GST Audit has become essential with every passing day.
This is especially true for businesses with multiple GST registrations. It becomes challenging for such businesses to keep track of all the GST activities in their various depots or sub-units with individual GST registration.
Hence, it becomes necessary for such businesses to have a centralized mechanism to check all the GST transactions in a single place.
In this short article, we will submit some facts about the GST audit tool and how it is different from your existing ERP system.
GST Audit Checklist – The new way of scrutiny with GST Audit tool
The government has enabled businesses to self-assess their GST returns and self-certify them before filing.
This can seem easy for an individual with a lower annual turnover, but is it a feasible choice for a business with a large turnover and multiple GST registrations?
Most probably NOT!
It can be a very tedious task for the company's senior management to keep track of all the sub-units return filing pattern.
Due to this lack of a centralized tracking system, following are the problems that businesses may face:
So, do the businesses have any way to address all these issues using a business diagnostic tool?
The answer is YES!
What is the best way to do all of this in a single click?
A GST Audit Tool functions as a Business diagnostic Tool that will help decision-makers scrutinize the business's financial health and show red flags to the discrepancies spotted in the GST return filing.
Automating this process is the only option left with the businesses to ease this humongous process.
Now, the GST Audit tool comes into the picture that will help businesses to generate a consolidated report of ALL their GST REGISTERED units.
GST Audit Checklist that the Auditing tool like GSTHero ThirdEye shall address is as follows:
Businesses should note that your existing ERP tool is not designed to perform all these scrutiny tasks.
Hence, a dedicated GST audit tool is essential for businesses to address all these issues.
That is why; businesses must be equipped with GST Audit software that will save their revenue and protect the company from GST audit by department.
GST Audit Tool – Much more than your ERP & GST compliance
When we talk to our existing clients regarding their GST Audit routine, the most frequent response we get is that,
‘Their ERP has all the compliance checkpoints, then why is an internal GST audit so necessary?’
This approach of businesses is not completely appropriate.
ERPs do have some compliance checks in place, but they are not explicitly designed to identify all the potential risks that may arise in future.
Hence, an audit under GST with a GST audit tool like GSTHero ThirdEye will help you identify the GST entries that are suspected to be incorrect or ambiguous.
Such entries may create trouble in the future.
For example: If any business unit claims any ineligible ITC and if the business does not notice this, then this can be a strong reason for inviting GST audit by department.
Following are some of the direct actions that a GST auditing tool will facilitate:
Note: Even if the businesses use their ERP for a manual reconciliation to spot their ineligible ITC, is it a feasible activity to undertake for all the company branches?
It will not only consume time & indulge more labour resources but will also NOT BE as accurate as the GST auditing tool.
Does your ERP show you red flags and potential exposures to such threats?
Input Tax Credit is one of the most beautiful features of the GST structure in India.
But there are many instances with large businesses where businesses do not have a complete idea about the GST Input Tax Credit accumulated by the multiple units of the business.
This makes the business pay its outward GST liabilities in cash. Thus, the accumulated ITC is left idle, and the business's working capital as a whole is impacted.
Hence, it is highly advised that the businesses utilize the ITC accumulated in their multiple registrations to pay off their liabilities.
Is accumulated ITC for every branch identified on a single dashboard by your ERP?
One of the best advantages that a GST audit tool can provide businesses is the prediction of the future penalties based on your current outstanding liabilities and if these liabilities are kept unpaid.
An innovative GST audit tool uses 'Predictive Analysis’ based on your GST returns to analyze the pending GST liabilities and help you show the red flags and exposure to penalties that may occur in future.
This forces the business to clear all their dues and not worry about any exposure to penalties or interest.Fines and penalties have a very severe impact on the companies with multiple GST registrations and can disturb the working capital flow of the business
Does your ERP run a Predictive Analysis and warn you about the risk exposure to fines & penalties?
These are some of the features that a GST Audit tool can help businesses with.
In a nutshell…
Businesses should understand the difference between your ERP system and the GST Audit tool.
GST audit tool helps you identify the errors in your GST returns filed and also suggests corrective actions so that the businesses are in a position to mitigate these risks before they harm their business.
Large businesses with multiple GST registrations shall have a centralized tool to look at the GST compliance and perform an unbiased and root-level GST audit of every GST transaction.
To check out our super auditing tool GSTHero Third Eye, feel free to reach out to us using the following contact information:
Stay updated; stay ahead!
Until the next time…
Power to pinpoint every single GST risk exposure and potential loss in the future, right now