What are the Features of a Good GST-Compliant Accounting Software?

Tired of generating manual invoices or calculating taxes manually? Facing challenges while filing GST returns? Worried that you might be filing wrong tax returns and the taxman might come knocking on your door!

Fortunately for you, a GST compliant accounting software will do all that work for you. It requires a one-time set up / configuration and after that invoice generation and accounting becomes a breeze. It allows you to focus on your business without having to worry about this mundane stuff.

One – Time Setup

It requires a one-time configuration:

  1. Apply relevant GST rates to income ledgers / expense ledgers
  2. Apply relevant GST rates to items based on their HSN codes
  3. Create customers and vendors with their GSTIN / Unregistered / Govt.

Automatic GST Application on entries

Once the masters are configured correctly, individual entries do not require that much attention – the moment you select a customer and items then the applicable GST amounts based on the GST rates for those items and the place of supply for the customer,shall automatically appear. Hence you do not have require a highly trained accountant to do these entries

Even while doing entries for vendors, if GST ledgers automatically appear, it acts as a cross reference to check if the vendor has raised the invoice accurately or not.

All good GST software offer options for Manual as well as Automatic GST configuration.

Make Tax Filing Seamless

Given that all the transactions are recorded on the software itself; it makes GST filing absolutely seamless. This filing could happen directly by connecting to the GST portal itself or the software could generate the excel that can be uploaded via the GST offline utility provided. The GST offline utility is the more popular choice amongst companies and Chartered Accountants.

Additionally, it is prudent to just check balances of sales vs. GST amounts once to ensure that there has been no erroneous entries at your end.

With a good GST compliant software, you can file returns in minutes without requiring any preparation of excel files and formats for uploads. So when you to file all your returns, the software does everything for you on time with no hassle.

Send GST compliant invoices to Customers

A lot of companies have their own unique invoice formats and most software do not cater to that customization. Hence this leads to companies preparing invoices in excel or word formats and re-entering that entry into the accounting software. This is very risky.

In case there is a change in the invoice and the user makes the change only in the word/excel but forgets to make that change in the accounting software then your GST return shall be erroneous.

Secondly, keeping the invoice module separate also leads to the risk of forgetting to input an invoice totally or repeating invoice numbers which would never happen if you were using a software.

Additionally, you also run the risk of charging wrong tax rates or wrong GST details since the entire process of creation of the invoice is manual.

Hence in such a situation you must select a software that can allow you to customize the invoice formats exactly as per your need with all the relevant fields captured. This will really help you maintain the sanctity of your data and keep your invoicing and reporting real-time. The software shall guide you whether the customer is registered or not, tax rates of income ledgers, items, HSN codes, etc. etc.

Matching of GSTR 2 data from the portal

This is another critical but under-developed feature in most GST compliant software.

When you receive an invoice from a vendor and make a payment to him, it is the vendor’s responsibility to deposit the tax component of the invoice with the GST authorities quoting your GSTIN. If this is not done, you may be denied credit for the same later on.

A good GST compliant software should allow you to download the GSTR-2A from the portal and automatically match the entries against the input entries that exist in the software. Doing it manually is an unnecessary waste of time and can lead to errors. Additionally, if volume of entries is high, then manual reconciliation is not really an option.

Advance Receipts, Credit/Debit Notes, RCM, Foreign Sales

Accounting for these is somewhat tricky and the user needs to have prior knowledge while accounting for them. Alternatively you choose a good accounting software that allows you to configure this so that accounting for it becomes easy and automatic.

There are a lot of GST accounting software for you to choose from depending upon the size of your business, prices, and features required by you to make taxation easier for you. Choose the one that suits you keeping the above features in mind as no matter how big or small your business is, having the convenience of a good accounting software goes a long way in ensuring peace of mind and allows you to focus on your core business.

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