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Updated on: Friday, August 20, 2021, 01:06 PM IST

SMEs, MSMEs should adopt digital accounting for GST invoicing; here's why

Although digital accounting comes with its share of challenges, early adoption can provide that buoy for companies in the SME and MSME sector to stay afloat in the competitive market.  |

Although digital accounting comes with its share of challenges, early adoption can provide that buoy for companies in the SME and MSME sector to stay afloat in the competitive market. |

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Digital accounting can be considered as one of the most remarkable developments, which has undergone significant transformations. It has brought various advantages in the way accounting operations are carried out.

With the help of digital accounting, consumers can easily access their financials at any time while simultaneously offering quick and impeccable services. It assists organizations with battling the inconvenience of managing accounts all the more proficiently and helps them guide, organize, plan strategically, and channelize financial and business measures.

According to new market research by Accounting Today, the accounting software market is expected to grow at an expansion rate of 8.6 percent per year starting from 2018. It will likely have a global value of $11.8 billion by 2026.

Why digital scores over the brick-and-mortar system?

Invoicing is a process that has been digitalized recently. It is slowly becoming the norm, especially in the world of SMEs and MSMEs. Post-GST adoption was one of the most fundamental decisions taken by the experts. It is logically preferred over the standard billing and invoicing structure, and all the credit goes to technological advancements that we have now. Its safety and reliability, along with its contactless and remote methodology, give it leverage over the traditional system. Undoubtedly, the pandemic has further accelerated the penetration of the e-invoicing structure, further leading to growth in the businesses. It will prompt organizations to become a part of the digitally-working economy and profit them as they will be able to handle their finances quickly and effectively.

What are the benefits?

E-invoicing empowers an organization to automate all their invoicing process, which has various operational and strategic advantages. From enhancing accuracy, simplifying administrative tasks, minimizing frauds to saving time and money, e-invoicing offers numerous benefits to organizations and the taxpayers.

  • No room for error: With the help of digital accounting software, the data directly feeds into the business accounts payable system, leaving no room for error. It assists in making the business more fruitful as less time is spent rectifying human mistakes.

  • Saves time and cost: It saves cost and provides business efficiency and revenue-generating opportunities — all due to the ability to automate the invoicing process and integrate with other business systems. When it comes to keeping your financial records in order and up to date, electronic invoices save a lot of time too. It helps to maintain good relationships with suppliers as it enables SMEs and MSMEs to process their invoices faster, thus speeding up on-time payments.

  • Minimization of frauds: Since there is a standard accounting process — all thanks to accounting software — the ability to track data and real-time documentation minimizes fraud.

  • Simplified administrative tasks: Regardless of the size of an organization, be it running a small shop locally or a leading MNC, they have a lot to take care of, right from tracking employee time to managing payroll. Opting for a digital accounting framework can assist streamline the working of SMEs and MSMEs. The organizations will be at ease with all the administrator-related tasks and concentrate on other vital duties.

Although digital accounting comes with its share of challenges, early adoption can provide that buoy for companies in the SME and MSME sector to stay afloat in the competitive market. E-invoicing is the new fad in the market, the future of which looks promising due to the increasing growth in the technology sector.

(Rajesh Gupta is Co-founder & Director, Busy Accounting Software)

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Published on: Friday, August 20, 2021, 01:06 PM IST
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