets low enough that it’s time to order further stock.

Maintaining a company’s financial health remains a top priority for any business owner and accurate management of inventory triggers that. Reordering of your stock without incurring any additional expenses could be a bit challenging but it certainly isn’t impossible. Especially with a software as flexible and reliable as Tally, you can ensure that you never run out of stock.

To simply put, Tally.ERP 9 accepts the quantities that you want to specify. In advanced mode, it considers the previous consumption patterns to suggest re-order levels. However, you can define your own reorder levels. You can also specify the minimum quantity of the item to be ordered, either in simple or in advanced mode. Keen to explore more about of stock? Take a free-trial right here!

What is Physical Stock Voucher and Register and Its Benefits in Inventory Management?

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Inventory and stock play a significant role in defining a business and its profitability, and it is a well-known fact. One of the most crucial features every business owner expects in an accounting software is for it to be able to track inventory accurately and seamlessly. For any business to efficiently manage its activities, the stock needs to be recorded error-free. Any business owner who is looking for a business software demands it to be robust and flexible, so that at any given point data can be altered as per the requirement.

Physical Stock Voucher is used for recording the actual stock which is verified or counted.  It could happen that the Book Stocks and the Physical Stock do not match. It is not unusual that the company finds a discrepancy between actual stock and computer stock figure. In such scenarios, the software must give you the flexibility to accommodate such discrepancies so that your books and stock-in-hand match. Physical stock differences must not be ignored by any business as stock management can make or break your business.

Often while running your physical audits, you may encounter some discrepancy in stocks. With physical stock journal, you can easily make the changes so that you can take your business decisions accurately without affecting your profitability. Mismatch between the value of closing stock recorded in the company books and the actual physical stock in the godown can arise due to

  • Inaccurate stock records
  • Theft, damage, loss, and so on

These discrepancies can be rectified by passing a physical stock voucher so that the closing stock as accurate.

With Tally.ERP 9’s physical stock register feature you can easily assess the available stock and find out about the inventory discrepancies in your books. This way you can effortlessly adjust the stock values and even derive to conclusions as to why your book stocks do not match with your physical stock. Physical stock vouchers offer you a great deal of flexibility in terms of recording of stocks with the help of which you can easily and seamlessly manage and view the status of your inventory at a single shot. With the feature of narrations, you can even clearly view the reason behind various inconsistencies and manage your business more efficiently.

Wish to streamline your inventory management more effectively? Take a Free Trial here, right away.

37th GST Council Meeting Updates

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The GST Council, headed by Union Finance Minister Nirmala Sitharaman and comprising representatives of all States and Union Territories (UTs), had its 37th meeting in Goa in the backdrop of economic growth hitting a six-year low of 5% for the first quarter of the current fiscal. This GST Council Meeting was extremely crucial as various industries were looking forward to some major decisions to be taken in terms of tax slabs.

There have been demands pouring in from various sectors — from biscuits to automobiles and FMCG to hotels — to reduce tax rates in the wake of economic slowdown.

Here are the key decisions during the 37th GST Council Meeting held in Panaji, Goa which are said to be effective from October 1, 2019.

GST Rates Revisions

  • GST Council recommends lower 12% cess on 1,500 cc diesel, 1,200 cc petrol vehicles with capacity to carry up to 13 people.
  • GST rate on caffeinated beverages raised from 18% to 28% with 12% compensation cess.
  • Uniform GST rate of 12% to be levied on polypropylene bags and sacks used for packing of goods
  • GST exempted on specified defence goods not manufactured in India
  • Rate levied on cut and polished semi-precious stones has been dropped from 3% to 0.25%.
  • Jewellery exports to now attract zero GST.
  • GST on fishmeal used by fishermen being exempted from July 2017 to September 30 this year. There was lack of clarity on their GST coverage and no tax was collected so that has been resolved.
  • GST rate hiked on railway wagon, coaches from 5% to 12%.
  • For Transaction value per unit per day of ₹1000 or less, will attract nil GST. For ₹1001 upto ₹7500, now the tax rate will be 12%. Anything above ₹7501 will attract 18%. It was 28% till now.
  • To reduce the rate of GST on hotel accommodation service as below:
Transaction Value per Unit (Rs) per day GST
Rs 1000 and less Nil
Rs 1001 to Rs 7500 12%
Rs 7501 and more 18%
  • To exempt services provided by an intermediary to a supplier of goods or recipient of goods when both the supplier and recipient are located outside the taxable territory.

