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Tag: MSMES

  • How can MSMEs better manage their payroll systems?

    How can MSMEs better manage their payroll systems?

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    Payroll can be a pain for budding Micro, Small, and Medium Enterprises (MSMEs) who are looking to grow their profits, scale their operations, and take their business to the next level. However, while having a functional payroll management system is critical to success, getting there is easier said than done. MSMEs face various hurdles in doing so, including limited human resources, compliance with the maze of bureaucratic regulations, complicated benefit computations, and diverse payroll schedules, among others. These, not to mention the birthing pains of transitioning to a payroll management system. As such, some MSMEs go at it the good old-fashioned way: manual pen and paper processes that take time and effort.

    If you’re an MSME on the fence about investing in a payroll management system, you’re in luck. We outline below what makes a payroll management system worth it and what you should look for in one.

    1. Automated benefits and taxes calculation 

    A good payroll management system should, at its very core, enable MSMEs to automatically crunch the government-related mandatories of their employees, including taxes and contributions to social security, state healthcare, and housing, with all computations compliant with regularly updated standards. Such benefit calculations can be complex and may take into account even factors such as location, working hours, and active days. One wrong entry, and you might find yourself in a needless and easily avoidable legal battle. Automated calculations reduce the risk of human error, ensuring accurate disbursement of benefits to employees.

    2. Salary and payroll cycle management 

    Every company has its unique policies and structures regarding salaries and payroll schedule disbursement. MSMEs with more than a handful of employees with different functions will likely have varying payment structures and payroll cycles. Company policies regarding compensation and benefits may also change over time as business health, industry standards, or regulations evolve. Moreover, businesses may have a combination of daily, weekly, semi-monthly, and monthly payment schedules. An adaptable payroll system enables MSMEs to easily handle these variances while ensuring that employees are paid the correct amount at the correct times.

    3. Embedded and automated human resources process features 

    Human resources (HR) functions such as attendance tracking, leave management and employee onboarding should go hand in hand with your payroll management system. Integrating these streamlines administrative tasks, reducing manual data entry, minimizing error, and increasing overall organizational efficiency. Moreover, a payroll management system with automated HR features ensures that data related to employee presence management is accurate and up-to-date, at the same time ensuring that payroll calculations are correct and compliant with labor laws and company policies. This seamlessness becomes more critical the larger a workforce becomes. 

    4. Real-time reports and metrics

    Your payroll management system should be able to provide real-time reports and analytics into payroll trends, employee costs, and compliance metrics to enable you to make decisive actions when they count. This is especially important when the MSME is trying to resolve an issue, identify trends with salary-related finances, and optimize payroll processes. By having trends and patterns in payroll data easily accessible, organizations can make adjustments to manage costs, such as adjusting overtime schedules, monitoring labor expenses, and optimizing staffing levels.

    5. Easy setup 

    But what good is a functional payroll management system if it is a pain to set up and is hard to use? Ideally, the payroll management system you start using is straightforward in this aspect, so you can deploy it quickly while minimizing downtime and disruption to your payroll processes. An easy-to-setup system also means less training time, freeing up your HR staff to focus on their other important responsibilities. Lastly, as competition gets tighter and tighter in all business sectors, a quickly installable payroll management system will enable your MSME to better position itself for success.

    As a decades-long partner of MSMEs, M Lhuillier knows the struggles that business owners face when it comes to managing payroll finances. In developing its ML Payroll PRO system, M Lhuillier seeks to share its legacy of financial expertise to revolutionize the way MSMEs operate, empowering them by simplifying and automating their critical payroll functions and processes. Not only does the ML Payroll Pro boast of the above features, it also is COMPLETELY FREE TO SETUP and has NO SUBSCRIPTION FEES. What more can you ask for? 

    For MSMEs looking to explore the advantages of the ML Payroll PRO system, you may contact (+63)947-999-0751 or email [email protected] to discuss how ML Payroll PRO can take your business to the next level. 

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  • L&T Finance inks $125-m pact with ADB to support rural India

    L&T Finance inks $125-m pact with ADB to support rural India

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    L&T Finance, one of the leading non-banking financial companies in the country, has signed a financing pact with ADB for $125 million to support financing in rural and peri-urban areas of India, particularly for women borrowers.

    The funding comprises a loan of up to USD 125 million from ADB and an agreement to syndicate an additional $125 million in co-financing from other development partners. At least 40 percent of the proceeds are allocated to women borrowers, while the rest will support farmers, micro, small, and medium-sized enterprises (MSMEs), as well as loans to purchase new two-wheeled vehicles.

