Category Archives: SMEs

What Union Budget 2017 has for SMEs?

What Union Budget 2017 has for SMEs?The Union Budget 2017 has got some good news for small and medium enterprises (SMEs)! As per the managing director, Federation of Kutch Industries Associations (FOKIA), increase in allocation for infrastructure spending will benefit many industries including MSMEs.

Following are the updates on union budget 2017:

Slashed income tax rates

For annual income between Rs. 2.5 lakh to Rs. 5 lakh, there is a reduction of Income tax rate to 5% from 10 %. If annual income is Rs. 3 lakh, then there will be zero liability. The surcharge of 15% remains same for those with income over Rs. 1crore. Whereas, those who are earning between Rs. 50 lakh to Rs. 1 crore, the surcharge is 10%.

Great news SMEs

The government has reduced the Corporate Income Tax on small and medium enterprises. There is a 5% reduction in income tax for companies with revenue up to Rs. 50crores.

Benefits due to demonetization

Demonetization has the potential to generate long-term benefits and one of the biggest benefit is that banks have started reducing the lending rates. It can help SMEs to get loans from banks, whenever there is a need for the same.


For the education sector the Government is planning to introduce market relevant training for youth. This will help in creating more jobs and youth can commence their own businesses.

Getting digital

There is a massive digital revolution going on in India. For example, launching BHIM (Bharat Interface for Money). This app allows you to send and receive money with just one tap. So, once it is successfully launched, one doesn’t have to stand in the bank queues for any financial transactions.

New FDI policy

As per the new FDI policy (which is still under consideration) where PSU firms will be listed under revised procedure. In addition to this, a new exchange traded fund that contains PSU stock will be launched in the year 2017 – 18. Also, to ease out foreign investment, the Government has announced the abolition of Foreign Investment Promotion Board (FIPB). It should help SMEs if they are looking for any foreign investment.


After going through the above-mentioned features, it is proved that the union budget 2017 – 18 has come as a huge breather for the Indian startups as well as the SMEs. But, as per some SMEs players the tax reduction is hardly any relief. Due to rigid norms, the businessmen are unable to avail the schemes that have been introduced by the government in the past. Therefore, it is important that the Government should take some necessary steps to make these norms more lenient for the betterment of SMEs.

SAP Business One for GST Enabled SMEs

SAP Business One for GST Enabled SMEsGood and Services Tax (GST) is revolutionizing the Indian tax system and is the biggest tax reform since independence. It will simplify the process of indirect taxation and will replace the complicated taxes such as State Value Added Tax (VAT), Central Excise, Service Tax, and other indirect taxes.

Do you run or plan to start a small or medium enterprise? GST has the following benefits for Small and Medium Enterprises (SMEs).

  • Commencing business has been simplified with uniform GST. Currently if a SME has operations across states, it has to register for VAT based on turnover slabs per state. GST will standardize the processes, such as VAT registration and make multi-state operations a smoother reality. Under GST, you can actually look forward to expanding your business footprint across states.
  • For those in the business-to-business model, expand your business across states. Your customers no longer need to limit themselves to a particular state for your products and services.
  • You do business across states? Say good-bye to time-consuming tax procedures! GST reduces logistics overheads related to border tax procedures.
  • Does your organization sell products as well as provide services? You don’t have to track and distinguish between the two for taxation purposes. GST looks at total revenue instead of distinguishing between the two.
  • Amongst all these changes, the biggest benefit to your organization is the fact that India is finally a unified market! You don’t have to worry about state specific procedures and taxation rules. You can focus on national level operations now!

Now that you have all these benefits, the next question in your mind will be – what tools do I have to operate my business in a GST regime? The answer is SAP Business One Cloud. Specifically designed to aid SMEs, it is a product by SAP, a market leader in enterprise applications and is a cloud-based ERP. It helps managing all critical business processes.

  • Since it is a Cloud based ERP it is a software-as-a-service model in which you can start small and scale up as your business grows without worrying about setting up infrastructure or related capital costs.
  • It will help in integrating and streamlining your business processes. This will aid decision making by providing a unified, real-time source of information.
  • Streamline your accounting and financial operations. These include daily accounting, banking as well as financial reporting and analysis.
  • Manage the entire sales process from one system.
  • Take advantage of the customer relationship management (CRM) tools to manage your customer relationship from initial contact to final sale and after-sales service and support.
  • Manage the purchase life-cycle including receipts, invoices, and returns.
  • Utilize the state of the art inventory management system that provides various costing methods. Get real-time insight into inbound and outbound shipments.
  • Generate reports based on needs that can assimilate information across your departments.


