Continuing the focus to enhance the ease of doing business in India, the Finance Minister has announced various schemes to promote Start-ups. The budget is expected to enhance the disposable cash in the hands of the middle-class and thus accelerating the spending and growth. 

Below are 20 key highlights of 2020 Budget:

1)  Introduction of Single window clearance for start-ups through an online platform 

2)  Introduction of Digital platform for Intellectual Property Right (IPR) 

3)  Introduction of Seed Funding Programme for Start-ups

4)  Allocation of Rs. 8,000 crores to promote Quantum Technology related activities 

5)  Deferment of TDS/Income Tax on ESOP Exercise by 5 years subject to other terms 

6)  Tax Audit limit increased from Rs. 1 crore to Rs. 5 crores with conditions 

7)  Change in rules related to loss carryforwards in case of mergers 

8)  Income tax exemption to start-ups extended up to 3 years out of 10 years 

9)  Turnover limit for tax exemption for start-ups raised form Rs. 25 crores to Rs. 100 crore to include large start-ups as well

10)  Reduced Income Tax Rate of 15% to extend to Power companies as well 

11)  A single window clearance under National Logistic Policy for e-logistics players

12)  Creation of a Tax Payer Charter to stop harassment of taxpayers 

13)  To decriminalize some norm violations under Companies Act/ Income Tax Act 

14)  Introduction of subordinate debt for MSMEs

15)  Introduction of Faceless Appeals under Income Tax (earlier only Faceless scrutiny was applicable)

16)  Abolition of Dividend Distribution Tax

17)  Tax Exemption to investments by Sovereign funds into Infrastructure segment 

18)  Waiving interest and penalties on Income tax disputes if the amount is paid by March 31, 2020, June 2020

19)  Enhancing the footprint of the Warehousing facilities across the country including PPP model 

20)  Introduction of NIRVIK Insurance scheme to boost export

A survey conducted by IBM in collaboration with Oxford Economics showed that 90% of Indian startups fail within the first 5 years of their inception. The major reason for their failure is the absence of a long-term plan. Most founders of SMEs make the same mistake: Thinking of generating more revenue in a shorter time rather than looking at the bigger picture.

Founders juggle a lot of responsibilities which only increase in due course of time. They also need to keep an eye on the slowing economy which can topple any organization in just a few days.

Read: How ERP can save your company in recessions

Is ERP A Luxury?

Every founder wants to expand their company's growth as each day passes. They work 24/7 to take their company to new heights. Founders can?t make intelligent decisions when they are provided inaccurate data. One slight error in judgement could bring down any company like a house of cards. ERP ensures complete data access at any point in time by centralizing the data and integrating the different business departments of an organization. ERP is highly beneficial for every organization that plans on rapid expansion. It is difficult to stay ahead of the competition when you are still struggling with spreadsheets and they are using ERP.

 Despite these significant factors advocating for the adoption of ERP, there is a slight hesitation among founders to implement ERP due to these 4 reasons:

1.  ERP requires a lot of investment

Let us debunk this myth right away, ERP during its initial years was expensive and was considered as an option rather than a necessity. Due to its high cost, it was only implemented in bigger companies which had financial prowess. Fortunately, now there are umpteen ERP solutions which don?t cost much and are easily scalable.

2.  ERP implementation is a time-consuming process

This is the second most popular myth among SMEs. ERP implementation time is completely dependent on the type of ERP solution chosen by you. There are various customized cloud ERP solutions that can be implemented within just a few days in your organization.

3.  It's difficult to Customize

Software is pretty much useless when it costs an arm and leg to just customize it according to an organization?s requirement. Fortunately, TYASuite is a customized cloud-based ERP solution that is preloaded with innate features which meet most of the business requirements. They can also be customized according to your preferences. Many ERPs offer APIs that allows users to easily build custom apps and implementations.

4.  It Will Impact My Current Systems

The primary concern of founders while incorporating new technology is that it will impact their day to day operations, disrupt customer orders, service delivery and ongoing business activities. ERP vendors understand the dilemma; therefore, they create an optimal plan which minimizes risks and allows a smooth transition to a new ERP solution.

Cloud ERP: The Hakuna Matata solution!

Hakuna Matata is a popular phrase from the Swahili language which means no worries for the rest of your days. Cloud ERP is the embodiment of Hakuna Matata. It can be installed within a few weeks in any company and is a lot cheaper than its counterparts. Cloud ERP can be accessed from anywhere around the world and at any point in time. It doesn't require maintenance and continuous updates are provided by vendors and saves up a lot of time.

It is very difficult for a bird to spread its wings when it is in a cage. Similarly, it is difficult for a developing organization to spread its wings when the ERP doesn't offer scalability. Cloud ERP scales easily by adjusting the entire infrastructure to the necessary size for each stage in your development as a company.

 As cloud ERP is a subscription-based model you get customer support access 24/7 which is available to you even after implementation, unlike its counterparts where the support ends at implementation.