New Returns

  • Waiver off the requirement of filing FORM GSTR-9A for Composition Taxpayers for FY 2017-18 and FY 2018-19
  • Filing of FORM GSTR-9 for those taxpayers who (are required to file the said return but) have aggregate turnover up to Rs. 2 crores made optional for FY 2017-18 and FY 2018-19
  • A committee to examine simplification of Forms for Annual Return and reconciliation statement
  • New return system now to be introduced from April 2020 (earlier proposed from October 2019)
  • The imposition of restrictions on availing of input tax credit by the recipients in cases where details of outward supplies are not furnished by the suppliers.

Other Crucial Updates

  • Group insurance schemes for paramilitary forces under the Home Affairs ministry to be exempted from GST.
  • Aerated drink manufacturers shall not be under the composition scheme anymore.
  • Rate reduction on hotel accommodation services.
  • Job work services related to diamonds reduced from 5% to 1.5%. For machine job works in engineering industry, GST down from 18 to 12. But bus body building works still taxed at 18%.
  • Restriction on refund of compensation cess on tobacco products (in case of inverted duty structure)
  • Reasonable restrictions on passing of credit by risky taxpayers including risky new taxpayers
  • Link Aadhar with registration of taxpayers under GST and examine the possibility of making Aadhar mandatory for claiming refunds
  • Integrated refund system with disbursal by single authority to be introduced from 24th September 2019

How Godown Summary Helps in Better Inventory Management

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Inventory and stock management is the heartbeat of every business. Especially businesses who are players in the retail sector, need to diligently manage their stock position for the entire company as well as stock-in-hand at each location. While there are several inventory reports which give you a detailed summary of the stock, Godown Summary is one such report which drills down to display the available stock at each location where your business operates and helps you take crucial inventory-related decisions seamlessly.

4 Key Benefits of a Godown Summary Report

1. Access to stock-in-hand at different locations

Companies use the Godown Summary report to track inventory within factory premises at various manufacturing stages or workstations. The statement provides current stock position for any godown or location at any time. The benefit of having enough stock-in-hand is to meet the demand of your customers. With this report, business owners can seamlessly decide on how to use the stock accurately. Since the statement will give you the location details, you can decide how and where to use the stock without spending any extra amount in the transportation from one location to another.

2. Compare Stock Balances

Efficient stock control allows you to have the right amount of stock in the right place at the right time. It ensures that capital is not tied up unnecessarily, and protects production if problems arise with the supply chain. Godown Summary report gives you a thorough comparison between the stock balances or stock item quantities, rate and value with other godown(s)/location(s) for the different periods which lets you clearly draw comparisons between the stock available in different godowns. This report will also enable you to assess the slow- and fast-moving stocks over a period of time which is helpful for crucial decision making at an inventory level.

3. Stock Visibility

With the help of a Godown Summary report, you can non-transacted stock to alternate units to third-party stock which is in the warehouse. There could be numerous reasons why you might have sent stock to a third-party vendor and vice versa. The Godown Summary report will help you get a consolidated view of the stock whether physical/non-physical, which will further reduce working capital and increase profitability.

4. Customer Satisfaction

When you get a consolidated report of where your stock is physically, you can easily decide on the customers when the demand increases. Instead of informing your customer about the unavailability of the stock, you can advise him to approach the nearest warehouse as per his suitability where the stock is available. You can also take important decisions like how much time and money would you require to invest in order to deliver the stock to your consumer. Basis this, you can even communicate the timeline to your consumer which results in increased customer satisfaction as you can deliver the desired product as per the promised time.

As per Tally’s interpretation, the word Godown it is not limited to physical godown. Companies may use it to track inventory within factory premises at various manufacturing stages or workstations. Further, it is also required to track inventory of raw material and semi-finished and finished product under Job work activity either in case of material transferred on job work basis or for job work undertaken by the company. There is functionality in Tally’s godown master to mark it as own stock of company or third-party stock (i.e. material received for Job work and final product produced out of it by the company). As per accounting principles, such inventory of third party shall not be mixed up with companies own inventory. Tally.ERP 9‘s robust feature takes care in efficiently managing such inventory through the Godown Summary report. Find this feature interesting? Take a Free Trial right here and see how this particular report will help in your everyday business activities.