GST is a game changer for SME businesses. However, without the proper tools, you may not be able to take adequate advantage of this change. SAP’s Business One ERP solution gives you the right tool to take advantage. It gives you the cost effectiveness of a large enterprise, but, allows you to maintain the nimbleness of a SME.

Five Challenges of Business Intelligence for SMEs and How to Tackle Them

Five Challenges of Business Intelligence for SMEs and How to Tackle ThemThe popularity of Business Intelligence is increasing by the minute. The stories and case studies of its implementation and application are taking industries by the storm. However, it still remains something being utilized by large organizations only. There’s still a lot of resistance among SMEs to start using it, thanks to many challenges it can bring for them.

However, if implemented in the right way, challenges of BI can be tackled without too much problem. Here we’ll take a look at five major challenges SMEs face when implementing BI and how to tackle them. Let’s get started!

#1. Actionable Insights From Data Don’t Come Overnight

Implementing BI is one thing; making sense of it is another. It can provide you a lot of data, but making sense of that data to drive decisions requires serious investment of time and money. You can’t start making sense of its data overnight.

#2. The Necessity of Speedy Decisions

In today’s hypercompetitive business environments CEOs can’t afford to slow down at any time. The moment they slow down, their companies may be outdone by their competitors or some bigger multinational rivals. Therefore, they can’t afford to stay too dependent on IT teams for decision making.

#3. Lack of Focus

In order to be successful it’s essential to be focused. However, if not implemented very carefully, BI can make focus a rare commodity in supply. This has become even more easier after arrival of self-service BI. Sales teams, R&D teams, Finance teams – all can have their own data and their own insights into it.

#4. Quality of Ground Teams

The current trend of self-service BI is all about putting the power of data in hands of everyone who works in the company, including people working on the ground (i.e. factories, zonal offices, field etc.) to help them take decisions. However, the problem is that teams working on ground usually don’t tend to be intelligent enough to make sense of data provided by BI tools and data sources.

#5. Budget and Funds

Last, but certainly not the least, BI is a capital-intensive affair. Budgets of most SMEs can’t afford it, so it’s not a surprise that there remains a resistance among leadership teams towards implementing BI.

Final Thoughts and Solutions

If you can get past the last challenge in our list (that of funding), there’re some things you can do to tackle the remaining challenges as well. To be precise, they’re 3 things only:

  1. Data visualization can help a lot in tackling the 1st, 2nd and 4th Graphics can make numbers easy to understand, so SMEs should invest in graphics and visualization rich BI software only. If needed, they should also take help of consultants without wasting a lot of time to learn how to get the max out of their BI software. For example, companies with Tableau BI software can hire Tableau consultants to get as much advice as needed about the software.
  2. 3rd challenge, that of focus, can be tackled by controlling the sources of data. You should clearly outline the sources from where your employees can obtain data for their decisions.
  3. And lastly, the 4th challenge can also be tackled by providing some training to the teams working on ground. Training sessions coupled with visual-rich BI software can help a lot in making your ground teams smarter to understand BI data.

So, if you’ve the budget, you should go ahead and utilize the power of BI for your SME. Just keep these solutions in mind and you’ll be fine.

5 Point Cheat Sheet for GST: Prepare Your Business for Biggest Taxation Reform

5 Point Cheat Sheet for GSTFor businesses operating in India next 6 – 10 months are going to be very critical. After all, this country is going to create one major market in the world by implementing GST, which is being touted as the biggest Indirect Taxation reform till date. The move can significantly increase the convenience for businesses, but like any good change at the time of implementation it may cause major troubles as well. Therefore, businesses should start preparing for it as soon as possible.

