Outsourcing Payroll

5 Reasons Why You Should Outsource Your Payroll Operation & Focus on Growing Your Business Instead

You really can’t afford to anger your employees. After all, they are the backbone of your entire organization. Without them, you really can’t accomplish anything.

Among other things, salaries are something that every employee looks at before taking up a job. In fact, the first week of a month is the happiest week for every employee as they wait for their phones to beep with a message saying, “An amount of XYZ has been deposited in your account.”

Such is the impatience for their salaries, you really can’t afford to annoy them by being irregular or inconsistent with paying them their rightful dues. As a company grows, this becomes increasingly difficult.

Why? Because something as simple as paying salaries comes with a lot of steps and calculations. So, the higher the number of employees, the more tedious the work, and higher the chances of errors.

That’s why it’s important to consider the advantages of outsourcing this critical function. This not only allows you to divert more resources towards core operations but you also drastically reduce the risk and cost of errors.

Let’s see how you and your organization can benefit from outsourcing payroll:

1.Expert Professionals :

You may employ people on a salary basis or on a contract basis. Both demand a different tax and accounting treatment. Add to that the nuisance of keeping track of who are employed in what capacity. 

A HR agency that deals with payroll operations day in and day out knows every minute detail of it. This puts them in a better position to guide you perfectly, account for various kinds of employees, deduct taxes accordingly and keep track of them. 

In short, they take up a lot of these burdens and ensure there are no costly errors whatsoever.

2.Legal Compliances :

Payroll is more than just paying salaries. Its computation involves taxes that are to be deducted according to prevailing government rules and regulations.

In-house payroll manager/ HR manager may not always have all the resources or tools to keep themselves updated with the current laws. And a negligence in following these laws can land your organization as well as your employee in trouble. You don’t want that.

HR agencies are experts with understanding the implications of these laws. They are always updated mainly because your organization isn’t the only client they handle. Therefore, they will always ensure you don’t get into any legal trouble related to payroll.

3.Losing In-House Experts :

Say you end up employing and training a really good accountant who manages your organization’s payroll like a charm. What is the guarantee that they won’t quit when a better job opportunity pops up?

This means you need to employ and train a total newbie. That involves additional cost, the possible delay in releasing payments (because either you or someone less experienced is handling it until you are able to employ someone else).

When you outsource payroll function, you are free from this headache. Whether they lose their employees or not, you can rest assured that your organization’s payroll function is always in capable and professional hands.

4.Data Security :

Imagine one person within your organization having access to all of the employees’ data. This data can be stolen, tampered with or even used for the wrong purposes. It can also lead to identity theft.

Additionally, your accountant may give unauthorized access to your employees. There’s no end to the havoc this can create.

That’s not all. All the data of your employees are stored in your organization's server. What if someone breaches the security and hacks the data? As an employer, it is your duty to maintain the confidentiality and privacy of each and every piece of information you collect from your employees.

By outsourcing payroll, you ensure your data is secure. Since this is what they are meant to do they are loaded with state-of-the-art technologies that ensure data protection as well as the ability to spot any payroll fraud immediately.

5.Time Savings :

Procession payroll takes time that can be instead utilized in core operational activities. Outsourcing payroll allows you to focus on more important tasks such as growing the business, bringing in more revenues and serving customers in the best manner possible.

6. Monetary Savings :

If you have an in-house payroll function, you not only have to pay one or more dedicated personnel but you need to invest in high-end technologies and software. All this plus the training costs for handling these tools.

Outsourcing allows you to access these technologies and software at a fraction of the cost without worrying about recruiting, training and paying multiple people.

Conclusion

Payroll can be a tedious process. The stress caused by having to recruit and train people over and over again, dealing with the risk of data security and updating yourself with the latest technologies and legal requirements can give you serious nightmares.

So, allow yourself peace of mind and a good night’s sleep by outsourcing payroll operations to an expert.

Investment Risks

5 Major Investment Risks You Need To Assess Before Investing Your Money

How many times have you heard people call investing or trading in the stock market, gambling? It’s madness when they tell you that bonds and fixed deposits are safer and has no risk.

