Accounting software for startup and small businesses to help with GST

Following recent guidelines, any business has to file for GST returns monthly, quarterly or annually, based on the type of business.

A GST return is an account of income which a taxpayer is supposed to file with the tax authorities of India. To file for GST returns, GST acquiescent invoices are required, of sales and purchases. The authorities use this to calculate your tax liability.

GST returns should include:

  • Purchases

  • Sales

  • Output GST (On sales)

  • Input tax credit (GST paid on purchases)

As a rule, any regular business has to file for GST returns thrice monthly and once annually, making it 37 times in the entire year.

It is an absolute necessity under the current regime, but it can get tiring and tedious nonetheless. It is comparatively easier for large businesses who have their own personnel hired for this exact purpose, or sometimes have entire units dedicated for this.

Things are different for small businesses, however, who have little funding and cannot always afford to hire people for accounting and sales. They have to do it by themselves, or rely on freelance financial experts who can sometimes be difficult to deal with.

Some small businesses do not yet have computerized finance systems, and most of the work is still done by hand on paper, which is extremely time consuming and can be erroneous. Some rely on Microsoft Excel and other spreadsheet softwares, which make the calculating easy, but the data still needs to be entered by hand and does not guarantee the prevention of errors.

What’s the startup idea?

The idea is quite simple, really. It is to bridge the gap between small companies and a smooth, efficient return filing system by providing them with software or a platform that will do the accounting for them.

There is a need for software for this kind, especially among smaller businesses because otherwise they have to rely on inefficient methods of accounting.

As a start up, you can provide your clients with exactly what they need. Here are some ideas:

  • Every registered person/organisation must maintain records of:

  1. Production or manufacture of goods

  2. Inward and outward supply of goods or services or both

  3. Stock of goods

  4. Input tax credit availed

  5. Output tax payable and paid and

  6. Other particulars as may be prescribed.

You can help your clients by providing them with separate ledgers in their account to store relevant date for each.

  • You can make accounting easier by installing algorithms that enable auto-accounting, where the clients just have to enter date under headings that are already marked and easy to understand.

  • You can hire accountant and financial experts to handle the finances of many small businesses at a time, for example, 5 clients per expert. This will ensure that every client gets the attention and personalized service they deserve, and also make your website more efficient.

  • You can create a network of CAs and financial advisors that clients can approach when they require help.

  • You can include step by step details of the Goods and Services Tax Network of India, so that your clients know exactly what to do when they log on to create their own accounts.

  • You can also have an option where your clients get some free tutorials and pointers on how to write correct tax invoices.

  • You can have separate sections on your website for every type of GST return filing, namely:

  1. GSTR-1: The taxpayer records all his outward goods and service details in this form.

  2. GSTR-2A: It is available for taxpayers to see and validate their information.

  3. GSTR-2: This is a culmination of all the inwards goods and services approved by the recipient.

  4. GSTR-1A: Auto-populated form that is filled with changed details, if any.

  5. GSTR-3: Auto-prepared form that has the details of both inward and outward goods and services as mention in GSTRs 1 & 2.

  6. GSTR-9: The annual tax return that the company has to file by 31st December of the coming financial year.

  • You can provide them with steps about how to file each type of GST returns.

  • You can have scanners which check for mistakes in the forms before your clients submit them for returns.

We believe a software that does all of the above (and more, ideally) could be a revolution, and companies, especially small businesses would be willing to pay a lot. If promoted and marketed correctly, it will probably be the next big thing.