    Commenting at the signing ceremony, Sachinn Joshi, Group Chief Financial Officer, L&T Finance, said, “This collaboration with ADB aligns with our core values of social responsibility. We believe this partnership with ADB is a significant step and will boost our ongoing efforts to bridge the financial gap and promote inclusive economic growth across the country. For our company, this long-term loan forms part of our continuous strategy of diversifying our funding sources. At L&T Finance, we recognise the deep impact that financial inclusion has on the communities we serve. And, through our on-lending activities in the underserved and lagging states in India, we pursue to be a catalyst for empowering individuals, especially women, farmers, and MSMEs, thus fostering economic resilience.”

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  • RBI allows all factors to participate as financiers on TReDS platforms

    RBI allows all factors to participate as financiers on TReDS platforms

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    To augment the availability of financiers on TReDS (Trade Receivables Discounting System), the Reserve Bank of India (RBI) on Wednesday, allowed all entities that can undertake factoring business, to participate as financiers on such platforms.

    “The Factoring Regulation Act, 2011 (FRA) allows certain other entities / institutions to undertake factoring transactions. Accordingly, all entities / institutions allowed to undertake factoring business under FRA and the rules / regulations made thereunder, are now permitted to participate as financiers in TReDS,” the central bank notified.

    TReDS transactions fall under the ambit of ‘factoring business’ and currently only banks, NBFC-Factors and other financial institutions can be financiers.

    The RBI also permitted insurance facility for TReDS transactions to aid financiers to hedge default risk. This is because financiers usually place their bids keeping in view the credit rating of buyers, and are not inclined to bid for payables of low rated buyers.

    Insurers on TReDS

    As a result, insurance players will be now become the fourth participant on TReDS platforms, in addition to MSME sellers, buyers and financiers.

    TReDS platform operators will need to specify the stage at which insurance facility can be availed. Further, no insurance premium can be levied on MSME sellers, and collection of premium and related activities will be enabled through National Automated Clearing House (NACH) system.

    “Based on consent received from financiers and insurance companies, TReDS platforms could facilitate automated processing of insurance claims and specify timelines for their settlement through the NACH system. As of now, the credit insurance shall not be treated as a Credit Risk Mitigant (CRM) to avail any prudential benefits,” RBI said.

    Factoring units

    While TReDS guidelines provide for discounted or financed factoring units to have a secondary market, it has still not been introduced. Given the experience gained so far, TReDS platform operators may, at their discretion, enable a secondary market for transfer of FUs within the same TReDS platform, the central bank said.

    TReDS platform operators have also been permitted to settle all factoring units—financed, discounted or otherwise —using the NACH mechanism, with specified timelines for funds settlement. This is to overcome the inconvenience caused to MSMEs and for better reconciliation, as around 17 per cent of factoring units uploaded are not discounted or financed and buyers need to pay MSME sellers outside the system.

    To ensure transparent and competitive bidding by financiers, TReDS platforms will be required to display details of bids placed for a factoring unit to other bidders; without revealing the name of the bidder.

    Three entities — A.TREDS (Invoicemart), Receivables Exchange of India (RXIL) and Mynd Solutions (M1 exchange) operate the three TReDS platforms in the country; whereas C2FO Factoring Solutions has been given in-principle authorisation.

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  • Telangana Govt and JustDial partner to digitise, guide MSMEs

    Telangana Govt and JustDial partner to digitise, guide MSMEs

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    Local search engine company, JustDial, has partnered with the Telangana Government to digitise the Micro, Small, and Medium Enterprises (MSMEs). This partnership will ensure that MSMEs adapt to ways of doing business digitally, realise their marketing potential, and reach out to customers in an effective way. 
     
    The two entities will target MSMEs in cities such as Suryapet, Adilabad, Nizamabad, and more. Besides, JustDial also aims to provide MSMEs an access to its offerings such as JD Mart, JD Xperts and JD Pay which will help them with various services such as an online B2B platform, on-demand home services and an online payment system for traders. 
     
    Commenting on this development, VSS Mani, MD and CEO of Justdial said, “Telangana is helping MSMEs build digital infrastructure and improve their digital footprints to sustain themselves. MSMEs will gain from Justdial’s wide suite of digital services that are designed for growth transformation.”
     
    The main aim of this partnership is to rejuvenate the industrial sector of Telangana as well as address the challenge of information asymmetry within this sector.
     
    It is vital to note here that the MSME segment is an important component of the Indian economy. It contributes about 30 per cent to India’s GDP, and 45 per cent to India’s exports and is also the second largest employer of workforce after agriculture, as per data shared by the Micro, Small, and Medium Enterprises Ministry. Prime Minister Narendra Modi has often highlighted the critical role this sector will play to help India become a $5 trillion economy. 
     
    A joint statement by JustDial and the Telangana Government stated that this synergy will provide an enabling environment for businesses in Telangana and thereby push the ease of doing business quotient within the state.
     

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