An e-invoice is a standardised invoice that is delivered electronically. It typically involves a visual representation of the invoice date. E-Invoice is a system in which B2B invoicing is electronically entered by GST Network (GSTN) for using it on the common GST portal. The Invoice Registration Portal (IRP), managed by the GSTN, issues an identifying number against each invoice under the computerised invoicing system.
Why governments are adopting E-invoicing mandates
The primary reason for this increased number of e-invoicing standards is that the government is seeking a more thorough method for enforcing tax laws and collecting GST from businesses. The GST gap is the deficit between expected and earned revenues in a country, and it is a significant burden on economies around the world. Making e-invoicing mandatory is intended to avoid GST tax evasion. Another reason behind the adoption of the system is to make the process of invoicing hassle-free.
The benefits of E-invoicing for businesses
E-invoicing is both the present and the future of invoicing. There are numerous reasons why e-invoicing is preferable over emailing PDFs or traditional paper invoices. Listed below are the five main benefits of electronic invoicing.
- Reduction in processing costs
Printing, mailing and archival costs are significantly lesser with digital processing. Using an e-invoice instead of templates and emailing PDFs saves time at work and lets you focus on other significant tasks.
- Reduced risk of human error
Errors and inaccuracies are decreased by reducing manual input and boosting automation. When working with PDF or paper invoices, receivers must input the information manually into their systems for processing. Businesses gain from higher accounting accuracies when the data is in a digital format that computer systems can analyse.
- Enhanced security
E-invoicing is the safest way to transfer and receive invoices as it uses encrypted file transfer, digital signatures, and secure networking. You don't have to be concerned about invoices getting lost in the mail or ending in the spam box. E-invoices lower the risk of fraudulent bills from the buyer's viewpoint. The legitimacy of e-invoices is confirmed automatically.
- Strategic spend management
Strategic spend management requires extensive planning to manage the company's expenses, such as employee pay, operating costs, and E-invoicing. Choosing software that can help you implement best spend practices in your firm to ensure a steady cash inflow to support your outflow can be beneficial.
- Faster payment
Buyers receive benefits of e-invoices immediately, resulting in faster processing times. As a result, businesses should expect to receive payments more quickly. Using E-invoice allows you to pay digitally, which saves time and energy.
The challenges of implementing E-invoicing in businesses
Regulatory concerns caused by developing rules are one of the most significant challenges businesses encounter. The pandemic has forced governments to shift deadlines. Businesses are being affected by constantly changing compliance standards, making it tough to keep up with the e-invoicing trend.
Get your business ready for E-invoicing with Ankpal.
ANKPAL is a specialised method of managing an organisation's accounts. It is cloud-based accounting software that allows you to view your accounts from anywhere, at any time, with speed and security. It is an online GST accounting software that helps you file E-invoices easily.
The Government of India has mandated e-invoicing extended to those with an annual cumulative turnover exceeding Rs.20 Cr starting from 1st April 2022. Non-generation of an e-invoice is a violation that is punishable by law. It is subject to a fine of up to Rs.10,000 per invoice. In addition, inaccurate invoicing might result in an Rs.25,000 penalty for each invoice. Ankpal is a GST billing software for small businesses that aims to provide you with hassle-free E-invoicing services.