December 26, 2022

E-invoicing: Steps & Benefits

E-invoicing or electronic invoicing is the invoice document exchange between a supplier and a buyer in an integrated electronic format. An electronic invoice is something which should contain data from the supplier in a format that can be entered into the buyer's Account Payable (AP) system without requiring any data input from the buyer's AP administrator. Under this approach, an identification number will be issued against every invoice by the Invoice Registration Number (IRP), which will be administered by the GST Network (GSTN). Let's go through E-invoicing: Steps & Benefits.

The E-invoice portal provides the following services:

1. Generation and cancellation of unique Invoice Reference Number.

2. Bulk generation of IRN (Invoice Reference Number)

3. Tracking of verifying details of e-invoice

4. An updated list of GSTINs generating IRN

5. Generation of MIS report

6. API (Application Programming Interface) registration

Steps and Benefits of E-invoicing

Search facilities like-

1. Taxpayer's search

2. Verify signed invoice

3. Status of e-invoice enablement

4. Master codes

5. PIN code search

6. PIN to PIN distance search

Stage 1

E-invoice enabling must be validated prior to registration on the invoice registration portal. The steps to verify the status are as follows:

1. Visit the official electronic invoice portal.

2. After selecting "Registration," click "Portal Login."

3. After selecting "Portal Login," we must input our "GSTIN" and click "GO."

4. Details from the GST portal, such as name, mobile number, and email address, would be shown automatically and after verification.

5. We must click the "Click on OTP" button. We can set the username and password after verifying the OTP with a registered mobile number.

Stage 2

After the registration, an e-invoice will be generated. To generate it you have to download the e-invoice utility from the portal.

Here's a list of various excel utilities in different formats such as-

Format A consists of a single worksheet that can be used by organizations with one or two invoice elements.

Format B is made up of two spreadsheets and differs from Format A in that invoice and item data are entered separately.

Format C is an expansion of Format B that uses five worksheets instead of two.

Format D consists of a single worksheet where invoice data and items can be entered individually.

After filling the details in it, you must go to the E-invoice details sheet and fill in the required details-

1. After entering the details in the utility, you have to select 'Validate'

2. After successful "validation," click "Prepare JSON" to generate it.

3. Following that, we must log into the "E-invoice gateway."

4. After checking in to the "E-invoice Portal," select "E-invoice" in the upper right corner. After that, click "Bulk Upload," then "Upload JSON" file, and an E-invoice is created.

Who should file an e-invoice

If a business with an annual turnover exceeding 10 crores, e-invoice will be applicable and you need to electronically upload all B2B invoices to the portal.

You need to generate the e-invoice in the required format and upload it to the IRP portal. The IRP portal will authenticate the invoice data and return the file with IRN and digitally signed QR code. Businesses that use business management software that connects to the IRP system via GSP and prints the QR code and IRN on the invoice will find it easy to manage e-invoice requirements with few changes to the business process.

Benefits of e-invoicing

Increased Accuracy

You can ensure accuracy due to improved visibility. It ensures a high rate of accuracy with no errors like overpayments and duplicate payments. E-invoicing plays an important factor for closing audit trials to simplify tracking.

Higher Compliance

An e-invoicing system is more than just a platform for filing digital invoices. It also enables a higher level of compliance with ease.

Reduced Risk

Greater transparency into trade and transactions means a lower chance of invoicing fraud, human mistakes, and so on. Companies can save time and money on cross-checking. It is a well-designed mechanism that eliminates the possibility of dangers entering the cycle.

Green initiative

You can save costs associated with paper-based procedures while also becoming energy-efficient and reducing waste.

Speed and Savings

E-invoicing allows for accurate tracking of money spent and saved. This essentially assists the leadership and procurement teams in tracking and gathering key cost centre data.

Cancellation of e-invoice

An e-invoice on the IRP can be cancelled within 24 hours of the IRN being produced. After 24 hours, you can either issue a debit or credit note to cancel the invoice or modify the invoice data on the GSTR-1. It is not possible to cancel an e-way bill for the IRN that has already been generated. It is not permissible to partially cancel an e-invoice. As a result, the invoice must be cancelled in its entirety. The same invoice number cannot be used to generate a new IRN if an e-invoice is cancelled. If an IRN is cancelled, the status is immediately updated in GSTR-1.

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Read More: IRN: Invoice Reference Number, Income Tax Guide 2023, HSN Code

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