Let me tell you something no financial asset, bonds, debts or shares, is 100% risk-free. They all carry some level of risk.

“But aren’t government bonds considered risk free?”

Yes, but that’s because the existing notion is that the government will pay it back one way or the other. For eg., by raising taxes, cutting public spending or even printing more money. However, that doesn’t mean the government can’t default. In fact, situations may occur when it may consider defaulting as a more preferable option as opposed to doing any of the above.

Another aspect to look at it is that, if you hold the government bonds till maturity then you may consider it safe. But if you sell it prematurely in the bond market, you may have to sell it at a lesser value thereby losing money.

That said, the chances of the government defaulting on bonds is extremely less. It’s by far the safest investments you can make. No wonder why everyone considers it safe.

So back to the main topic. Every financial asset you may hold carries some level of risk. Therefore, it’s highly essential that you understand what are the various kinds of risks. This will put you in a much better position to evaluate various investment decisions.

Let’s know more about these risks. First, we will talk about the two broad risks: unsystematic risk and systematic risk. 

Unsystematic Risk:

Every time someone asks you to invest in multiple stocks or across multiple securities like bonds and mutual funds, they are asking you to do it to avoid unsystematic risk.

 This is the sort of risk that’s inherent to a company or an industry. For eg., the airline industry is a highly regulated one. That means that a sudden change in regulation may hurt your investment. Let’s say the government decides to hike taxes on fuel or decides to increase fare restrictions for the airlines, all the airline stocks would fall heavily.

So if you have invested all your money on airline stocks, then this scenario would eat away most, if not all, of your investment.

On the contrary, if you had also invested in banking stocks and tech stocks, this scenario wouldn’t have hurt your portfolio as much because fuel costs and airline fares have no impact on banking and tech industry.

This is why diversification is so important in order to reduce unsystematic risk.

Other kinds of unsystematic risk are new competitors, technology advancements, change in management, product recalls etc.

Systematic Risk :

Remember that by diversifying you can reduce unsystematic risk? Well, you can’t reduce systematic risk by doing that.  Why? Because this sort of risk affects the entire market and the economy, and not only certain industries and companies. Let’s say you have a well-diversified portfolio of stocks of multiple industries. But what if the economy is hit by a recession? It would impact the entire economy. 

The only way to reduce this risk is to invest across multiple asset class such as fixed income groups (FD, bonds etc.). For eg., RBI decides to increase the interest rates. This will hit various industries because of the increase in production and operational costs. So no matter how diversified your portfolio is across various industries, your portfolio will suffer.

However, this rate hike will make debt market more attractive for investment. Hence if you have invested in the debt market, you will be able to enjoy higher returns despite losing some money in the stock market.

Now that we have covered both the broad risks, let’s get into the other kinds of risks that you would need to consider.

Credit Risk :

This type of risk exists in the debt market, especially with the bonds. This is the risk that the borrower will be unable to pay the principle and/or the interest amount to the investors. Whether it’s a government bond or a corporate bond, both carry this risk.

As I stated above, a government bond will carry a much less credit risk and therefore will pay you a lower return. On the contrary, a corporate bond carries a higher credit risk and will pay you a higher return.

So how would you know how risky a bond is? Simple. Just check the ratings given by any government or private credit rating agency. CRISIL is one such globally renowned credit rating agency. 

Liquidity Risk :

The risk that you won’t be able to sell your investment at the fair value or be able to sell if when you want to.

    Let’s say you want to sell the shares of a banking company which has recently gotten involved in a loan scam. Naturally, the share prices will fall hard and fast. Out of panic, you would end up selling your shares at whatever price you can get in order to avoid losing out all of your invested money.

   On the other hand, it could also happen that NSE and SEBI may block the trading of this stock. In this case, you are now stuck with your stock. You can’t even sell them and take back your money.

There is no real way of escaping this risk. All you can do is ensure you have analyzed the company in-depth before investing money in its stock.

