Sound Management Is All About Optimum Mobilization Resources

Binod Lamichhane

Chief Tax Officer

Inland Revenue Office, New Road  

“Sound Management Is All About Optimum Mobilization Resources”

For any organization, sound management is all about the optimum mobilizing the physical/ non-physical resources to achieve its set objectives.

This office directly deals with relatively big amount of the hard-earned money of public for ultimately ensuring their well-being. From this perspective, it is all the more important for the office to adopt good management. We have been executing our daily functions pertaining to the three areas-audit investigation, tax payer service and tax collection- by realizing this fact well.

Take, for example, the area of tax payer service.  While managing it, the office is geared towards adopting not only trained staff members and but also customer-centric procedures. This has helped in collecting tax revenues in an efficient way by educating the taxpayers (about the importance of paying taxes).    Under the area of tax payer service, there are as many as 7 employees, including 3 officer- level ones, who are operating 6 desks in total.

In fact, the office is making utmost efforts to make sure that everybody pays his share of taxes. Some taxpayers voluntarily comply with the tax rules, others need assistance for this, and there are still others who require strong enforcement to make them pay.

For each category of taxpayer, we apply a targeted approach i.e tax compliance strategy ranging from providing services and assistance to enforcement measures.   

Fortunately, such an application is bearing the fruits.  That the tax collection volume of this office last fiscal year exceeded the set target of Rs 2.41 billion by  Rs 1 billion attests to this fact.  It collected the tax revenues of such amount from 4 wards of the Kathmandu Metropolitan-19, 22, 23 and 24.

In fact, the office is making utmost efforts to make sure that everybody pays his share of taxes. Some taxpayers voluntarily comply with the tax rules, others need assistance for this, and there are still others who require strong enforcement to make them pay.

For the current fiscal year, we have a target to mobilize around Rs 3 billion.  In order to meet this target, the office, among others, plans to work closely with Financial Information Unit (FIU) under the Nepal Rashtra Bank. This will assist us in identifying and addressing the problem of tax gap-—the difference between taxes that are owed and collected. Similarly, we are also adopting risk-based approach to deal with the non-filers with an aim to collect more tax revenues.

On the other side, the office has been effectively managing its internal resources like human in order to improve its overall performance.  For instance, the staff members are being imparted training on a regular basis so that they can enhance their professional knowledge and skills.   Likewise, a system of yearly evaluation of their work performance is being adopted to make them more committed towards their assigned duties.

Tips for Cash Flow Management

Cash flow is, of course, your business’s life blood. With a healthy cash flow, you can smoothly keep the company afloat.  Without it, you are simply prone to financial ruin.

Here are some best tips in managing cash flow:

1. Check your business status

Before working to manage cash flow, make sure your business is earning profits or at least has reached the break-even point. If either of them is the case, you’re doing something right.  If you fall short of it consistently, your business fundamentals need serious fixings.

2. Do a cash flow forecast

Prepare a cash flow projection for the coming year by considering customer payment histories, industry norm, business conditions, etc. Through the use of an Excel spreadsheet or accounting software, plug in the anticipated monthly cash inflows and outflows during the period.

During the budget period, compare and update your budget based on actual monthly performance.

3. Have an emergency backup plan. You can face a cash flow crisis as a result of any untoward incident. So, chalk out a clear, concrete a back-up plan that ensures you a source of reserve cash when you need it the most. A good rule of thumb is to have this source enough to cover at least three to six months worth of expenses.

4. Invoice promptly

Set very clear payment terms, in writing, before taking on a new client/supplier. Likewise, there should not be any delays  

 in invoicing your existing clients. In this regard, lay  out when payments for invoices could be made, whether it’s immediately upon invoice or within 15, 30 or 60 days

Especially the small businesses are recommended to invoice clients as soon as the work has been completed.

5.  Get acquainted with basic accounting.

 Knowing the fundamentals of business accounting is very helpful. It not only makes you able to read and understand financial statements but also more capable of monitoring the financial health of your business. This way, cash flow will always remain positive.

6. Leverage technology.

 Mobilise advanced tools to manage your cash flow easily and productively. The software dedicated to small businesses, like as cloud (Web-based) accounting services, is one of them.