Most of the companies have some form or the Employee Resource Planning (ERP) packages running with them. All these systems which deal with the utilisation of materials, services and resources have to be upgraded to meet the GST requirements in the next financial year. The demonetization exercise which came into effect on the 8th of Nov, 2016 is also laying the emphasis on cashless payments. This will lead to an increase in the online financial transactions, digital invoices and payment systems. The GST along with the cashless economy presents a golden opportunity for the software and accounting technology firms dealing in the ERP systems.
GST likely in next FY: The GST rollout is likely to be delayed due to the current impasse in the winter session of the Parliament. However due to the constitutional compulsion it has to be rolled out by Sep 2017 as the existing taxes will cease to exist then. The discontinuation would mean that neither the Centre nor the States would be able to collect the indirect taxes from the people. The situation will propel the government to get the GST rolled out in time, and for this, they will once again have to take the opposition and state governments in their tide.
Supply chain integration: The GST rollout will not only require the companies to be tax compliant but also look critically towards their supply chains. At present, the supply chains have been enforced to save on interstate taxations. Along with it, comes the increase in the digital invoices as more and more business will shift to the online transactions, billing and payments. The complete ecosystem is likely to be affected. The large companies with established ERP systems will have to get their supply chain vendors integrated into the modern financial system in order to have a smooth business flow.
Error proof systems: The GST and the cashless ecosystem will require that the financial/ERP integration is fool proof. There cannot be any margin for error. The participating businesses will have to ensure that they do it by use of technology and automation. Already, the firms offering the ERP systems have upgraded their software to be GST ready. The online businesses that run financial platforms like mobile wallets etc. would need the business analytics, databases, and real-time assessment in the new ecosystem. The leading ERP providers have the software ready to deal with this requirement as well.
Advantages: The benefits of an upgrade to the latest technology will ensure that not only the firms get GST compliant but also monitor their business performance on real time basis. It would be possible to analyse large volumes of data to identify the business risks and take appropriate decisions in the boardrooms. The ERP firms are also trying to make their software solutions compatible with the cloud service providers to give a greater choice to the customers.
Once again the corporates, government and the businessmen are getting more time to integrate well with technology and automation. This may be necessary to absorb the dual impact of the GST and cashless ecosystem in the wake of demonetization.