 

Foreign-Exchange Risk :

This risk applies only when you hold assets in a different currency than your home currency. Let’s say you own a real estate property in U.S.A. Any return you receive from that will have to be converted into rupees.

Now if the exchange rate goes from $1 = ₹74 to $1 = ₹73, you stand to lose money. Hedging, your Forex returns by entering in a futures contract can help you mitigate some portion of this risk.

Conclusion

Some risks can be avoided, some can be minimized and others can’t be avoided. So how do you balance these risks?

It all depends on your risk appetite. You should create your portfolio after carefully analyzing each of the above risks and their consequences.

Also, you would need to continuously assess the current economic and political climate and identify any trends that may show up. Therefore, you need to keep yourself updated with all the events around you.

The better your analysis, the better will you be able to manage your investment risks.

Technologies In Business

      The computer has introduced the world to the internet. The internet has brought us into a new age of development. Through computer technology and internet development, business are rapidly developing and at the same speed changing. Technology has become very important in the business world. No matter small or big business. Technology has made a tremendous impact on company’s processes and operational effectiveness. Companies have been reliant with technology for analysis, communication and advertisement. Most importantly, technologies have affected how people find employment and how companies locate qualified candidates.

The business world is using technology in so many ways, for example, technology is used to simplify communication, it is used to promote and market services and products, it is used to invent new products and services, technology is used for human resource management and it is also being used to understand consumer needs and wants, and so much more.

1.Easy Product Launch: Nowadays, things have become simple,through email subscriptions, companies will have data for most consumers,So if they introduce a new item or service. The company will draft one email with details about a new service or product and that message will be delivered to all consumers in a minute.

2.Product or service surveys: A business can conduct a survey using social networks and provide users with incentives like ‘’gift cards’’.This produces a quick response and saves the company money and time.

3.Video Conferencing:Gone are the days when you had to wait for your boss to be in the meeting to start a presentation. New technology enables your boss to be in the business meeting.

4.Social interaction with consumers: With the recent invention of social networks like Facebook and twitter, a business can create business pages then get followers for these pages. The process is so simple and free. For some business, they set a budget for building a fun base for their pages, so they use these pages to update and communicate with their followers.

5.Use of digital networks : Phones and printers are all digitized, not like before when communication was hindered by telephone lines. During bad weather, most the lines would go off. Now with satellite and broadband transmissions, you can communicate with anyone at work or off work via their mobile phones. You can also send a file to a printer while you are at home and someone in the office gets the printout.

6.Use of emails: Even though social networks are trying to replace email communication; there is certain information which users cannot exchange via social networks. So email services like yahoo mail, Hotmail, and Gmail. Have eased communication. It’s now very rare to find a person writing a letter because that will involve posting it to a postal office and paying delivery fees, 

which is not the case when you use electronic mail.

I’ll conclude that Now-a-days technology has improving much higher. People should do smart work instead of hard work using technologies available. If we implement these things in office or business the work load will be reduced and time as well as money will be saved.

Health & Its Importance In One's Life

    

      Health defined according to Kurdish, the root of all health is in the brain,the trunk of it is in emotion, the branches and leaves are the body,the flower of health blooms when all parts work together. People of past generations used to live for more years without any major disease when compared to the present generations the reason being they maintained good health conditions. Health is one of the most basic need of everyone’s life, in simple terms being healthy means taking good care of the body.

      Every individual has their own dreams to be fulfilled, the very basic requirement that is needed to achieve is being healthy. The famous saying “Health Is Wealth”reminds us the importance of health in our lives, if one is well paid and well settled in his life but if he lacks health in his life then he cannot enjoy his life to the fullest potential. One should focus on his health while he is working, without good health conditions he will not be able to use his skills to the full potential.Being healthy is not only mean to have a fine body. When you describe a healthy body it also indicates toward our mental health. Without having a good relationship between a healthy mind and a body, you cannot archive happiness in your life. Workplace is a test for you to examine the importance of health. As an employee, you have to focus on your work and have to work hard to showcase your abilities. Sometimes Promotion competition and workload really stress you out. To, overcome these exhausting tasks you need to have a sound and relax mind. If you’re health your body and mind will not worry about work pressure and mental stress and you will handle these burdens with a positive attitude. This positive enthusiasm evolves you to focus on the achievements and keeps you away for any negativity.A person of perfect health does not avoid his duties. He can work properly and leaves nothing undone. In short employee health is important because it helps to maintain and improve the employee performance both quantitatively and qualitatively,reduce employee absenteeism and turnover,Improve employee morale and motivation.