Here we’re going to share a 5 point cheat sheet with you that can help you prepare your business for a smooth transition to GST. Let’s get started:

  1. Streamline Internal Processes: A reform as big as this one is bound to bring major IT and accounting related changes. Besides that you may also see changes in purchase habits of your customers. These changes should be anticipated in advance to avoid a rude shock. You should have a clear idea of which operations in your business are going to be affected, and how are they going to be affected. Only then you can start your GST preparation in the right direction.
  2. Train Your Staff: Since GST will be quite different and simplified from current indirect taxation regime, your accounting staff will initially need special training to understand its accounting practices. Depending on how much your staff members already know about it you may need two – three months to train and prepare them for this major change.
  3. Keep in Touch With Government: This is crucial for you if you’re a multinational corporation. By staying in touch with relevant government officials (i.e. those of Finance Ministry) you may get an early clue about the rollout and also about the rates that’re about to be announced with implementation.
  4. Study best Practices: There’re countries where GST has already been rolled out either recently (i.e. Malaysia) or some time ago (i.e. France, Canada). You should study the best practices followed by large corporations in those countries to work smoothly with GST. If you’re a multinational then this should be easy for you.
  5. Prepare Your Suppliers/Customers: Besides yourself you should also encourage your suppliers, clients and customers to prepare for this major reform. By doing this you can ensure a smooth transition without any supply chain related issues.

If you follow these steps, your business won’t have any trouble in making transition to GST. Implement them today and start preparation for for an easier way of doing business.

Impact of GST on SMEs: Myths you need to clear right now

Impact of GST on SMEsAs rollout of GST is approaching, the nervousness of SMEs in India is increasing. This nervousness exists because it’s believed by SMEs that rollout of GST will hurt them and increase their tax burden. However, this perception is a myth, and in this article we’ll tell you why.

How Did This Perception Come into Being?

Before we explain why this perception is mythological, it’s important to understand how did it come into being. Currently Indian SMEs are exempted from Excise Duty. However, when Excise Duty is merged into GST, the exemption will come to an end. It’s this thinking that gave rise to this perception.

Why Is This A Myth?

First of all let’s take a look at some facts:

  • The exemptions apply to SMEs in manufacturing sector only. SMEs in service sector don’t enjoy any exemptions at all;
  • Even among SME manufacturers the exemption of Excise Duty is not provided on entire annual turnover. The inputs procured by SMEs are taxed and excise exemption is provided on value addition only;
  • No other exemptions are provided to SME manufactures too – they’re subject to CST, VAT, Entry tax and basically every other tax that they need to pay;
  • The combined tax incidence of these taxes is somewhere between 27% – 31%.

Now let’s do some math.

Let’s assume that annual turnover of an SME is 1 crore. According to current Small-Scale Industry (SSI) exemption value addition on part of this SME will be exempt from Excise Duty. Assuming that the value addition is 30% (and it’s a very healthy assumption), it comes down to Rs. 30 lakh. This amount will be exempt from Excise Duty of 12.5%. Upon calculation, this comes down to exemption of 375,000 INR. This is 3.75% of total annual turnover.

The remaining taxes apply as they would’ve been, which based on a 27% tax incidence comes down to Rs. 27 lakh.

However, post-GST they’ll have to pay only one tax at the rate of 20%. This is 7% lower than the current tax incidence, which means that they’ll have to pay only Rs. 20 lakh in taxes.

This is a gain of 7 lakh INR against a loss of 375,000 INR. In simple words, it’s a gain of Rs. 375,000 on annual turnover of 1 crore. Is it bad by any means?


As you can see from the example given above, the perception that GST will hurt SMEs is just a myth. You should not take it seriously because GST will not only save money to your business but also save a lot of time and resources that currently go in navigating through the maze of taxes.

How SMEs are Monetizing Their Data With BI Tools

How SMEs are Monetizing Their Data With BI ToolsThe influence of Business Intelligence in Small-Medium Enterprises (SMEs) is increasing continuously, thanks to the large number of ways in which it’s helping them increase their revenue. It has made data more important than ever, and now companies are finding new ways of making money from their data, all because of BI. Here we’re going to take a look at four ways in which SMEs are monetizing their data with BI.

#1. Reporting Transactional Data

SMEs are utilizing BI enabled Business Reporting Software to report transactional data. And this is a very important trend, because according to experts it can eventually lead to analysis of that data, and later prediction of transactions that take place in SMEs.