A lot of organizations are rapidly transitioning towards implementing cloud ERP in their organization. The platform streamlines your process and automates redundant and boring tasks.

A founder would have complete knowledge about the leftover budget from the previous financial year. Spending the remaining funds efficiently is a challenging task for many organizations. Usually, they invest it in ridiculous things that promise short term benefits rather than focusing on the big picture. Implementing the cloud ERP in your organization will help you recognize the shortcomings before it becomes a deal-breaker.

But is your organization ready for it?

Implementing ERP in your organization is a serious affair because there are umpteen issues that need to be handled before doing it. You need to make some changes if you plan on going ahead with it.

Let us discuss 3 must-know things required for a successful implementation of cloud ERP:

1.     Organize Your ERP Implementation Process

You would go through hundreds of reviews, check the number of downloads and many things just to install an app on your phone. Therefore, you need to do some groundwork before implementing cloud ERP in your organization. Understand the business requirements, research the potential vendors, and list out internal, as well as external resources required to successfully implement it in your organization.

The quintessential factor in ERP implementation is migrating your data from legacy/old systems to ERP. Data is the heart of every business, so the transfer of data must be a completely secure process. Once the data is accurately transferred, the next steps are a walk in the park.

An ideal cloud ERP software will help you and your employees to interact with data as you desire.

2.     Mapping and Analysis of The Process

As we said earlier, you need to have a precise idea about business requirements. Therefore, you need to map out various business processes involved, workflows involved, identify the common points across various business units and find the weak zones of your organization. This will help you to comprehend the solutions offered by the ERP solution to address the flaws. Likewise, you can also identify the primary factor for its implementation in your organization.

Everyone wishes to provide the best service for their customers by efficiently adhering to all their demands. Although wishful thinking can help you to get control over the way your company functions, the reality is far more different. The service you provide is only as good as the technology stack available in your organization. Don't let limitations of ERP software come in your way of providing the best service to your customers. Implement such software that can automate most of the tasks and help you gain an edge over the competitors.

Although we love customization, we are cursed with the extraordinary ability to abuse it. Being over-dependent on a wide range of customization offered by an ERP solution will end up being a headache for your development team. Moreover, it will further complicate things for them during the downtime of the ERP software. Therefore, it is necessary to identify how it can be incorporated into your organization without overusing the customization ability and adjust to your processes without much fuss.

3.     Change Management Strategy for ERP Implementation

According to Wikipedia, Change Management is a collective term for all approaches to prepare, support, and help individuals, teams, and organizations in making organizational change. The transition from old technology to new is difficult and it might take a toll on your employees, hence you need to support them in every way you can.

Change Management strategy will help you answer these questions for your employees and ensure them that the ERP implementation is necessary for the progress of the organization.

1. Can ERP incorporate your existing software?
2. Does it change the way of handling financial regulatory compliance?
3. Can you perform internal audits with ERP, if yes how to do it?
4. Can all the tasks be completely automated?
5. Does it take care of currency conversions, tax regulations and calculations or it needs a manual approach?

Conclusion

It is a good thing that you are thinking of switching from legacy or old systems to ERP software but the transition is not easy for all your employees. Before switching, you must ensure that it is a perfect fit for your organization’s needs and the employees and shareholders are on the board for this change. The best cloud ERP software is the one where all your organizational requirements are met and it does not put a dent in your wallet.

As a company starts earning big bucks, they hire more and more people in various departments such as sales, operations, customer care etc. However, most companies conveniently ignore their accounting department. The accounting is the lifeline of every company and it impacts all the departments. More often than not founders find themselves in a tough spot because of disregarding the accounting department. 

The accounting department is a crucial factor in deciding the success story. According to Indian business magnate Mukesh Ambani: Data is the new oil, more and more people are investing in data to enhance their business growth. Founders and investors will have problems while investing if their accounting and finance team is incapable of providing them with accurate data. The accounting department can’t be expected to provide high-quality data on time if they are understaffed. Inaccurate data will steer away big-ticket investors from investing in your company. Additionally, it can hamper the decision to launch an IPO. 

Imagine you invest in a company based on their financial data but re-evaluation of it by your accounting department reveals that there is an array of misrepresentation in it. You would immediately sue them, correct? The investors for your company might exhibit a similar behaviour or worse if there is an error in your data. Suing a company makes it a public record and jeopardizes the chance of potential future investments for the company. 

Business decisions should always be made after analyzing the financial data so that it gives you answers to questions such as: 

1. How much money (liquid cash) is available?
2. What is the cash burn rate?
3. Where is the burn rate more?
4. Source of cash flow, etc.

Some companies are forced to hire experienced professionals during a crisis to get the company back on its legs. That is a brilliant move but even an experienced professional can’t take real-time decisions if systems and processes are not in place and misrepresentation of data will make the matters even worse. It can only lead to digging a bigger hole which will devour your company. Experienced professionals must be supported by right and scalable technology to ensure that they become a helping hand in the desired growth of your company. 

