November 8, 2016 brought in the much talked about controversial financial transformation in the history of India. That evening, when PM Shri Narendra Modi declared the demonetization of 500 and 1000 denomination notes, nothing seemed positive about it. Businesses – small and big – were deemed to be worst hit. This step towards combating undeclared wealth and fighting the array of associated corruption that impacts every field from education and health care to stunted infrastructure and business development to fuelling terrorism wasn’t a welcomed one at all. The question is, “what made people so upset about fighting corruption?”. Whether they too were party in it, or were they too lazy to do anything about it except crib is another discussion for another time.
Today, let’s talk about how, against all apprehensions, demonetization, followed by the government’s insistence on transacting cashlessly, is actually a boon for independent professionals:
As the businesses, and we in general, were forced to deal cashlessly – using either plastic cash or paying online – more and more began to happen online through apps and payment gateways. Independent professionals and consultants in India too started receiving payments by direct fund transfer into their bank accounts. This proved beneficial in the following ways:
1. Convenience: All online transactions, whether done through card payments or internet banking, get recorded and documented in the bank statements. This becomes convenient for future referrals of any payment details, as well as ensures there is no gap in noting/recording a transaction (which can be missed when done manually).
Independent professionals are either individual workers or fresh startups with a very small strength and they don’t have different teams handling different departments. So, direct transfer of funds also saves them time in counting/managing cash or running to the banks to make deposits.
2. Safe: When all payments directly reach your bank accounts, you do not have to worry about carrying the bag full of cash to the bank, thus avoiding any danger of theft. And for all online fund transfers and transactions, banks and other payments apps like Mobikwik, Paypal etc. ensure secured gateways to avoid any scams and frauds.
3. Transparent and legal: When the banks have all your transaction records, then you don’t have to worry about the audits or any legal repercussions pertaining to your income statement. All taxes get duly calculated.
On a larger note, cashless economy minimizes corruption by reducing the scope of “making payment in black”. The businesses, including independent professionals and consultants, get paid what they are promised and “in white”, so that they don’t have to hide their income.
4. Quick settlements: Using just a click or a tap to make payments increases the speed of sending and receiving payments, which further decreases the turnaround time. Deals close faster and independent professionals feel motivated when their monthly balance sheet reflects timely revenue generation.
Cashless transactions save the time and money spent while visiting the banks to deposit cheques and then waiting for them to be cleared. This also avoids the hassles of dealing with bounced cheques which is very disturbing especially for fresh startups and independent consultants who live on a tight budget.
5. Increased generation of sales revenue: Many startups and freelancers began advertising about attractive discounts and offers on cashless purchase of their products and services. This has not only taken care of the initial setback caused by demonetization, but has increased the sales revenue significantly.
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