Tag: Small business

Top 10 Things You Need To Know About GST

Top 10 Things You Need To Know About GST

Goods and Service Tax or GST, in short, is a boon to businesses. Indian tax system is very complex and has different direct and indirect tax deductions for various products and services. Hence, understanding the tax structure for your small business used to be complicated and very difficult to implement. Now and then, there would be a change in the structure due to volatile components like service tax making the traditional taxation process more intricate.

Imagine an entrepreneur who has just started a business. In addition to the businesses processes, they would also have the additional burden of filing taxes before the deadline, understanding tax credits, and payment procedures entirely to run a compliant business. However, with the traditional taxation structure, there is a lot of scope for mistakes, or rather blunders, which a tax auditor would not agree to look past. This might result in serious legal implications and hamper the business mostly.

GST has simplified the entire taxation process for small businesses and ensures that the structure is easy to understand and implement. There are not many variations in the tax structure for different businesses, which further simplifies the process. So, confused about the things that you need to know? Keep reading.

1. Will my tax burden go down?

GST will have a definite impact on the cascading of tax. That is, the tax will not be levied on a produced well at every stage of its transfer till it reaches the end consumer. This would drastically bring down the tax burden. The input credit can only be demanded in case it matches with the billing statement of the respective suppliers in between.

“Tax will not be levied on a produced well at every stage of its transfer till it reaches the end consumer.”

2. What about my compliance procedures?

GST registration process is aimed at bringing down the burden of compliance on small businesses. However, since the procedure is new and contrasting to what has been followed for these many years, you would require a more stringent compliance procedure to ensure a smooth transition.

3. Will it become more tedious?

It is worth noting that the traditional taxation procedures required you to file for VAT, service tax and all other returns separately, as the input mechanism are different for each tax. However, in GST, you only need to input your purchase and sale details, the GSTN would automatically match invoices for claiming input credits, and the returns and prepared accordingly. Once this process is completed, there is no further requirement to file anything else on a monthly basis.

4. Knowing all the GST rate slabs

At present, there are four proposed tax slabs that you need to know which ranges from 0% to 28%. The first one is the special categories of goods and services which would include all the luxury goods like precious metals and falls in the 28% tax slab. The second category is that of standard goods and services which have a 12%-18% tax slab. The third category is that of goods of mass consumption like oil, tea, and spices with a tax rate of 5%. Grains like rice and wheat, and other essential products and goods are exempted from tax, and there is a proposed cess charge on sin products like cigarettes, aerated drinks, luxury cars, and tobacco which is over and above the 28% levied on standard goods.

5. How do I pay

Once you do the GST registration online you can start filing the returns through GSTN and the tax is calculated based on your liability through sales bills. The valid tax input credits also get adjusted automatically. The amount can then be paid online.

6. How will this system impact my working capital?

One of the points to be kept in mind here is that, while there is no cascading of tax, the working capital requirement would increase significantly in case your supplier or customer is non-compliant with regards to tax filings.

7.  GST returns

This is to be prepared based on your invoices for the stipulated period of return filing. You have to upload the relevant bills, sales register, and other relevant information which would be required to authenticate your returns.

8. Matching credit inputs

You have a period of two months to match your credit inputs post which you will have to revoke all unmatched credits. You can work with your vendors and suppliers for any return which doesn’t get matched after which the final tax return would be prepared and tax liability would get discharged.

9. What should I know about GST compliance?

Ensuring GST compliance is an essential thing after online GST registration. The best way to start is to ensure that all your transactions are recorded in the system and is reportable. One of the inevitable GST registration requirements for small businesses would be to have a technology-aided solution to enable them to be compliant. Such a system can effectively capture and record all the transactions and minimize any loss of records or invoices.

10. What is the most important thing I need to know about GST?

You need to be wary about two types of invoice namely the tax invoice and bill of supply to ensure GST compliance. You can issue an invoice for goods any time before the delivery of the product and for service, you can do so within 30 days of supply of the service. In the case of non-taxable supplies, you are not required to issue a separate bill of supply if you have already issued a VAT invoice. Also, issuing invoices is not essential for a small tax-payer who does a large number of transactions below 200 unless specifically requested by the customer.

 

In Conclusion

Online GST registration has become compulsory for every business person in India with an annual supply turnover of over 25lakhs. This is inclusive of all kinds of legal entities like proprietorship, LLP, partnership, company, society and any other related profit making body. The registration has to be completed within a month of exceeding the annual supply turnover limit. The entire GST registration process is seamless, transparent, straightforward, and is an absolute necessity for all businesses.

“The entire GST registration process is seamless, transparent, straightforward, and is an absolute necessity for all businesses.”

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Should Payroll Management be Outsourced or Kept In-House?

Should Payroll Management be Outsourced or Kept In-House?

Payroll stays an integral part of any business operation. No matter how big or small a company is, payroll happens to be one of the key business activity. And as more and more companies are outsourcing payroll function, the question arises whether to keep payroll an in-house function or involve a third party.