#2. Churn Analysis

The importance of customer retention is already well-known in business world. One can’t make a profitable business by continuously losing old customers and acquiring new, which is the reason behind all the talk about controlling customer churn. Now it’s a good news that BI has started to make a difference for SMEs in this area as well. Techniques like advanced churn modelling to understand why customers leave are being utilized by SMEs as well, which is helping them retain their customers.

#3. Profiling Customers

For success of any marketing campaign it’s important to know the market. That’s why marketers profile their customers by creating “personas.” And the good thing is that BI is helping SMEs a lot in customer profiling too. Since customer profiling requires constant and concise data mining, BI is the perfect tool to satisfy this requirement. By constantly mining enterprise data it reveals many patterns about the customers of SMEs, which serve as nuggets for those companies while creating customer personas.

#4. Targeted Cross-Selling and Up-Selling

Cross-selling/Up-selling makes for a large revenue stream in most SMEs. However, in order to get the maximum revenue out of these streams one must know which channels are the best, which customer profiles to target and when to target them. Fortunately, BI is again available to help. By analysing transaction data for some time it learns about purchasing habits of customers and then helps marketers strategize their campaigns according to those habits.


BI has opened new doors of possibilities for SMEs by presenting numerous ways of utilizing their data. As a result, its popularity will continue to increase among SMEs, which will in turn lead to BI becoming more intelligent and useful with time. Therefore, you too should give it a try for your SME.

3 Reasons to Avoid Stockouts for SMBs

3 Reasons to Avoid Stockouts for SMBsThere is a general concept that we have learned in economics – “The supply increases if the demand increases and vice-versa”. But, if the supply (or inventory) is insufficient to fulfill your customers’ needs, it can directly affect the profitability of your business. How? Lack of availability of products leads to breach of customers’ patience and trust, which might force them to go to your competitors. Keeping inventory too low can result in lost sales also known as a stockout. Therefore, it is very important for you to minimize the impact related to stockouts and keep your customers happy and run your business efficiently. There are Enterprise Resource Planning (ERP) systems that can help your company reduce these costs to a minimum.

Loss in revenue

Revenue can quickly dwindle when there are frequent stockouts. Once customers perceive unavailability, they will look for other options. If your product has competitor products, then it will make it difficult to win back users. Therefore, it is important to keep the minimum quantity of the product, which you can take care with the help of a good ERP.

Increase in Internal Costs

To avoid inventory stockouts, businesses cannot go to the other extreme and incur increased internal costs. In this situation, you might place orders exceeding the demand. This leads to hidden costs, such as storage space and inventory services. To handle these situations and remain competitive in the market, it is necessary to determine adequate stock amounts.

Loss in productivity

Handling all the processes manually is time-consuming, tedious, and expensive tasks. For example, due to inventory stockouts, managers are focusing on repairing the situation instead of investing their time planning strategies for the betterment of the business. With planned strategies and good ERP system in line, certain tasks can be automated, which can lead to better utilization of time in other parts of the business.


There are some more hidden costs, such as loss in customers, loss of market competitiveness, and loss in time. This proves that stockouts are expensive and difficult to manage. Therefore, it is necessary to have an ERP system that can mitigate all these costs related to stockouts. This system can provide your business a real-time access to accurate information.

Top reports SMEs should keep handy to fuel growth

Top reports SMEs should keep handy to fuel growthSmall businesses are self-driven businesses, where owners have a lot on their plate because they are responsible for everything starting from the commencement of the business, marketing, sales, budget planning, handling payroll, and other administrative operations.  In today’s competitive world, data-driven businesses are dominating the market and SMEs are using latest technology to run their businesses more smoothly and efficiently. The latest technology, such as cloud-computing, mobile apps, Business Intelligence (BI), and SAP help SMEs to transform their businesses more effectively.

Following ways can help SMEs to rejuvenate their businesses to a successful path.

Competitors’ Performance

There are many tools in the market facilitating study of the performance of your business against your competitors. For example, depending on the nature of your business you can get a comparison report indicating number of outlets, product quantity sold, revenues, etc. These reports help in analyzing trends of performance vis-à-vis competitors. It helps compare your strategy outcome with competitor strategy outcome. Using Business Intelligence (BI) philosophy, SMEs can analyze their strategies to create new strategic business opportunities. The best example of BI software can be Tableau software.

