How E-Invoice Will Change The Indian Accounting System
GST was introduced in India half a decade ago, and e-invoicing was implemented two years ago. Since then, a lot has changed. While GST replaced all indirect taxes and paved the way for a number of digital reforms, e-invoicing has revolutionized the way businesses conduct business online. Both reforms have been incredibly beneficial and have sparked a shift in how India conducts business. Let's understand how e-invoicing benefits businesses and the role of e-invoicing solution providers in this transition.
Understanding E-Invoicing
E-invoicing, also known as electronic invoicing, is a digital process wherein Business-to-Business (B2B) invoices are electronically submitted to a designated portal for verification by the Goods and Services Tax Network (GSTN). During this process, each e-invoice generates an Invoice Reference Number (IRN) and a distinct QR code for authentication purposes.
The Benefits of E-Invoicing
Saves Time: E-invoicing eliminates manual data entry and paperwork, making the invoicing process quicker.
Improved Accuracy: It reduces errors in accounting by minimizing manual data entry.
Cost-Effective: E-invoicing cuts down on expenses related to printing, storing, and transporting paper invoices.
Streamlined Financial Operations: Automation of tasks like invoice creation and data validation enhances efficiency in the finance department.
Data Security: E-invoicing systems are designed to keep financial data secure, reducing the risk of breaches.
Increased Productivity: Employees can focus on more valuable tasks as invoicing and data entry get automated.
Real-Time Tracking: Businesses can monitor invoice statuses in real-time, ensuring timely payments.
Benefits of E-Invoicing for Small Businesses
E-invoicing offers several advantages to Micro, Small, and Medium Enterprises (MSMEs).
Effortless Account Reconciliation: E-invoicing simplifies matching purchase and sales invoices, making account reconciliation easy.
Quick Access to Tax Credits: MSMEs can process tax credit claims faster, improving cash flow.
Reduced Compliance Burden: Compliance tasks become easier for MSMEs with e-invoicing.
Simplified Invoice Tracking: Tracking invoice statuses becomes simpler, helping manage cash flow.
Easier Loan Access: Accurate financial records, thanks to e-invoicing, make it easier for MSMEs to secure loans.
Preventing Fraud: E-invoicing enhances transparency, making it harder for fraudulent invoices to go unnoticed.
E-Invoicing with Ankpal
To make the most of e-invoicing, many businesses turn to solution providers like Ankpal. These providers offer software that seamlessly integrates with existing accounting systems. Ankpal provides a user-friendly platform simplifying the e-invoicing process, from creating invoices to GST compliance.
Embracing Digital Transformation
If there’s one thing in common that the deployment of GST and e-invoicing has is the digitization of processes. GST set the pace by bringing common tasks that were carried out offline, such as registration, return filing, etc., to now even carrying out assessments and entire refund procedures online.
e-Invoicing, as its name suggests, was brought in to digitize invoicing, the first step in record-keeping. Now, collectively, they have revolutionized invoicing, reconciliations, tax return filing, and the input tax credit claims processes. And it will only be a matter of time before e-invoicing will get extended to more businesses and more types of invoices in India.
The decision to digitize should now be made deliberately by Indian taxpayers. In order to find revenue leaks, the government took the initiative to introduce electronic invoicing and return filing. It also began utilizing data analytics and artificial intelligence (AI). Now is the moment for taxpayers to take similar action, but to prevent it.
Conclusion
E-invoicing is changing the face of accounting in India. Its advantages, such as time savings, increased accuracy, and reduced costs, are transforming how businesses manage their finances. For MSMEs, e-invoicing simplifies compliance, improves cash flow, and streamlines operations. With e-invoicing solution providers like Ankpal continuing to innovate, we can expect even greater efficiencies in the financial sector, ushering in a new era of accounting in India. Embracing e-invoicing isn't just adopting technology; it's a strategic step toward a more agile and competitive business environment.
