Indian SMEs Don't Have to Get Taxed Over Changing GST Norms, Says This Global Startup
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Whether it is demonetization or the implementation of GST, Small and Medium Enterprises (SMEs) have been thrown into a whirlwind of changes in the way they run their businesses.
The change is discernible. The age-old practice of running to accountants on a quarterly basis to solve taxation crisis has given way to a more organized fashion of doing things. With computers at their disposal and Internet boom at its peak, small businessmen are now merely concerned about how to transfer documents online.
Digitization has made the technology shift evident, giving a boost to businesses that were earlier catering to SMEs, helping them in a smoother transition. Startup Intuit has in very little time created a strong foothold in the SME sector in India and all over the world.
In conversation with Ritu Marya, Editor-in-chief of Entrepreneur India, Alex Chriss, Senior VP and Chief Product Officer, Intuit spoke about how their product – Quickbooks — is constantly developing to suit India’s changing needs and why technology won’t disrupt SMEs but only make way for more.
Core Needs of SMEs are the Same Globally
Intuit’s offices are spread worldwide and it is important for them to tweak their businesses while catering to SMEs in different geographical locations, according to the region they are in.
However, Chriss believes there is one common factor in the core needs of businesses the world over – they all want to save time. “A business owner has to spend time and energy doing his books, it may vary with the location but none of them want to spend their time doing back office accounting. They all want more money. Cash flow is the life of any business,” stressed Chriss.
So, the platform’s core function is to solve the basic needs of businesses. The last 20 per cent varies with the market trends, taking into account government regulations, exact needs of that business, relationship with their accountants, etc.
Behind the Scenes – GST
The Goods and Services Tax (GST) has changed the way most businesses work and while it’s still taking time for many SMEs to get used to the work that goes behind the tax regime, Intuit for its product Quickbooks, started researching for GST a year before its implementation.
Their Bengaluru office that houses over 1,000 engineers, product developers and designers started the work on GST. They set up a team to look after the needs of businesses in India, ensuring that the product was GST compliant. “However, as soon as we launched, it changed again. So, we continue to improvise. We pride ourselves in being the compliance business so when you use our product, we ensure that you are doing it the right way. So, we spend a lot of time and energy in understanding what the government is looking for,” he added.
Automating the Business to Keep Up With the Changes
Since its implementation, GST has already witnessed many changes and to manually adhere to them is a difficult task not just for SMEs but also the folks at Intuit. And here comes in automation. Chriss said they were looking at automating as much as possible and were leveraging Machine Learning to be able to look at the inputs from customers across the world and get smarter with each transaction. “We are building a Machine Learning platform that’s learning the sales tax calculations such that it can adapt to the changes that the government is implementing, for they are going to continue to change. So, automation will take off work from small business players,” he said.
The changes aren’t just in India alone. Citing US’s example, Chriss spoke about how with over 11,000 different sales tax calculations, the tax structure there is more challenging than any other place in the world.
The company’s go-to market strategies differ with every country and when it comes to India, the focus is on the digital entrepreneur. “India is such a massive market and we don’t want a generic product, we are creating workflows that ensure the core customer needs are met,” said Chriss.
Financial Literacy for SMEs – A Part of the Plan
However, their work is not just limited to making businesses compliant. They want to ensure that every question in a business owner’s head regarding this is answered by them. With more and more governments moving towards ensuring that SMEs are adhering to tax regulations, the work on their plate is more.
Chriss believes there are two ways for them to go ahead with solving the tax crisis. “First, we remove the work from them (automate their business). The second essential part is to educate them. Right from wondering what questions to ask about their business to how to bring in profitability, we are creating a proactive product using things like conversational UI such that we do all the work in the background and give them the answers,” he said.
SMEs are Here to Stay
While many believe that with more and more tech startups easing out the way we work, SMEs are now an endangered species, Chriss believes we are far from that. Giving an example of how tech is enabling SME growth, he spoke about how in Uber too, every individual driver becomes a SME.
With massive platforms turning to solve the needs for SMEs, he believes that we are actually democratizing access to customers which will further spur the growth of SMEs. “It will be only medium size businesses that will be squeezed out. While there is a dramatic growth for SMEs on the cards, the hardest challenge for SMEs will be getting the next customer,” he said.
Partnerships too, play an important role in their growth. While corporate and tech partnerships are underway across the globe, they are also looking at working with the governments to not just help SMEs but also the governments. While in the US and UK, they are already working closely with the government, Nikhil Rungta, MD and Country Manager, Intuit India said with regards to the Indian government, it’s still early days. “With the implementation of GST, we are witnessing a certain level of softening up from the government’s side because GST is all cloud-based, so they are looking for partners in the same space. We have just started talking to them,” Rungta said.