Time-Saving & Globally Compliant E-Invoicing Software

Regular invoicing means preparing and sending invoices on paper or through email as PDFs. It’s a tedious and time-consuming process that can lead to errors. E-invoicing, on the other hand, is fully digital. You create, send, and receive invoices electronically through a government or third-party portal. It reduces manual work, ensures compliance with regulations, and allows real-time tracking and reporting. E-invoicing also integrates smoothly with your other business systems, like ERP and accounting, making everything more efficient.

An e-invoice is an electronic invoice in a specific format, verified through the Invoice Registration Portal (IRP). It’s used for documenting and monitoring business activities for tax and accounting purposes. An e-way bill, however, is required for transporting goods worth more than a certain amount to comply with GST laws. While e-invoices focus on the financial aspect, e-way bills ensure legal compliance for goods movement. E-way bills also include details like vehicle number and transporter ID, which e-invoices don’t have.

The e-Invoice Registration Portal (IRP) is an online platform managed by the government. You upload invoices here to get them validated and issued an Invoice Reference Number (IRN). The IRP checks if the invoice details follow GST laws and provides the IRN and a digitally signed QR code. This way, the invoice is verified and validated before being sent to the recipient and the GST system. The IRP also shares invoice data with the GST and e-way bill systems, reducing duplicity and manual entry errors.

An Invoice Reference Number (IRN) is a unique number provided for every e-invoice as it undergoes the validation process of the IRP. The IRN feature allows for the uniqueness of every invoice and there is no question of duplication. In the context of GST, it is required to handle and verify the proper invoices for the input tax credits as per the tax laws. The IRN is also used to validate that the invoicing is authentic and legitimate. In the absence of an IRN, it cannot be considered a valid invoice in the context of GST, and the relevant transactions cannot take place in the GST system.

Electronic invoicing software solutions like Invoicera make safety a top priority to protect sensitive information.

• Encryption: An e-invoicing platform uses encryption for invoices when sending them. This prevents unauthorized access and keeps data private.
• Access Controls: Access is controlled through authentication. Like passwords and multi-step verification.
• Compliance with Security Standards: E-invoicing solutions follow industry-standard security protocols. It helps to maintain a secure environment.

If you don’t issue an e-invoice when you must do so, you can encounter several problems:

• First, your invoice may not be accepted for GST purposes, which means you cannot claim an Input Tax Credit.
• Additionally, you could be charged penalties according to the GST law rules.

To avoid these issues, it’s necessary to ensure all invoices are properly issued and approved by the IRP on time. You should also have a proper process in place for creating and verifying e-invoices so there’s less chance of non-compliance.

E-invoicing can lead to huge cost savings for any business:

• Reduced Paper and Printing Costs: E-invoicing stamps out physical printing. It results in saved costs of paper, ink, and printing equipment.
• Lower Postage Costs: Electronic delivery completely kicks off paper-based invoices. This, in turn, reduces postage and related expenses.
• Decreased Administrative Expenses: Automation reduces manual processing. It leaves less burden on the administration and accounting persons. It reduces extra labor costs and related overheads.
• Quicker Payments and Improved Cash Flow: E-invoicing results in sending faster invoices. It makes it easier for the client to pay. And, earlier payments can improve your business cash flow.

The consequences of issuing an improper or non-compliant invoice under the GST Act are quite serious and costly.

• You may have to pay fines and interest for the tax amount that was evaded or under-declared.
• Non-compliance may also lead to additional legal proceedings or an investigation by the tax authorities.
• To avoid such penalties, ensure that all invoices are properly structured, contain the right information, and are validated by the IRP.
• Having a good record-keeping and documentation system is also an effective way to avoid risks of non-compliance.

E-invoicing applies to B2B and export transactions with a certain turnover threshold determined by the government. Initially, it was mandatory for organizations with a turnover of more than 500 crore INR, but gradually the required turnover limit has been decreasing. E-invoicing also includes supplies to SEZs (Special Economic Zones) and deemed exports. To know if your transactions fall under the requirement of e-invoicing, you should always stay updated with the current regulations. E-invoicing is also applicable to credit notes, debit notes, and other documents as allowed under GST laws.