As per the universal rule of the double entry system of bookkeeping, each debit should have an equal and corresponding credit. FA software ensures this while eliminating calculation mistakes and reduces the probability of human error as opposed to the manual accounting system. Moreover, FA software reduces paperwork even further, as reminder letters, invoices, statements of accounts and other documents can be e-mailed, thus saving time and postage. Popular FA software has forsaken the outdated MS DOS environment for a complete Windows- based accounting system.
FA Software For SMBs
FA software is more comprehensive and differs from software that can be used only for specific purposes such as taxation or payroll. Accounting software needs vary, from those of individuals to those of large, corporate enterprises. We talk here about FA software intended for small and medium businesses (SMBs).
Make Way For VAT
It’s an eventful time for SMBs, with the financial year-end looming, coupled with the implementation of the long overdue Value Added Tax (VAT) from April 1, 2005. A form of sales tax paid on products and services at each stage of distribution, based on the value added at that stage, VAT will figure in the ultimate cost to the consumer. An indirect tax, the VAT regime aims to increase tax compliance and will spare no one. What implications will the introduction of VAT have on accounting procedures?
Prakash Surte, a lawyer and a tax consultant, offers, “As with the enactment of any taxation act, VAT may lead to a disgruntled general public. Nevertheless, it is a good move as all the earlier sales tax acts will be repealed and VAT will take their place. Originally meant to be a uniform rate, the VAT will vary as per commodity and state. Remember, VAT falls under the purview of the State and not that of the Central Government. Once VAT is implemented, the maintenance of accounts will change to an extent, since the sales tax-related provisions and incidence of taxation will have to be calculated differently.”
The majority of the FA software in the Indian market is home-grown. Tally, EQA, Accounts 21, Wings Accounting and S’Tax are popular packages. Digit spoke to vendors of FA software and to end users to get a snapshot of what’s in and what’s not for SMBs.
EQA
Expert Quick Accounting, or EQA (www.compubrain.net), is equipped to handle manufacturing, trading, excise, point of sales, sales tax and warehouse management, and VAT, too. EQA was made VAT-compliant last year, taking into account the reports, returns and forms that would have to be filed state-wise. Vikas Chitlangia, MD, Compubrain India Limited, developers and marketers of EQA, says, “EQA is customisable. The user can tweak it and set the ‘master’ as per his requirements. The proprietary database is in .eqa form and is compatible with other software. The ‘report designer’ feature enables preparation of invoice and delivery challans, reminder services, monthly, quarterly and annual reports. If changes occur in the format of the returns, we provide free upgrades to existing users for one year.”
In case changes occur in the format of the returns, we provide free upgrading to existing users for one years
Vikas Chitlangla, MD, Compubrain India Limited (for EQA)
According to Akshay Kurwa, Partner, Kurwa Rubber and Valves, Mumbai, “The rigidity that is otherwise observed in other FA packages is absent in EQA, which is very easy to operate. However, some features that I needed are yet to be incorporated. Since, we receive good after-sales support and regular upgrades, I am sure this issue will also be resolved.” However, Manish Purohit, operations manger, Creadent Solutions, Rajasthan, has not been so fortunate. “Although EQA is a useful product and is packed with features, after-sales service needs to be improved. I am still waiting for the features the vendor promised.”
Tally
Tally (www.tallysolutions.com) is hugely popular due to its speed, simplicity, power and flexibility. Incidentally, Tally was the first FA software to introduce the no-codes concept i.e., it accepts alphanumeric characters for accounts and inventory masters. Satish T, advisor, Tally Solutions, says, “The Tally Audit feature allows the finance manager to check the time, date and accuracy of entries. This way, malpractices can be detected and errors rectified. Tally is VAT-compliant. It is running successfully in Europe, the middle east and south-east Asia, where VAT is the norm. Implementing the same in India is not an issue.”
Tally is popular for its speed, simplicity and flexibility
Various add-on features and upgrades can be downloaded from the Tally Web site. For the financial year 2005-06, Tally plans to upload VAT, e-TDS, TCS, service tax, payroll, mobile device support, multi-lingual software, portfolio management and e-banking.
