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Challenges of ERP users in migrating to GST

Challenges of ERP users in migrating to GST

There are various issues to be sorted out in the migration process and the impact can prevail for a longer period especially for business and accounting people.

  1. Financial Year – GST system is implementing in between the financial year makes it difficult for Managements, Accountants and ERP providers. Some suggesting to split the financial year data and which will become very complicated as it needs to finalise two sets of partial financial accounts with opening and closing balances. Further it makes complicated the day to day activities of the regular accounts. Users have to look for the split financial statements to make decisions.
  2. Maintain the Existing VAT based system – As the accounting and tax information to keep for a longer period the existing tax data is very important. There will be further corrections or additions of VAT based transactions even after migrating to the GST. In that case either the users have to keep both software systems that is, the existing with VAT and the GST based one.
  3. Preparation to migration – Many aspects are not yet clear in front of business people as well as tax professionals. Obviously many of these aspects are to be fine tuned along with the migration process, yet the confusion over many such areas shall leads to errors which probably ended up in fine or punishment to the tax payers.
  4. Migration Process – The process itself is complicated. It will be quite easy for those small businesses that are keeping manual books and shifting to Software system on the fine morning. But the scenario is that all of the GST registered businesses are computerised and working with customised or readymade software systems. Both these cases have its type of difficulties.
  5. Volume Inventory – For dealers who keep the volume inventory is very difficult to shift into the new system. As the GST rates are not replacing with the existing VAT percentage slabs, it is a herculean task to assign the new GST rates for each inventory items.
  6. Incorporating GST Rules – There are many rules to be implemented in the ERP system and may further to be fine tuned. Automating the processes may take more time and involves much expense too.
  7. Training – Users of the ERP system to be trained well to make them capable in handling the process.