Sales Performance

Using latest technology (like cloud computing), generating reports have become handy. SMEs can generate weekly, quarterly, half-yearly, or even yearly reports to track the sales. A sales report is not just about how many sales were realized, but also about how many customers came and at various stages of the process left before closing a sale. These reports will help bring this information to light and give scope to SME’s where they can further increase their sales by improving the sales closure rate. Cloud computing and mobile application technology can help SMEs to accelerate research and add value to new as well as existing products.

Supply and Demand Trend

SMEs can generate supply and demand reports and take decisions accordingly to focus on how to increase your sales. They should keep the track of demand for their products and keep adequate units ready for supply. This helps reducing overhead cost of warehousing, etc. SMEs can use analytics tools to unify all data from multiple sources into single repository, create interactive dashboards and reports, and visualize the solutions for further improvements in the business.

Buying Trends

SMEs can study their buyer’s behavior and values via market and consumer trends. For example, observing buying trend can indicate which products are high in demand, which product have been bought with some other product, etc. These types of strategies can help SMEs to pitch their product in the market accordingly.

Guide Employees for Better Performance

SMEs can generate effort to outcome reports to help employees how to be effective and productive in the organization.

Marketing Campaign Efficiency

Marketing campaigns can be expensive, and it is important to know what steps to be taken to increase sales. SMEs can view metrics pre-and post-marketing campaign. Especially take advantage of campaign response and reach reports when campaigning on social media.

Manage Supply Chain

Generate reports to check the patterns of customers’ preference, and the overall logistics of the business is also very important for the SME.

Dynamic Pricing Trend

Review past pricing trends for your products and combine with analytics to receive recommendations.

Inventory reports

Having inventory reports is always critical when taking decisions in relation to campaigns or pricing, etc. Inventory trends can also help analyzing replenishment needs from suppliers to the SMEs.


There can be other kinds of reports that can help SMEs to grow their businesses. Investment in latest technologies, such as cloud computing, BI, analytics tools, etc. will help them to boost their businesses. These latest technologies help the SMEs (who do not have the capability of supporting large IT teams) to get enterprise-class technology solutions and lower the other costs.

GST Reform- How SMEs can use this opportunity for better businesses

GST Reform- How SMEs can use this opportunity for better businessesRestructuring Goods and Service Tax (GST) in India is the biggest change that will bring all the unorganized sectors under a uniform tax base as well as improve growth opportunities for the organized sector.

The Small and Medium Enterprises (SMEs) sector is typically the main segment that gets affected and requires attention and handholding to survive and succeed through change as large as the one GST promises to be. As compared to large organizations, SMEs may not have strong enough in-house financial and taxation expertise. Moving to a completely new taxation system while beneficial in the long run may proof to be daunting for them. For SMEs who have a certain minimum scale of business using SAP tools targeted at SMEs for GST rollout may make the transition smooth.

How SMEs can benefit from GST?

GST is expected to benefit all businesses in India and SMEs can celebrate for the following reasons:

Ease of commencement of business

A new business needs to go through lot of formalities, such as VAT registration from sales tax department. There are different procedures and fees in different states. GST will bring uniformity in process and centralized registration that will make starting business and expanding in different States much simpler.

Simple taxation

The current system consumes lot of time and energy to manage different types of taxes at different stages. Adhering to diverse regulations at different states make it more complex. Post GST the complexity, efforts, and costs will come down for the SMEs.

Relief for business both in sales and services

The best example will be restaurants, which fall under sales as well service taxation and where VAT and service tax both items are calculated separately. The calculations process becomes very complex. GST will not differentiate between sales and services, and thus the tax calculation will be done on total, which will be a big relief for everyone including SMEs.

Reduced logistics cost

Toll tax, small border tax, check posts are the key reasons, which might affect the delivery of goods on time. GST can eliminate all these hindrances and will make interstate movement cheap. It also means that SMEs can plan to setup warehouses based on lower cost, better connectivity and not worry about how many levels of tax need to be paid. It may lead to consolidation of warehouses.


SMEs can use this opportunity to reduce costs, increase revenues. There is a transitioning phase, but ERP software from SAP and many other providers can help SMEs to overcome the transition phase smoothly.