Since the announcement of GST, there is a constant tussle going on between GST pros and others on its effects on the economic growth of the country. While the contention can go on, one thing that is truly revolutionary in the entire gig is the introduction of Input Tax Credit (ITC). The ability to claim ITC on your purchases, has made the reconciliation of your purchase data with your suppliers’ data extremely crucial. Though, the process is a carry forward of VAT and excise days, the stringent monitoring of ITC claim in GST regime calls for flawless reconciliation.
So, what is reconciliation? For beginners, reconciliation is a process to match the data reported by all your suppliers of your procurements during a given period with your purchase data for that period. Your vendors upload their outward supplies through GSTR1 on GST system. The system aggregates all your inward supplies from the GSTR1 of all your suppliers and auto-populate it for you as GSTR2A. While the idea was to have the reconciled inward supplies data filed through GSTR2 within 5 days’ time, same was revoked in the initial days itself.
Since then, you as taxpayer need to reconcile the 2A with your purchase data before submitting your GSTR3B to claim ITC. GSTR3B is a consolidated report on your inward and outward supplies and the ITC calculations.
Sounds Simple, isn’t it! Not when you have hundreds of vendors with thousands of invoices being generated per month!
Why regular GST Reconciliation is critical?
The reconciliation process in itself is a time-consuming and tiring process. It involves:
But, as they say it’s easier said than done. In real world, it would require the taxpayer to manually locate the mismatching invoice in tonnes of data for various GSTINs separately. Furthermore, the taxpayer would have to trace the errors through a colossal list of invoices (which can be as minute as faulty date entered) and aggregate the data vendor-wise. Then recurring communications needs to happen between multiple vendors to sort out the differences making it backbreaking chore, nonetheless still being time consuming and liable to further manual mishaps.
Fret not! With IRIS Sapphire’s New and Advanced reconciliation, the process becomes easy, quick and out of the ordinary. IRIS Sapphire frees you from the burden of manually matching your data with suppliers’ data, as you can bulk upload all your invoices across GSTINs and the smart reconciliation module automatically matches your purchase data with GSTR 2A from the portal to give you well-bucketed mismatch results. Review the mismatches and update directly to GSTN. You can even connect with your vendors from the portal itself and ask for rectifications. In addition to this, you can further go for user-triggered Advanced Reconciliation, which runs deeper algorithms to find matches across Financial Years, use fuzzy logic to contravene certain characters from the invoice no. match criteria and also compare invoices based on values.
IRIS Sapphire Reconciliation has been built considering the requirements of various industries such as manufacturing, pharmaceuticals, automobiles etc. and has market tested logics to reconcile the buyer-supplier data across various parameters to reduce manual intervention. To schedule a demo, visit GST Reconciliation or write to email@example.com.