Friday, September 25, 2015

Firms' accounting entries in India are gradually moving to the Cloud - albeit indirectly

Imagine what would happen if every delivery of goods in a commercial vehicle was supposed to carry a form printed from the government's website after entering the corresponding invoice details [currently there are regional versions of this concept - e-TRIP in Punjab, DVAT DS2 in Delhi, etc.]. This implies that every vehicle which is not carrying such a form can be assumed by taxation officers to be moving without complete covering documents [in this case the government form corresponding to its invoice] and can thus be impounded.

From a technology standpoint, what's essentially happening in such a setup is that, for all practical purposes, one's accounting has moved online, into the Cloud, on to the government's website. Of course, one continues to have an accounting software on one's computer in one's firm, but the government trusts and requires the equivalent of an invoice that has been generated from its own website. One's own invoice is thus less important.

People's accounting, therefore, practically moves into the Cloud, into the hands of the government. So if everyone records all their accounting transactions in a single, Cloud-based service, one wouldn't need a separate accounting software on one's computers and all firms can rely on the online service alone. This online service won't allow deletion/modification of invoices, and will thus solve - in large part - the problem of illegal movement of goods without complete/proper covering documents.

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