Need of payroll management outsourcing for small businesses

Payroll management administration had always been internally handled by the companies, especially small businesses. But this is not the case anymore. Small companies are gradually realizing that payroll processing is a function that requires expertise. The technological advances, software updates and statutory requirements can be very demanding in terms of time and money.

Payroll management services cover a spectrum of activities including salary and wages calculation, withholding of taxes, distribution of withheld funds to respective government agencies and direct deposit of in-hand salaries into the bank accounts of employees. These tedious and routine functions can keep any business owner or his key employees occupied while they could better have worked on more important revenue-generating or sales-enhancing activities. While saving time, outsourcing payroll services can help cut cost and ensure accurate tax calculations. Payroll companies can offer HR payroll solutions that help to improve a company’s human capital management and benefits.

In a recent survey conducted by Actionable Research-1, nearly 75 percent of CPA’s (Certified Public Accountant) who serve small businesses felt that their clients do not have the necessary expertise to handle the demands of payroll processing. And 68 percent suggested their clients’ time would be better spent working on the many other demands of their businesses.

Payroll management consultants, who had been serving corporate until recently, have been getting requirements from SMEs. Looking at the potential opportunity, many big and small payroll outsourcing firms are now offering customized payroll services for small businesses.

It has become much easier for small and medium-sized companies to leverage benefits of outsourced payroll.

So your small business should keep payroll in-house or outsource?

The case of outsourcing is stronger than ever. Several small companies have already outsourced their payroll function completely or partially. With payroll management services giving wide options to business owners, outsourcing is turning out to be a win-win situation for SMEs.

Small business owners tend to wear too many hats at the same time. But as the business grows this becomes more and more impossible. The processes start becoming more and more complex. This is the time when small businesses should consider the advantages of outsourcing.

Whether you are a start-up or have a considerable strength of employees, you can get benefited immensely from customized and value based payroll solutions being provided in the market. The cost that you spend on hiring payroll professionals, getting required software, regular updated versions of software, technical support, maintaining and securing database – You can instead invest this money on your revenue generation!

Other than being cost-effective, payroll management outsourcing will offer you following advantages –

1) Better Productivity

Outsourcing payroll for SME can save their time, efforts and costs incurred on carrying out payroll operations in-house. They offer customized solutions for different businesses, for instance, some provide the choice of flexible savings accounts or retirement accounts, while some offer specific tax saving proposals and insurance payments. Thus efficiently managing payroll with better productivity.

2) Zero Penalties During Tax Processing

Inappropriate payroll management could lead to inaccurate tax filing resulting in tax penalties. Outsourcing payroll processing services to professionals can save you these hassles and ensure accurate payroll processing. The best part is that third party payroll companies provide tax guarantee benefits, which means if they file or make payments late, it will be they who will be held responsible for covering the cost of penalties.

3) Most Advanced Technology

A constant question for small business owners is whether they have the latest version of their payroll software and the most recent tax tables installed on their computer. You can easily avoid such problematic situation by letting a payroll outsourcing company to take care of it. They use the latest software programs for payroll processing and tax computation for minimizing errors and delays. Also your employee data stays protected through an authorized control panel that you can access anytime.

4) Financial Reporting

Payroll system outsourcing comes with added benefit of having all your payroll related reports ready on time, effortlessly and effectively. Payroll outsourcing firms provide reports such as summaries on earning statements, time sheets, expenses, payroll by departments and several other useful reports.

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Tapping into the benefits of payroll outsourcing can prove highly beneficial for your business. When looking out for an outsource partner make sure it is someone who is professional and reliable. An expert payroll solution provider like Paysquare can be your trustworthy partner. They are one of the most preferred payroll outsourcing company in the market, with an exclusive focus on payroll outsourcing. What makes Paysquare the number one choice is its ability to consistently ensure accuracy in payroll processing across its engagements.

Paysquare’s client portfolio encompasses reputed names such as ITC, Kirloskar, Fiat, Atlas Copco, Johnson Control, Hitachi Consulting, Kimberly-Clark, Marico, Coca Cola and JCB.

Paysquare is the specialist in the area of end to end payroll outsourcing services for small businesses.

Certification and Awards

A SSAE 16 & ISAE 3402 certified organization with ISO 27001/2013 Standards, Paysquare featured among India’s 20 most promising compliance companies Featured by CIO Review for its outstanding contribution in the field of risk, compliance and governance.

Paysquare CEO, Mr. Rakesh Jain, received Sarathi-IT award, felicitated for his outstanding contribution in the field of information technology (IT).

Paysquare CEO, Mr. Rakesh Jain, received IT-Technovation award 2012 from Indira Group of Institutes (IGI), felicitated for his outstanding contribution in the field of information technology (IT).

Similar to Paysquare, Intero also offers reliable payroll services. The company is currently catering to several clients in government, manufacturing, hospitality, real-estate and infrastructure industries.

TopSource is another payroll expert offering comprehensive services. They won the coveted Service Provider of the Year award, by Pay & Benefits Magazine in March 2014.

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