Simple ROI logic for Small and Medium Enterprise

SME being unorganized with limited capital can benefit enormously by using ERP on cloud.

A typical scenario of Inventory in SME is over stocked or underutilized. Just in time inventory can be easily achieved reducing holding cost by around 20%.

Customer order managed efficiently can bring more repeat orders and build good reputation. Easy email alerts, order status reminders can help. It is an immediate result of ERP implementation.

Outsourcing your payroll, recording your leads manually can be replaced. ERP payroll system linked with incentive formulas can be effective. Mobile based on spot lead recording and tracking can exponentially reduce administration cost and increase sales efficiency.

Operating and maintaining huge server infrastructure vis-à-vis cloud system can reduce IT operational cost by 30%.

Looking at the above even if SME choose to have private setup, they have a profitable preposition.

Contributor - Vineet

Quick Response Code (QR Code)

The scattered black and white boxes nowadays seen at the bottom of most newspaper advertisements is a barcode that can be scanned by smart phones. The QR application on the smart phone immediately opens up related website or shopping cart or product and services linked to that barcode.

This has created immense opportunity in the world of advertising and customer focus experience. This technology as of now is limited to mobiles and effective for mobile campaigns.  

Users scanning the code with their mobiles can be rewarded with discounts, offers, recharge and other information through advertiser’s website. The user can now get more information (extended information) by getting navigated from a tangible newspaper advertisement to a virtual experience so conveniently by a click and scan and giving the advertiser exclusive interaction moments.

QR Code has opened a whole new world of marketing and advertising for marketers.  

Contributor - Vineet

Reduce cost in Small and Medium Enterprise (SME) with Cloud services

In the early 90’s free email services like Hotmail was a big success. The immediate need of common man to have a personal email address was resolved. People still preferred paid email accounts provided by Internet Service Providers (ISP). The lack of knowledge and credibility of a free hosted service was the bottleneck. Nowadays every individual or SME has an email account on the web.

In fact, it is widely accepted that Email has been the biggest gift by Information Technology to the community. The trend is moving from desktop environment to a managed hosted environment where all technology hassles of organizations are outsourced.

For a major section of SME cost has always been the driving factor. By adopting the hosted (cloud model) solutions the capital expenditure is completely eliminated. An SME has limited resources and face challenges in managing IT infrastructure. The view of businesses is changing as it happened with email a decade ago.  

Every SME is trying to adopt simplified technology services and focus more on their critical functions of the business. The earlier they move the better (first mover advantage) in competition.  

Contributor - Vineet

Union Budget Review 2012-2013 on SME, IT and GST

In this Union Budget of 2012-13 no significant reforms are seen and the review is mixed. The deficit of 5.1% for 2013 is disappointing. The overall budget for the small and medium IT sector is not encouraging apart from some promises on GST, which affects the SME, IT and eCommerce.

The Service Tax has been raised from 10% to12%, which will definitely hit the demand for domestic software services and effect small and medium local IT players. The rise in the technology spending towards Unique identification authority of India (Aadhaar project) , LPG transparency portal is good news for IT but no special attention towards transparency inallocation of such project to smaller IT service providers. The budget is silent on the ambiguity on taxation on software product and services.

Overall rise in excise duty from 10% to 12% except textile may marginally benefit the textile industry but overall has dampen the spirits of the end consumer.

The India Opportunities Venture Fund of 5000 cr. sponsored by government through SIDBI will boost the MSME and is good news for start-ups and entrepreneurs.

The increase in funds (doubled from 1000 to2,500 cr. ) for National Skill Development Corporation will benefit the SME to employ more skilled labour. The generalising of income exemption and raising to Rs.2,00,000/- is a good move in this budget.

The introduction of GST by August 2012 will boost overall performance in the SME sector. The setting up of GST dispute settlement authority is a good move.  The common GST Network (GSTN) setup for filing returns will streamline tax functions from SME.  The multiple taxpoints will be eliminated and uniformity of tax will give SME a better workspace. The compliance process in the complete supply chain will become simpler. Uniformity across the country will help Chain stores across different statesand also simplify eCommerce and eRetailing. It is good news for business software providers who will do away with the nightmare of dealing with various compliances and statutory needs in different part of the country.

Contributor - Vineet

Challenges in implementing GST

The proposed model of CGST and SGST with multiple tax rates will not be simple to implement.
Determining of Input Credit benefits between goods and services is difficult.

In certain states taxes like VAT is yet to properly administer and introduction of GST can be over burdening them.
 Apart from the above the government has to address challenges posed by the states andto arrive at a consensus in the Empowered Committee of States Finance Ministers. Due to lack of public information it is difficult to assess the finer benefits and disadvantages of new system.

Contributor - Vineet

The benefits of GST for SME

Goods procured from within the state oroutside the state will be eligible for tax credit. It allow trader to offergoods at a lesser cost.
Service industry can take tax credit of taxon goods purchased and set off against tax payable on services.
Uniformity in taxing system across statewill simplify the tax compliance issues.
 Manyambiguities in levied tax on service and goods will be addressed.
SGST Threshold of annual turnover isproposed to be 10 Lac and CGST threshold for annual turnover is proposed at 1.5Cr and is in the interest of SME

The idea behind the GST is to have aliberal and simplified taxing system and encourage to pay taxes. The tax burdenwill be evenly distributed in the supply chain and for regular tax payers itwill be less complicated.
Lot of ground work in each state is stillrequired for which the centre agrees to pay for the costs. It is unlikely to beintroduced in this session.

Contributor - Vineet

Impact of GST on SME and small IT companies

Certain reforms are absolutely necessary for India to keep up to the Global economic reforms and trends. GST is one of such topic which is looked upon with great hope.

From a SME point of view it has never been addressed before:

Radical reforms in the taxation are absolutely necessary for SME throughout the country. It is deterrent to growth and expensive to comply with complex statutory obligations in the present structure.

A considerable time and energy of management in SME is consumed in resolving and complying with tax regime.  GST hopefully will eliminate all types of taxes applicable related to goods and services, which will simplify business processes.

Multiple taxes on the same product will not be levied as credit for tax paid will be streamlined. This will reduce costs in the production process and overall cost of goods and services for the end user.
Some key benefits for SME aspiring to go national will face little or no problem as tax rates will be uniform nationwide and standard pricing can be maintained throughout the country and of course saving from the nightmare of state wise statutory compliance. 

Enormous confusions/ambiguityin interpretation of software as taxable through service tax route or sales taxroute will be addressed for small IT firms into domestic sales and services.

It is unlikely that amendment bill on GST will be tabled in this session of Parliament. Further the proposal to introduce dual GST one for state (SGST) another for center (CGST)and over and above that different percentage (20%) for goods and different percentage (16%) for services will only complicate for SME. For IT software and service providers the ambiguity will continue to remain in identifying a given IT activity as goods or as service.

We all are looking forward to concrete decisions on GST in the coming budget. It will reduce lot of taxation related overheads in terms of time and money in the supply chainand ultimately benefit the SME and the common man/end user. It is bound to stimulate growth and strengthen the economy.

Contributor - Vineet