Tally ees 6.3 enables exchange of information with non-Tally systems using XML, the industry standard for data interchange. It enables the user to share data across locations-with extended enterprises (“ees” stands for Extended Enterprise System) including customers, bankers, business partners and other associates. The protocol support for Tally is customised to business-specific needs and integration with SAP, Oracle and other external software is possible.
Vinod Nair, Navi Mumbai based chartered accountant has been using Tally for the last six years. “I experimented with other FA software before I settled for Tally. Tally supports good browsing speeds. The hundreds of reports that are generated daily can be easily exported to MS Excel. Unlike other custom-made accounting software that could be easily tampered with, Tally has rigid security control. Of course, for human errors such as mistakes made by accountants, only the audit trail can reveal discrepancies.”
It helps account for VAT payable, input credit and accounting. It generates all information to help prepare and file returns for VAT. Existing users can easily upgrade to Wings Accounting that is VAT inclusive. Wings Accounting will generate VAT returns directly once the formats are finalised. Wings has special features for NGOs and the apparel and footwear industries. Multi-layered security, report writer, forms and invoice designer, multi-locational accounting, confidential accounting etc. come with Wings Accounting.
Unlike other custom-made accounting software that could be easily tampered with, Tally has rigid security control
Vinod Nair, Chartered Accountant, Navi Mumbai
Sutinder Singh, director, PCH Marketing, Hyderabad, says, “We have been using Wings Accounting for the last 20 years, starting with the DOS version. Reports can be printed in any format. Wings is web-enabled and can handle large quantities of data. When the Windows version of Wings was introduced, we were apprehensive and switched to Tally for six months. We had to revert to Wings, which is an excellent FA package for SMBs.”
Account21
Anyone familiar with the basic accounting system can work comfortably with Account21 (www.topsyssolutions.com), a Windows-based application. Balagopal Karat of Topsys Solutions, developers and marketers for Account21, says, “It handles billing and inventory control and users can define the format. Certain reports can be e-mailed directly. Account21 has an open interface and data can be imported or exported to and from Excel and CSV.” Users can purchase Account21 versions as per the functions of each product-invoicing coupled with multi-currency and/or inventory (for trading /manufacturing).
Vidhya Dhandapani, Accountant, Kropex India Ltd, Bangalore, says, “Account21 is user-friendly with diversification for inventory control. For instance, we deal in 6,000-odd items subject to different rates of taxation. This results in numerous calculations that are now easy to handle thanks to Account 21. It is also VAT-ready, we will just enable that feature once VAT is implemented.”
S’Tax
S’Tax (www.sinewave.co.in) is an accounting software used for filing Central Sales Tax (CST) and Maharashtra Sales Tax (MST) monthly, quarterly or annually, depending on the assessee. Priced at Rs 10,000, it includes the various forms required for sales tax payment and offers a standard facility to import data from other software. S’Tax is a product of Sinewave Computer Services Pvt Ltd. Anil Moolani, Director, Sinewave, says, “In a month’s time, S’Tax will be equipped with the facility to calculate VAT. Present users of S’Tax can get upgrades that contain VAT modifications, either online or through the CDs we dispatch.”
K K Gada, a CA in Mumbai, has been using S’Tax for the last five years. Gada states, “S’Tax efficiently calculates sales tax liability, files returns in the prescribed format, prints challans for tax payment, and so on. S’Tax has made client management easier. Once the modalities of VAT become clear, we will just have to incorporate VAT in some aspects of the accounting procedures (where the amount is to be set off). Other basic accounting principles would remain unaffected. We keep receiving upgrades from Sinewave for S’Tax, Tax Base and even Service Tax. We will simply have to get the upgrade for VAT.”
The Last Word
Download a fully-functional demo version of the FA software from the vendor’s Web site, or get it totally free on request. This allows you to test the functionality before buying. Steer clear of pirated versions that may contain viruses or have inadequate documentation. Also, users of pirated software are ineligible for technical support and upgrades. While upgrades are not an issue, after-sales service could be a sore point in some cases. However, registered users can obtain online technical help from the call centre of the vendor. The verdict: SMB users of FA software seem to be a contented lot, albeit after some experimentation.