As GST law mandates, businesses with an aggregate turnover of Rs.5 Crore and above must generate e-invoices for all business-to-business (B2B) and business-to-government (B2G) transactions. The new e-invoicing system was implemented to bring transparency to the GST framework. However, businesses are still confused about generating e-invoices as they differ from generating regular invoices on their systems.
This article will help you better understand the e-invoicing framework and discuss the measures you can take to streamline your e-invoicing journey.
What Does the New e-Invoicing Framework Require
The new e-invoicing system mandates submitting all invoice information, including the supplier data, buyer data, GSTINs, invoice number and all other information to the IRP, i.e. the Invoice Registration Portal, a designated government website, to submit all invoices. However, all this information needs to be submitted in a specific format known as JSON format.
Regular systems may not produce JSON files. Businesses need to use the free tool provided by the government or specialized billing software or e-invoicing software to produce JSON files. These files are then submitted to the IRP, which will verify the invoice information and validate it by digitally signing it and generating a unique IRN reference number and QR code.
Once the validation is completed, businesses can take the printout of the invoice with the QR code and IRN printed on it. Thus, an invoice generated with the QR code and IRN is called an e-invoice. A B2B or B2G invoice without an IRN or QR code is invalid.
In this scenario, businesses have two options – either to generate e-invoices on the government IRP or use a billing software that can generate e-invoices on its system by integrating with the IRP.
Using Government IRP to Generate e-Invoices
If you wish to generate e-invoices on the government IRP, you will be entirely dependent on the website’s technical capabilities. If there is any technical issue with the IRP, you may be unable to generate e-invoices whenever you want. Further, if many people use the IRP simultaneously, it might crash unexpectedly. These delays can impact cash flow and your business operations.
Choosing Billing Software to Generate e-Invoices
If you’re already using billing software to generate invoices, ensure it now allows you to generate e-invoices from the same platform. If not, it is better to switch to one that allows e-invoice generation along with the regular billing and invoicing operations.
If your billing software for retail shops generates e-invoices or if you’re choosing a new e-invoicing-capable billing software, here are the important things to consider. Making sure all these features are available in the software is quite essential to have an efficient e-invoicing software in place.
- Easy e-Invoice Generation: Billing software with e-invoicing capabilities typically partners with GST Suvidha Providers to enable their platforms to integrate directly with government IRPs. This means such billing software would allow you to generate e-invoices on the same platform without having to visit the government IRPs. This not only saves time but also removes the pressure of dealing with the technicalities of the government portals.
- Data Validation: Not just simply converting to JSON files and uploading them, an ideal billing software should also be able to validate data by spotting errors even before uploading it to the IRP. Critical data checks are crucial to increase the approval rate of invoices, thereby improving the efficiency of the billing operations.
- Bulk Invoice Upload: For businesses requiring a large number of e-invoices, it’s important to check for the bulk invoice upload feature that would significantly save time and effort. With this feature, you can push more invoices simultaneously and get the e-invoices generated on time.
- Quick QR Code Creation: Find software that easily creates QR codes for your invoices. This helps you share invoice details without needing to find them elsewhere.
- Automatic Reconciliation: The software should automatically match your invoices with your GST returns. This saves time and ensures everything matches up correctly.
- Invoice Tracking: Make sure the software lets you see where your invoices are in real-time. This will help you stay organized and make filing your GST returns easier.
- e-Way Bill Generation: Look for software that can generate e-way bills for you and send them straight to the portal. This saves time and ensures that your bills are always correct.
- No Extra Costs: Choose software that doesn’t charge extra for making e-invoices. This will help keep your costs down and make budgeting easier.
Security Measures in e-Invoicing Software
Data safety and security play a key role in e-invoicing. While choosing the software, ensure it offers the below levels of security to ensure your data remains secure.
- Data Encryption: Robust e-invoicing software employs data encryption, rendering intercepted data unreadable to unauthorized parties.
- Authentication and Authorization: e-Invoicing systems utilize stringent authentication methods to validate user identities. Users gain access only to relevant information and tasks based on their roles.
- Digital Signatures: Digital signatures authenticate the origin and integrity of e-Invoices. They serve as proof of the invoice’s authenticity, providing confidence to recipients.
- Audit Trails: Extensive audit trails record every action within e-invoicing systems. These logs offer transparency, aiding in the detection of security breaches by identifying who accessed specific information and when.
- Data Backup and Disaster Recovery: e-Invoicing software often incorporates robust data backup and disaster recovery mechanisms. These safeguards protect data in case of system failures.
- User Training and Awareness: Security education is essential. e-Invoicing software providers offer training programs and awareness campaigns to educate users about best practices.
If the e-invoicing or billing software in your list offers all the above-mentioned features along with some other features, you can go ahead with it without any second thought. If multiple software offers similar features, you can check other factors, such as customer reviews, pricing plans, ability to scale with the organization’s needs, etc., to choose the right software.
FAQs on e-Invoicing Software
How does e-invoice software work?
e-Invoicing software facilitates the creation, validation, and sending of electronic invoices. It seamlessly integrates with accounting and tax systems for compliance.
What are the advantages of using e-invoicing software?
e-Invoicing software offers benefits such as reduced paperwork, faster invoice processing, improved accuracy, cost savings, and enhanced compliance with tax regulations.
How can I determine if my business is eligible for e-invoicing?
Eligibility is often determined by total turnover and legal requirements. For eligibility criteria, consult tax authorities or e-invoicing service providers.
What are the different methods of e-invoice generation?
e-Invoices can be generated through direct entry on e-invoice portals, integrated software solutions, and APIs connecting with government systems.
How often should security audits be conducted in e-invoicing software?
It is important to conduct regular security audits to detect any vulnerabilities. apply necessary updates or patches. The frequency may vary but should be done periodically.
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