Conclusion

There is an old proverb: Prevention is better than cure. Why should you wait until the situation becomes worse? The best thing to do is to hire more people in the accounting and finance department. The accounting team is very important for your company’s growth. Although increasing the headcount is a part of the solution, it is incomplete without integrating the proper technology for a hassle-free process. It is imperative to upgrade to Cloud ERP as the business grows and to clear the future growth path.

Many companies chose Cloud ERP to overcome recession rather than living in a delusional world where terms like recession cease to exist. Let us bring you back to reality, according to BBC, recession in India is right around the corner. Maybe it?s true, maybe it?s not (It is hard to trust news outlets these days) but it doesn?t hurt to be prepared for the doomsday rather than scratching your head for a solution when it happens.The Indian government is taking various measures to revive the slowing economy. It has announced the biggest ever income tax reduction for corporates in India and more reforms are on the way.

Similarly, accepting that recession is a possibility will help you to start searching for timely solutions. One of the best solutions to make your organization recession-proof is through the implementation of ERP software.

Why do companies crumble during a recession?

There are many reasons for companies to crumble during the recession but we will focus on 3 major reasons.

Failure to Plan

Planning plays a crucial part in the organization?s future and wasting time by being a couch potato or sitting around doing nothing will do more harm than good. The key is to have multiple plans which can pull you out when you are stuck in quicksand. Implementation of ERP software in your organization will help you gain insight and it will help you to plan in advance.

Failure to Adapt

Nokia, the organization which was synonymous with mobile phones during 2000-2010, lost most of its revenue and shares, later Microsoft acquired it. The primary reason for its debacle was the unwillingness to accept change and thus provided ammunition for newbies like Apple to obliterate the mobile titan, Nokia. Upgrading to newer technology is difficult but the only way to survive in the present era is by embracing the latest trends in the market. After a very late realization, Nokia is back with a bang by incorporating the latest technology in their devices.

Ignoring Weakness

There is a very popular idiom: A chain is only strong as its weakest link. It means that your organization is only as strong as its weakest performing member/process. Identifying that employee/process and taking steps to improve them will help your organization to grow strong. It is difficult to recognize the weakness in your organization. Fortunately, you can easily detect that through ERP software.

How can Cloud ERP help you?

During the recession, most companies had let go of their experienced employees and saved money. That acted as an interim solution which helped them to cut losses but strapping a band-aid on your body and expecting it to heal a fracture is preposterous. You can?t sacrifice talent to save money.

Companies can instead focus on enhancing profit by improving their processes and taking faster business decisions. Cloud ERP can be an aid to the management by providing real-time operating data like customer-level profitability, ageing of the receivables, slow-moving /fast-moving inventory analysis, product-level profitability and many more. 

Ever had a eureka moment while sleeping but didn't have the data to take critical business decisions? Cloud ERP gives you access to accurate information and reports 24/7. Thus, enabling you to think freely, act on time and increase your profitability by 

? Improving inventory to sales ratio

? Decreasing working capital requirements

? Reducing the loss from inventory obsolescence and many more. 

Cloud ERP software can help you stay profitable during the recession.

Although all these factors are beneficial to companies, entrepreneurs may feel that ERP implementation is time-consuming and is expensive. Check out TYASuite, a cloud-based ERP software which is affordable and can be implemented in any organization within days.

At Eleventh hour, we realise that it is impossible to close the audit and file the ITR. The finance, audit and tax teams start praying that the CBDT extends the deadline. The tension is more when you have a substantial amount of losses to carry forward. After few sleepless nights and countless rumours, the CBDT decides to extend the due date.  

We start celebrating and file the ITR in the next few days and completely forget about it. Year after year the same thing repeats and we start blaming the accounting and finance department and auditors for their failures. 

But are they the only ones to be blamed?

The life of professionals in the accounting and finance department is always filled with deadlines and even more deadlines. To make matters worse these departments are always understaffed. Getting the audit completed and filing the ITR is a mammoth task. The situation may be worse in start-ups and fast growing companies having complexities in their business. The job becomes more difficult when there are very few members in the team. The huge workload prompts them to postpone the ITR filing till the last date. Fortunately, our government has not left them out to dry and has extended the deadlines most of the times. 

Can this problem be easily solved by increasing the workforce?

Unfortunately, it is not that easy. Human beings have a natural tendency to get bored while performing redundant and boring tasks. A bored professional is a beacon for committing mistakes and that can be a disaster for any company. 

ERP software is your knight in shining armour which will rescue from all these situations. ERP puts a lots of control in the process, helps avoid mistakes and streamlines all your data in one place. 

Cloud ERP can be accessed from anywhere and at any point in time. The accessibility of data helps to create reports without losing much time. The accounting and finance departments will be more motivated to do their work efficiently. ERP will also help CFOs and controllers with automated reminders to complete compliance activities well in advance. 

Do justice with your team and switch to Cloud ERP!