To conclude in the busy schedule, one’s life he must give importance towards their personal health conditions which also helps them to live a happy and memorable life.

    Some Tips :

•         Keep smiling when you are stressed because the when the tissues     around the  jaw expands it activates brain to think positive and be calm.
•          Drink more water.
•          Get enough sleep: Go to bed early that helps you to wake up fresh.
•          Meditation : When you are stressed out in workplace take a break for 5 minutes and start inhaling and excelling slowly that helps your brain get more oxygen.
•          Adopt the habit of jogging or walking daily.
•          Eat fruits before sleep.
•          Engage in exercise daily.
•          Avoid eating junk food. 

What is High Sea Sale under GST?

            High Sea sales is a sale carried out by the actual consignee (i.e, the consignee shown in the Bill of Lading) to another buyer while the goods are yet on high seas or after their dispatch from the port of loading and before their arrival at the port of discharge.

For example- A company in Germany supplies goods from Germany to another company in Sri Lanka — this is not a supply in the course of inter-state trade or commerce because it commences and concludes outside the territory of India. It would be so, even if the goods were supplied by the company in Germany from Germany to a customer incorporated in India if the goods are not ‘brought’ into India but sold in high seas to yet another company in Singapore.

In order for every supply to come within the operation of Section 7(2) of IGST Act it requires that the resultant effect of the supply must cause the goods to enter the territory of India.

This Act does not enjoy extra- territorial jurisdiction and is limited to imposing tax if the goods are imported into the territory of India.

It has been clarified vide Circular No- 33/2017- Customs dated 1st August 2017, that IGST on High Sea Sales transaction on imported goods, whether one or multiple, shall be levied and collected only at the time of importation i.e. when the import declarations are filed before the Custom authorities for the custom clearance purposes for the first time.

GSTR - 9

    Form GSTR-9 is an annual return form to be furnished by all registered taxpayers. The registered taxpayers include those who are registered under the composition scheme as well. The said return gives exemption to the following persons:

1)   Casual Taxable Person

2)   Input service distributors

3)   Non-resident taxable persons

4)   Persons paying TDS

The GSTR-9 has to file different form by different people as below:

1.  GSTR-9: It should be filed by the regular taxpayers who are filing             GSTR-1, GSTR-2 and GSTR-3.   
2.  GSTR-9A: It should be filed by the persons registered under composition     scheme. 
3.  GSTR-9B: It should be filed by the e-commerce operators who have filed   GSTR-8.
4.  GSTR-9C: It should be filed by the taxpayers whose annual turnover        exceeds INR 2 crores during the financial year. All such taxpayers are also required to get their accounts audited and file a copy of audited annual accounts, reconciliation statement of tax already paid and details of tax payable as per audited accounts, along with this return.

The other important points are:

• There is no option for return being revised.
• The due date for FY 2017-18 is 31^st December, 2018.                               
• The return is said to be a summarized of the details filed in the previous returns filed. But, there is a dilemma that weather we can put the details that are missed out in filing the monthly returns. We are supposed to wait for any further communication by the department.

Applicability of TDS & TCS on GST

   Goods and Service Tax is the trending topic in today’s business world, as it is newly introduced, many companies are facing difficulty in applicability, yet another notification is to be introduced which will be applicable 1st day of October 2018 as many are yet to figure out all the provisions of GST this addition made to the act would definitely impact on business transactions.

