As per the latest notification by the GST Council, all B2B businesses with 10crore+ turnover must implement E-invoicing in their day to day business process. Similarly, businesses with 5cr+ turnover will have to inculcate e-invoicing starting from 1st January 2023. Government is slowly making E-invoicing necessary for more and more businesses. This is mainly due to a rise in the number of cases of Tax evasion
E-invoicing is a win-win for both the government and businesses as it allows for simultaneous invoice verification and hence reduces the chances of wrong entries at the time of entry creation itself.
So what is E-invoicing?
E-invoicing is a process of generating an electronic invoice or an e-invoice. When your system is e-invoice complied, you create an invoice which is then sent to the IRP portal after which the invoice is verified, a unique Invoice registration number is allocated to the verified invoice. The invoice is then sent to the GST portal and finally the invoice is also sent to the E-way bill portal. This whole process may seem overwhelming at first but the process is completed simultaneously without making the accountant wait.
In case the invoice is eligible for E-way bill, the e-way bill is also generated at the same time. And thus the whole process of compliance is completed at the same time without much waiting.
E-invoicing may be seen as just a new mandate that slows down the whole accounting process as all accountants will have to learn how e-invoicing works, but there are many benefits of it that can simplify your accounting and return filing process. Here’s how -
Economical
E-invoicing is cost-efficient as it promotes digital invoicing and sharing. Both are energy as well as cost-saving as you do not have to print the invoices. Due to its instant verification, it saves costs that can be wasted in printing wrong and useless invoices.
One time invoice filing
While creating an e-Invoice, your accounting system ensures that the created e-invoice is sent to the GST portal. And since the e-invoice is being sent to the GSTN, you need not file your monthly GSTN. We know how complicated your monthly/quarterly return filing can get and thus this update will help businesses to improve it further.
Increased productivity
E-invoicing ensures you complete all statutory compliance requirements in one go.You can generate e-invoice, e-way bill and return file all simultaneously. It improves the productivity of the accountants by ensuring they complete all of their GST statutory requirements at the time of invoice creation itself.
Data security
Tally is known for the level of data security it provides. E-invoicing will further improve the data security by providing security against fake invoices. IRP or Invoice Registration Portal assigns a unique IRN (Invoice Registration Number) that is allocated only after successful verification of the invoice. Thus it ensures no fake e-invoice is being created.
Higher accuracy
Data accuracy is possible only when the entries are made without any human errors. This is difficult considering how common human errors are. Through the e-invoicing system, most errors can be rectified as the IRP portal verifies the invoice and creates an e-invoice only when the invoice is verified. Through e-invoicing, most businesses have benefited due to data accuracy.
Tracking
E-invoicing acts like a tracking system as all the transaction related data is saved and using tally you can analyse the data from time to time. Tally also provides amazing reports wherein you can check the complete details of the E-invoices made, cancelled, altered etc.
Simplified Process
Before E-invoicing, Tally users had to create invoices, then generate e-way bill as and when required. GST return filing had to be done from time to time. All of these processes had to be done separately which was both time consuming and complicated. With E-invoicing, all of these 3 processes are completed in one go thus ensuring you complete 3 different functions at a time. To conclude, E-invoicing has completely changed how the invoicing and return filing process works. It has benefited businesses in the long run and is continuously eliminating wastage in the whole process to have optimum output..
