'SMEs, which switched to e-commerce,manage to benefit from pandemic-induced demand'

Why has it been difficult for SMEs to recover from pandemic effects wherein MSME adapted to the situation in a real time?

Pandemic had rendered most of SMEs in manufacturing and trading segments to a complete halt, of-course barring those dealing in essential items. The impact was scathing as the entire working capital got stuck and to a stage that there was a major capital loss – deterioration of stocks viz. raw material, in process and finished goods.

While Govt had its sincere attempt to mitigate the hardships, the execution thereof through FIs was not only tardy but was aimed at those who were already having credit facilities with banks. Those who didn't have any credit facilities remained out of the ambit of the mitigation plan.

Further, there was hardly any mechanism to address or mitigate the capital erosion from the SMEs' book. Needless to mention that, aging receivables only added to the woes. Pertinent here to mention that on the flip side, some of the SMEs who switched to e-commerce route did manage to mitigate or benefit from the pandemic.

Why do SMEs need to shift their operations in a digital first manner especially for players beyond the top 3-5 cities?

The mobility and mobile commerce are unstoppable, now, globally. It's important therefore for the SMEs in India to take note and move beyond 'personal' use of mobility to 'for the business' use. While this is getting well entrenched into the Metros, players in tier-2, tier-3 towns are still shy and largely keeping their stakes limited to the conventional model.

With technology cutting across territories and strata, the consumer is getting a better hang of use of mobile apps to make up with the pace of change. With consumers getting adopted to mobile, en-mass, its imminent for the SMEs to also place MobileFirst on the top of business priority. With virtual stores and deliveries becoming new norms and 'large to very large players' peeping closely into the tier-2-3 territories, it's time for SMEs in this space to up the ante and use mobile app to give a similar or a better customer experience to ward off the competition. Their USP is the deep knowledge of the DNA of the local consumers. Use of mobile technology embedded with this knowledge would keep them relevant to their target group and ring fenced from the emerging threat from big players.

How the surge in demand from SMEs post-Covid has helped them scale their businesses?

SMEs have always remained a lifeline for large players when it comes to supply chain. With digitalization of their operations through ERP applications, they are now better equipped to integrate their systems with corporate, etc., for a better visibility on potential gaps and addressing them in-time for cost efficiencies and assurances at both ends.

Prospective lenders or lending platforms more particularly those into unsecured lending to SMEs are more comfortable in putting their stakes on to such SMEs even at lower returns, as they get a better line of sight on their cash flows. Thus, a much-needed relief to SMEs remaining excluded from working capital finance, either due to lack of tangible security or exorbitantly priced loans.

With an integrated view on business operations, SMEs tend to have greater cost efficiencies, besides enabling an enhanced customer experience through behavior analysis or tech enabled interactive delivery viz. periodical or event-based alerts, notifications, reminders & greetings, etc.

Affordable ERPs are a boon for SMEs. It's just a matter of time for SMEs to get adopted to the same and making it a baseline for every business under SME umbrella. Govt of India has also identified this as a pressing need for SMEs and has been contemplating for mandating use of accounting software, in due course.

What is Alignbooks and how does it help SMEs simplify their finances and operations?

AlignBooks is a thought to provide a single window digital solution to SMEs. There are essentially 4 core problem statements for SMEs viz. management of working capital, financing operations, compliances and being inclusive to the digital environment.

While SMEs did adopt to automation covering their front operations and / or back-office operations, these were largely available in silos, rendering SMEs to have multiple touch points. SMEs lacked in getting an integrated view of their business. Hence, although automated, were not able to address the core problem statements, as above, in a holistic manner.

AlignBooks presents a product viz. 'AlignBooks ERP', a one stop platform for managing complete life cycle of SME businesses covering 'manufacturing', 'trading', 'distribution' and 'services' sectors.

It's comprehensive, in a way that the SMEs don't need to look elsewhere, beyond focusing on the core business activity. From procurement to sales, collections & payments, auto-reconciliation, all-inclusive taxation viz. GST and TDS/TCS, etc., the platform provides all, including a robust accounting & an embedded decision support system, all at an affordable cost.

SMEs, thus, not only have a better control on their working capital management, but also remain in a better position to present their financials including cash flows to the prospective lenders for ease of finance with a competitive pricing. Live dashboards covering compliances, provide a much-needed comfort to the SMEs, thus reducing dependencies on multiple agencies. Mobile apps on iOS and android, covering all essential functions and decision support, make them inclusive to the digital eco-system and adopted to the MobileFirst approach.