How to Effectively Manage Books of Accounts for Multiple GSTINs

Best Way to Manage Books of Accounts When You Have Multiple GST Registration (GSTIN)
|Updated on: June 13, 2023

Bookkeeping is an essential component of managing a business properly. However, bookkeeping should be in accordance with the local laws and regulations for the company to be compliant with taxes and other levies. Accounts and bookkeeping allow business owners to monitor, analyze and control their cash flows and financial transactions.

As per GST Act, all GST registered business should maintain the books of accounts and records for at least a period of 6 years. If you have multiple GST registration, you maintain it for each of the GSTIN.

The importance of bookkeeping in GST

A business should know precisely how much money it is transacting and the details of each transaction. The maintenance of accounting records is essential for the business to accurately generate invoices, bills, and accounting reports. However, another vital use of bookkeeping is to keep records in order to compute the taxes and other dues that are to be paid to the authorities and government agencies. A company that does not maintain proper records will not be able to maintain compliance and is more likely to default or file faulty returns and face penalties or fines.

Bookkeeping is also essential to maintain a record of accounts receivable and  as well as accounts payable and the amounts that are due to be paid to others. Both these amounts have tax components that the issuer of the invoice has to record in order to pay taxes correctly. 

Best practices businesses can embrace to manage their books with multiple GSTIN

Companies with a single location or office usually have one GSTIN making it simple enough to manage the accounts and file GST with that single GSTIN. However, when there are multiple locations, the company may have to apply for multiple GST registration for each location and maintain their books of accounts accordingly. When the locations are in different states or union territories, opting multi GSTIN is mandatory. An individual with two very different businesses within the same state or union territory may also apply for an individual GSTIN for each of the business vertical.

TallyPrime now supports multi-GSTIN registrations under the same company

Maintaining accounts for multiple GSTINs involves compiling the GSTIN filing statements/returns separately. This has a significant impact on how one should manage books of accounts.

Considering the multi-GST registration, there are two ways in which books can be maintained that facilitate GSTIN-wise reporting.

Decentralized way of managing books of accounts

One way of managing different GSTINs is to create individual company accounts for each branch. In this manner, all the details relating to that GSTIN can be compiled into reports by extracting the information from the branch company’s records. So, in this way, even if the company records are maintained centrally, they will be recorded as individual companies/books for each GSTIN. For example, if you have 5 branches ( having separate GSTINs),  you must create 5 individual company accounts for each branch.

While decentralized management of accounts may be convenient, most businesses hesitate to adopt this method. The biggest concern is that the company may be unable to generate consolidated financial statements, reports, analyses, and forecasts based on all their data. However, it’s not the same if you are using TallyPrime. You can have separate books of accounts for each branch. In parallel, you can continue to get a consolidated view of all the branches, including consolidated balance sheet, profit and loss account etc.

Consolidated way of managing books of accounts

Some companies prefer to maintain all their accounts in one consolidated manner despite having multiple locations or more the one GST registration. This enables them to treat all their multiple business locations as branches under a single umbrella. One consolidated company also enables better data reporting, analysis, and a unified platform to manage the accounts. This becomes a little cumbersome unless you can distinguish invoices branch-wise since the GST return filing is GSTN-wise.

Which is better?

A company can choose to maintain its books of accounts in an individual or consolidated manner for multiple GST registration numbers. The appropriateness of the method used depends on the company itself, and there is no right or wrong way.

The company should align its bookkeeping to how its business operates. If the management of each location is individual and there is no detailed centralized control over the branches, a decentralized method will align with the compartmentalized management system. However, if all the branches are managed as one with the most decision-making and accounting reviews from the central location, a consolidated system is more applicable. A company should choose the method that best suits its internal requirement.

Additional capabilities of TallyPrime's new release

The latest version of TallyPrime is filled with numerous features to cater to your GST as well as other business function needs. The new version makes it easy to manage transactions and returns across multiple GSTINS from the same company. This simply implies that at the close of a certain month, you could easily integrate your multi-GSTIN data and handle TDS returns, salary payments, overdue management, and so on with improved efficiency. Here is a quick list of things that you can do using multi-GSTIN feature in TallyPrime:

  • Create & manage multiple GST registration details
  • Generate GST returns GSTIN-wise
  • Easily categorize or identify transactions GSTN-wise
  • Tag vouchers to specific GSTINs
  • Create multiple voucher numbering series
  • Combine return and reports view
  • Track GST return activities

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