The adoption of technology is the key to the survival of MSMEs, and technology can be adopted in multiple areas.
MSMEs play a very vital role in the Indian economy, and they are the major contributors to GDP. The role of MSMEs cannot be ignored, and hand-holding is the need of the hour as they are MSME entrepreneurs who are not experts in all areas, but they have started the enterprise based on their passion and expertise in a particular area. To assist them, the MSME ministry has initiated the Enterprise Development Programs, where aspiring or existing entrepreneurs are trained on various aspects of business and operations. Technology is another area where MSMEs can take advantage of the same, streamline their processes, and have information on the move. The information available on the move helps them make business decisions more effectively and efficiently. Technology has become a necessity as part of the New Normal. Cloud-based solutions help MSMEs have access to the latest software with up-to-date features and not owe any of the infrastructure costs at frugal pricing.
Customer management is very key to the success of any organization. When we say customer management, it starts with the inquiry stage, follow-up, invoicing, post-delivery collection, and post-sale service. For tracking the above activities, the organisation needs customer relationship management (CRM). CRMs are of various types; one is that they can be installed on their premises and accessed by the employees of the organization. The second important piece of software that MSMEs should look beyond CRM is billing and accounting software. In the first section, we will discuss the important elements of CRM and how they can be used. In the second section, we will discuss the billing and accounting software. In the third section, we will discuss the various schemes and software offered to MSMEs by the government or departments.
Survival of MSMEs is always a challenge, especially in a pandemic, like in a situation where they are facing a lot of uncertainties. There is low demand and uncertainty in the availability of raw materials and labor due to reverse migration and a shortage of working capital. To tide over these crises, it is recommended that MSMEs adopt the SMART methodology.
The adoption of technology is the key to the survival of MSMEs, and technology can be adopted in multiple areas. Still, the organization has to take a judicial decision and, based on the necessity and need of the hour, adopt technology in the areas of customer relationship management, accounting/billing, and then if budget permits they should adopt to migration to a proper ERP and production planning.
Customer Relationship Management (CRM) – Software
Managing customers is one of the herculean tasks which the organization faces. Right from the customer contact details and follow up for the order and post-sale service. Imagine if the customer contact details are not tracked and captured centrally, meaning an individual salesperson handles it, and once he leaves the organization or is on leave for some reason or the other, the communication with the customer is lost.
The other challenge is lead capture; every lead till converted into an order; it cannot be lost or wasted. If a lead is lost, it means the revenue is impacted. Lead management is also key as it will help in determining the sales forecast and also planning production accordingly.
Structured data helps the organization monitor the sales team’s performance and track its targets. The only solution is the adoption of a CRM that can handle all these challenges being faced by entrepreneurs.
The following are the features that an entrepreneur should look at while selecting a CRM
- Contact Management
- Lead Management
- E-mail integration
- Workflows and Approvals
- Reports & Dashboards
- Sales Analytics
- Sales Teams Performance Management
- Call Centre integration
- Support Automation
- Few Custom Fields
- Mobile CRM
- Cloud-Based
The above are some of the bare minimal features that the application should have, and based on the need of the organization, the priority can be determined, and proper application can be purchased.
Billing/Accounting Software
The second challenge that every entrepreneur faces is billing and accounting issues. An accountant on a desktop-based application does the billing and invoicing. If the entrepreneur wants any information, he has to call the accountant and get the updates. Another challenge is that it is person-dependent, and if the accountant is absent for a day or two, then there is a shortage of updated information, and payments are badly impacted.
In the current period, it is a challenge as there is a shortage of staff or employees who prefer to work from home, or due to the restrictions, the accountant may not come to the office daily. This can also lead to delayed sharing of information with the CMA, CA, or tax practitioner for filing the returns, resulting in additional costs.
Decision-making is also delayed due to a lack of real-time information. This can sometimes hamper bargaining power with the vendors or collection follow-up with the customers. In either case, it impacts the costs and cash flows.
To address this, business accounting and core accounting should be separated, and this will ensure that the information relating to purchases, sales, inventory, and outstanding is available in real time and can be accessed from anywhere. This will make it process-dependent rather than person-driven. For this, the organization has to embrace cloud-based business accounting software. One point that should be considered before going for business accounting software is it should be easily integrated with Tally, as many of the CMAs, CAs, and accounting professionals use it. Integrating business accounting with core accounting helps avoid duplication of data entry and reconciliation challenges.
What should MSMES do to address the above challenges?
A true entrepreneur converts challenges or crises into opportunities and reaps benefits from them. Similarly, the MSMEs can address the challenges by adopting the Digital MSME scheme, or GSTN provides free accounting software.
