GST is till date the biggest tax reform known that brought a uniform taxation system with many positive implications for the industries and trade. Ever since GST regulations came in the scene, many businesses, manufacturers, and traders are in confusion regarding the calculations of new taxes. They are facing several transitional issues in acknowledging such a modified and encompassing tax system even though it is far better than the earlier fragmented dicey tax system. However, ERP is providing them with the facility to comply with GST and embrace the changes wholeheartedly. ERP of renowned platforms like Oracle, SAP, Odoo is helping companies to administer and adopt GST system, including taxes computation, configuration, liability accounting, master data amendments, reporting, and so forth.
Read on below to know how ERP systems roll out a complete solution for businesses and services firms to comply with GST rules and undergo tax calculations.
Chart of Accounts
Businesses earlier used to have a separate accounting code for computing VAT (Value Added Taxes) and ST (Services tax) in all goods and services transactions respectively. But, now those codes get combined with GST in the ERP’s tax module. After the new regulations, the tax module of ERP carries forward the closing balance of the tax credit from the current to the new account codes.
ERP’s tax module will help firms to calculate their tax returns on the sales and purchases data. It then audits the amount before filing the GST returns. This saves up enormous time of the company’s accountants and helps them immensely when the daily transactions of goods or services are huge.
Error-free Tax Returns filing
Besides supporting all forms of GST transactions, ERP’s tax engine help in easy identification and correction of all errors for the painless filing of tax returns. Further, it assists companies in exporting of tax returns statement to MS Excel system to upload or later share with their Chartered Accountant, or tax practitioner.
Data Archiving & Protection
Businesses can save, archive and safekeep their tax data for a number of years at one place in an organised way. So, they can later access it any time if needed. Being able to access from a cloud source point, tax accountants can work real-time without needing any manual data.
ERP is providing the facility to master all information about GST regulations in a separate GST module. It enables the businesses or taxpayers to comply with GST while issuing invoices for transactions. It configures the format for GST compliant invoices as per the business, auto-calculates the GST returns from every sale or purchase invoice and reconciles them.
All said and done, getting an ERP system GST ready is challenging job for the companies. Their existing system needs major revamping and they must know which of the modules will affect and which will correlate to new tax rules.
While smooth transitioning to a GST compliant ERP is still a costly affair, especially for SMEs, several ERP companies are launching reasonably priced GST-enabled ERP software to ease their process of GST return filing. With it, instead of filing all the returns manually, they need to just put in all sales and purchase invoices details and the GST returns gets computed automatically.