E-Invoicing was first introduced in October 2020 to enterprises with a turnover of more than 500 crore. After a successful run, the government decided to bring more businesses under the ambit of e-invoicing. The idea is to eventually bring all businesses and all transactions under the e-invoicing regime which would promote transparency. GST e-invoice can be generated only by the suppliers. The recipients and transporters cannot generate an e-invoice.
E-invoicing allows the government to track every business-to-business (B2B) transaction, which helps in the elimination of fake invoices and Input Tax Credit fraud. Every e-invoice includes a QR code written on it, which helps tax officers in determining their authenticity, particularly during the transportation of goods. The data from e-invoices gets auto-populated in GST returns and e-way bills. This decreases the overall data duplication exercise. It also accelerates the ITC claims procedure and ensures taxpayers that only genuine ITC is recorded.
To begin with time, all applicable enterprises must register on an e-invoice site such as NIC. Taxpayers who have already registered on the e-way bill site can use the same login credentials to access the e-invoice portal. Following that, the company must select the best method for creating e-invoices. E-invoicing does not imply creating invoices on the government portal; rather, it refers to submitting previously created invoices to the government for certification.
As a result, such reporting requires that every invoice, debit, or credit note be in the specified format known as the e-invoice schema. To capture IRN and QR code in the e-invoice, printing settings must be adjusted. All of the following are system changes that need the reconfiguration of the current billing or ERP system. One of the common ways to generate electronic invoices is through ERP connection. For the automated creation and cancellation of e-invoices, the taxpayer's ERP or accounting system is coupled with the IRP.
Automation of invoicing operations becomes crucial to ensuring the accuracy of bills produced through e-invoicing. Additionally, it would make it possible to track payments and instantly share documents between organizations.
It is essential that small and medium-sized businesses are aware about the e-invoicing mandate. It involves not only understanding how to generate IRNs through the e-invoice portal, but also knowing about the e-invoicing and e-way bill system, who does not need to generate IRN, transactions covered, data points necessary, e-invoicing software, and much more.
E-invoice implementation requires integration with external systems like solution providers and government institutions. Integration with external systems such as solution providers and government systems is required for e-invoice deployment. It also requires training all stakeholders and organizational departments. While these may be one-time activities, you must ensure that a mechanism is in place to keep everyone informed about new developments and changes inside the firm.
For generating IRN, taxpayers can opt for solutions that can be embedded in their current invoicing processes or use manual generation options. However, there are many tasks post IRN generation i.e., getting invoices printed with OR code, checking its auto-population in GSTR-1 and hence it is recommended to choose a solution that can meet all requirements of e-invoicing and GST compliance. Swipe is an easy-to-use free GST billing, invoicing and payment software for small sized companies. It creates invoices within a fraction of ten seconds.