Digital MSME Scheme
There are multiple schemes for MSMEs, and one such scheme is the Digital MSME” Scheme for the Promotion of Information and Communication Technology (ICT). The main objective of this scheme is the adoption of technology by MSMEs to run their business operations smoothly and take advantage of cloud-based technologies and applications.
Objectives of Digital MSME
- To encourage MSME’s adoption of Cloud computing in their business process and production
- To increase the top line and bottom line of MSMEs through the adoption of the cost-effective cloud platform.
- To minimize spending on hardware and rapid implementation, thereby saving cost and time.
- To help the MSME sector connect with technology centers for better support and updates from the government.
- To encourage MSMEs to adopt software related to ERP, compliance, e-marketing, procurement, etc.,
Funding
This activity will be funded by the Government of India, which will be up to Rs.1.0 lakh per cluster. The total budget provision for this activity is Rs.100 lakh for 100 clusters.
This activity will be supported by a GoI subsidy of up to 25% of the total expenditure claimed (subject to a maximum subsidy of Rs. 0.75 lakh per unit) by the MSME for the procurement of Hardware/software from any recognized vendor.
Whom should I contact?
To avail of the above benefits, MSMEs can contact the Nodal Agency.
PPDC, Agra, is nominated as the Implementing Agency (IA), or MSME-DIs, MSME Tool Room.
Accounting Software by GSTN
Regtech is picking up in India, and now all the taxpayers registered under GST and income tax have to file their returns online mandatorily. In the initial days of the rollout of GST, many traders and MSMEs raised a concern that as the return filing is at the transaction level and online, they do not have sufficient funds for the purchase of relevant software.
The government has taken a view on this and decided to assist the taxpayers who have a turnover of less than Rs 150 lacs by providing free accounting and GST-compliant software so that the small taxpayer’s financial burden is addressed and they will be GST-compliant.
The provision of free accounting software is assigned to the Goods and Service Tax Network, and they have shortlisted eight software vendors after a rigorous round of validation by GSTN and representatives from the Institute of Chartered Accountants of India.
In the new normal during COVID and post-COVID, customers look out for value addition, and CMAs can suggest any of the above accounting packages to the client as it will help them to access the data online and at the same time reduce the last-minute rush and data entry errors by the team members.
This accounting and billing software is given free to taxpayers who have a turnover of less than Rs 150 lacs till 31st March 2021.
Marketing Support/Assistance to MSMEs (Barcode)
Barcoding has a very significant impact on the success of an MSME, where they are dealing with goods. It helps in capturing product information communicating electronically at every stage of the Supply Chain and reporting the same correctly.
Bar Coding can have a significant impact on the success of any enterprise/company and organization. Timely and accurate capture of product information and its communication electronically across the Supply Chain ahead of physical product flow is critical to lowering inventory costs, accurate sales forecasting & dynamic production scheduling, and product track and trace. Bar Coding not only facilitates the exchange of information between buyers and sellers but also provides the potential for better visibility and sharing of information across an entire Supply Chain.
Bar codes are the series of black lines and white spaces printed on product packages or attached as tags, which you would have noticed on consumer products. Information on a product or a consignment like its item code or serial number, expiry date, consignor/consignee, etc., can be represented through such bar codes. When these bar codes are scanned using a scanner, it enables instantaneous data capture with 100? curacy and at great speeds.
Funding
Under the SSI-MDA scheme, financial assistance is provided towards 75% reimbursement of a one-time registration fee paid by MSEs, w.e.f. 1st January 2002. Considering the difficulty of MSEs to meet the liability of the payment of annual recurring fees, a 75% recurring yearly fee (for the first three years) is also reimbursed to MSEs under the NMCP scheme-Marketing Assistance/Support to MSMEs (Bar Code).
The Government is assisting the MSMEs to adopt technology to streamline their business operations and increase productivity. In the hour of uncertainty and in general, it is recommended to go for cloud-based applications as they will reduce the hardware cost and also the maintenance cost. Another advantage of a cloud-based solution is it is easy to implement, and customization is not possible, this will ensure that the organizations adapt to the standard business process and ensure to have better internal controls.
The above are the points to be considered by the organization before signing up for a cloud-based solution under the SAAS model (Software as a Service, and charges are based on the number of users using the software). Another point to consider is data retrieved at the end of the tenure of the contract.
In today’s world, especially with the new normal technology is playing a key role as it is reducing the time for decision making and enabling the organization to make decisions swiftly. Right from marketing to delivery of the goods, everything has to be tracked and monitored, especially with local lockdowns.
Disclaimer
Any views or opinions represented above are personal and belong solely to the author and do not represent those of people, institutions, or organizations that the author may or may not be associated with in a professional or personal capacity unless explicitly stated. Any views or opinions are not intended to malign any religion, ethnic group, club, organization, company, or individual.