Stock Query and Its Benefits For Better Inventory Management

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Stocks play the role of a heartbeat in a business setup. Accurate tracking and movement of stocks help define the profitability structure which further aids in assessing the future growth of a company. One such critical report to help you make better inventory decision is Stock Query Report. A stock query report helps you get detailed information about the stock. Not only will this give you an idea about your future investments in various stock items but also aid in making crucial business decisions. Here are some of the most interesting and insightful benefits you can reap out of stock query reports:

Benefits of Stock Query Report

· Identifying Top Buyers and Sellers

For any business owner, one of the most important things is to establish a thorough understanding of your loyal and topmost buyers and sellers. This will not only impact your business’ profitability but also help you make informed decisions about your stock. The buyer-seller relationship always needs to be maintained well, because effective management of this, defines the dynamics of buyer-seller evolution. Stock query report allows you to display the top buyers and sellers for an item, based on value or quantity. This will ultimately help provide a level of stability and encourage long term commitment from different parties towards achieving results.

· Stock Availability in the Warehouse

Often there are some items which are in high demand and it gets difficult to keep a track on them. However, with a stock query report, you can easily view the stock item available in the warehouse, to make a sale. The advantage about the stock query report is that you can easily view the number of items available in the warehouse at the invoicing level, so that you can give a clear and timely response to the customer at the time of billing.

· Alternate Stock Items

At times, during a particular sale, you find out that the item being enquired for by the customer isn’t readily available. In such scenarios, a good businessman wouldn’t want to lose out on the customer by informing him about the unavailability of the product. But with a stock query report, you can easily view and draw attention towards the alternate choices that the customer could opt for. This will not only help you retain the customer but also help you avoid any kind of monetary loses due to the unavailability of the product.

· Information About Last Sales

Isn’t it common to get confused between the pricing when you have multiple products to deal with? A stock query report will help you get the historical details of the price which will help you make more informed decisions at the point of sale without making you incur any losses.

Since all the necessary information related to stock item is readily available at a single click at the invoicing stage, stock query report in Tally, helps you save precious time. By giving your customer clear-cut information about the product in demand, you can maintain a healthy relationship with them. Stock Query report will also help you make informed decisions as you will have access to crucial information about various stock items in a blink of an eye.

Quite appealing, isn’t it? To get a thorough view of your stocks, take a free trial today, right here!

Payment Performance of Debtors and How It Helps Maintain Cash Flow

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Understanding Debtor Management

Debtors make an important position in the structure of current assets of your firm. Your debtors would earn credibility based on their credit score and payment performance which is evaluated based on the payments to your firm they have taken credit from. Trade debtors represent amounts owed to the firm as a result of credit sale of goods or services in the ordinary course of business. The key function of credit management is to optimise the sales at the minimum possible cost of credit.

Each firm has its own credit management policy based on which it decides to provide a timeframe for debtors to pay their dues. The formulation of debt management policy seeks to achieve a balance between extending sales and the likelihood of these sales being profitable and collectable. It is quite possible that the receivable turnover is low, and the payment performance is high, indicating that the customers cleared their outstanding, but took a long time doing it. That’s when an accounting software would aid in assessing both the receivable turnover in days and the customer’s actual payment performance.

Benefits of tracking the payment performance of debtors

Identify Customers Sticking To Deadlines

A payment performance report will help you understand and identify the customers who make stick to the deadlines given to them by you. This not only helps them maintain a good credit score but also enable you as a business owner to have a steady cash flow. Prompt collection of debtors’ accounts will also help you maintain a healthy cash flow. Proper management of your debtors will help you get paid faster and prevent bad debts

Identify and Draw Attention Towards Late Payers

Since a payment performance report will give you a full view of the perpetual debtors who refrain from clearing dues as per the timeline provided by you, there are several effective ways in which you can communicate the same to them. As soon as you identify that payments from a particular customer are slow, ensure that you react quickly so that your business doesn’t take a hit in any way. Some of the ways to deal with slow performing debtors include, selling goods at a cash discount if they pay on time, offering them with extra benefits and functionalities (in terms of services) if they adhere to the timeline, etc.

Defining Credit Policy for Debt Control

It is believed that credit policy stimulates sales as it helps in retaining existing customers with a good credit score, and winning clients from competitors. The policy of credit management clarifies the objectives of the company and set best practices that must be followed by the entire organization. Defining of “standard” model for stakeholders and customers will help you smoothen the process of debt collection and mitigating any risks which could affect your company’s financial status.

With Tally, you get a consolidated report of performance of actual payments and the payment history of the customer to assess how long he takes to pay the outstanding balance. Not only will you get to know the actual history for each payment that was made by the customer, but also when the invoice was paid, how long it was due and what was the delay in payment. To know in detail about this crucial feature in Tally, click here! You can also try it out for free here, and see how tracking of payment performance of debtors could impact your business in a huge way.