           The Central Government vide Notification No. 50/2018 - Central Tax dated September 13, 2018 and Notification No. 51/2018 - Central Tax dated September 13, 2018, has appointed the 1st day of October 2018, as the date on which the provisions of Section 51 of the CGST Act, 2017 (i.e. Tax deduction at source) and Section 52 (i.e. Tax collection at source) shall come into force. According to this section following persons are required to deduct TDS

  1. A department or establishment of the Central Government or State      Government or

  2. Local authority or

  3. Governmental agencies or

  4. Such persons or category of persons as may be notified by the            Government on the recommendations of the Council.

Under Section 51(1):  TDS is to be deducted when Suppliers of taxable goods or services or both to the deductor(s), where the total value of such supply, under a contract, exceeds INR 2,50,000 to be deducted @1% [i.e. 2% for CGST+SGST/UTGST or IGST] from the payment made or credited to the deductee and the purpose of calculationthe value of supply shall be taken as the amount excluding CGST, CGST/UTGST, IGST and cess indicated in the invoice.

Under Section 51(2): The amount of TDS shall be paid to the Government by the deductor within 10 days after the end of the month in which such deduction is made.

However, the deductee under section 51(5) canclaim credit, in his electronic cash ledger, of the tax deducted and reflected in the return of the deductor furnished under Section 39(3).

For the cases where is excess deduction Under Section 51(8)Refund to deductee arising on account of excess or erroneous deduction shall be dealt in accordance with Section 54.

Tax collected at source 

 Under section 52(1): Every electronic commerce operator ('operator'), not being an agent, shall collect TCS at prescribed rate when taxable supplies are made through it by other suppliers and the consideration with respect to such supplies is to be collected by the operator,

       For example;There are many e-commerce operators, like Amazon, Flipkart, Jabong, etc. operating in India. These operators display on their portal products as well as services which are actually supplied by some other person to the consumer. The goods or services belonging to other suppliers are displayed on the portals of the operators and consumers buy such goods/services through these portals. On placing the order for a particular product/service, the actual supplier supplies the selected product/ service to the consumer. The price/consideration for the product/service is collected by the operator from the consumer and passed on to the actual supplier after the deduction of commission by the operator. The Government has placed the responsibility on the operator to collect TDS from the supplier. This shall be done by the operator by paying the supplier, the price of the product/ services, less the amount of TDS.

    The rate of interest remains the same as that of TDS being rate not exceeding 1% of the net value of taxable supplies of the goods/services supplied through the portal of the operator.

'Net value of taxable supplies' shall mean the aggregate value of taxable supplies of goods or services or both, other than services notified under sub-section (5) of section 9, made during any month by all registered persons through the operator reduced by the aggregate value of taxable supplies returned to the suppliers during the said month.

Every e-commerce operator is required to compulsorily register in GST irrespective of threshold limits.This clause is amended vide the CGST Amendment Act, 2018 to restrict applicability of compulsory registration to only those cases of e-commerce operator who is required to collect TCS under Section 52 [yet to be notified].

·         Section 24(ix) of the CGST Act, 2017 makes it mandatory for every person who supplies goods/services through an operator to get registered under GST.

     ITC to Suppliers: Under section 52(7); The tax collected by the operator shall be credited to the cash ledger of the supplier who has supplied the goods/services through the operator. The supplier can claim credit of the tax collected and reflected in the return by the Operator in his [supplier’s] electronic cash ledger.

GST - Utilisation of Cash Credit

        

Presently, under GST law there is a concept of Cash Ledger wherein cash payments are being made by the tax payers under the three major heads viz: CGST, SGST & IGST. These major heads are further sub-divided into five different minor heads viz: Tax, Interest, Fee, and Penalty & Others. 

Now, a tax payer has to pay tax under one major head and under one minor head combination. Further tax paid is credited to that particular major & minor heads and is adjustable with the liability under such heads only.

Even if a tax payer has a surplus amount under one head and deficit under the other he has no option to offset.

He needs to pay the deficit amount and to claim the surplus amount either as refund or to carry forward it for future liability. Due to such a bar the tax payer’s not only working capitals is blocked but also they are saddled with the burden of claiming refund.

Thus it is suggested that the Govt. should collect money under one common cash ledger and allow assessee to adjust the liability there from as per their need and requirement.