For the last 3 decades, Tally has been closely working with Indian SMEs and have been their constant partner for growth. Our experience over the years, have given us rich insights about how SMEs think, behave and function – which is what has allowed us to craft solutions for them which are simple to adopt, and yet have a huge impact on their growth and efficiencies. We have focussed on churning technology solutions, which allow businessmen to run their business the way they want, gives them the efficiencies which they need, and thus give them the right information at the right time, which helps them to manage and grow their business.
In the last few years, the business landscape in India has changed rapidly. The Indian economy has been a growing economy, which has of late embraced some revolutionary ideas – digitisation, less-cash, GST and so on. All this has made the market more competitive.
Under such circumstances, for a business to stay relevant, for a business to stay ahead of the competition, and for a business to continue growing – it needs to be efficient. In this section, we will present to you a series of articles, which will hopefully show you the way to unlock your growth, by removing inefficiencies in the following key areas of your business -
The Purchase Cycle is the process of how you obtain and manage goods and services for your business. In case you are a manufacturer, it will be about procuring raw materials needed for manufacturing a product; in case you are a trader, it will be about obtaining goods for trade; in case you are a service provider, it will be about obtaining materials required to provide a service. It starts from placing a purchase order with your supplier and ends with you making the payment for the same, after the order is fulfilled.
The Sales Cycle is the financial life blood for your organization. It basically determines how quickly an invoice or an order from a customer is translated into cash in your bank. In addition, it also determines the experience, perception and value add of the goods or service you are offering to your customer.
There are several expenses, you must be managing, while carrying out the day to day activities of your business. All these activities are not directly related with your core business activity, say – manufacturing, trading or services – but are crucial to keep your business running, and thus are classified as operating expenses. Popular examples of operating expenses include payroll, sales commissions, employee benefits, conveyance, amortization, depreciation, rent, repairs etc.
Receivables and Payables Management
Keeping track of your business outstandings, is extremely critical, as it impacts your cash flows. On one hand are your receivables – wherein you are expected to extend credits to your customers to maintain good business relationships; on the other hand, are your payables – wherein you are expected to pay up in time, in order to maintain your credit worthiness. Both receivables and payables need to be managed intelligently so that you are never in any kind of cash crunch.
Cash Flow is the difference in the amount of cash available at the beginning of a period (basically, your opening balance) and the amount of cash at the end of that period (your closing balance). In case your closing balance is higher than your opening balance, you are said to have a positive cash flow, and if it is the opposite, you are said to have a negative cash flow.
Funds Flow, on the other hand is a much broader view of your business, as it seeks to analyse the reasons for changes in your financial position. It deals with increase or decrease in your current assets or current liabilities. In other words, your funds flow statement tallies the funds generated from various sources with various uses to which they are put – which in turn impacts your working capital.
In case your business deals with inventory, you will surely be concerned about maintaining an optimum amount of stock at all points in time – and that’s where inventory management steps in. The objective of inventory management is to provide uninterrupted production, sales, and / or customer service levels, at the minimum cost possible. This is something, which needs to be closely tracked, as a lack of inventory can lead to lost sales for you, whereas an excess of inventory and increase your costs unnecessarily.
Periodic Statutory Compliance
Last but not the least, complying with GST and other statutory norms is imperative for businesses in India. As you may have surely sensed in the last one and a half years of GST, staying compliant requires valuable work time, resources and continuous monitoring to avoid penalties.
Understanding how you can ‘become better’ in each of these areas, will help you immensely to create a plan for business growth. Needless to stay, adopting the right technology, will always help you execute your plan, and you are most welcome to explore our products to bring your plan to life, and become better at managing your business.