September 19, 2022

E-invoices Applicable for Business from 1st October 2022

E-invoicing’s importance has grown in the business industry since the GST council’s green signal. The concept of e-invoicing software came into being in September 2019. The key objective was to ensure the interoperability of e-invoices across the GST invoicing software. E-invoicing, a short form for electronic invoicing is an online invoicing software to generate B2B invoices. The supplier electronically uploads all the invoices, and Invoice Registration Portal (IRP) authenticates them with an Invoice Registration Number (IRN) and QR code. However, the IRN and QR code should be printed on the invoice before the supplier issues the invoice to the buyer.

It is necessary to understand the necessity and benefits of e-invoicing software. Presently, businesses with a turnover exceeding 20 crores can file e-invoices, but before, this was allowed to business owners having a turnover of more than 50 crores. However, from 1st October 2022, the fifth phase of e-invoicing software implementation will begin and applies to businesses with a turnover exceeding 10 crores. 

This article will explain the new limit reduction in the e-invoicing bill applicability by the business owners. 

Let’s dive right into the article.

Necessity of e-invoices, for businesses with turnover exceeding 10 crore

One of the major reasons for introducing e-invoicing software is to pre-populate the returns and reduce the reconciliation challenges. To understand this further, you must know that the standard online accounting software has one major loophole. For instance, the invoices generated by one online accounting software might not be readable in the other invoicing billing software. Therefore, to overcome this barrier, a universal GST accounting format has been designed to ensure data interoperability. This IRP system shares the invoice data of the GST accounting and e-way bill systems.  

The essential goal of e-invoicing software is to reduce errors and minimize the risks between buyers and sellers because e-invoicing software eliminates the ability to counterfeit GST invoices. Some of the important takeaways are: 

1. The e-invoicing software curbs tax invasion. 
2. It provides traceability and transparency. 
3. The GST accounting portal can continually check the legitimacy of the transactions. 

Also Read: Benefits of e invoicing software

Process of e-invoicing

The e-invoicing software requires you to generate the invoice data in a prescribed format. After formatting the invoice, you must upload it to IRP, which validates and authenticates the data with IRN and QR code. 

The steps are explained below: 

1. Firstly, generate the e-invoice in a prescribed format using the offline tool set by the portal or by using business management software. 
2. After that, login-in to the portal. 
3. Upload the e-invoice file to IRP. The system will send the required details directly to the IRP portal if the software integrates with IRP. 
4. Then the key elements of the invoice are validated by the IRP portal. After validation, the invoice data is authenticated with an IRN number and QR code. 
5. From thereon, you can download or receive the e-invoice file.

Read: Signs that your business needs a Billing Invoicing System

New limit reduction of e-invoice

Effective from 1st October 2022, every business owner with an annual turnover exceeding 10 crores has to electronically upload all B2B and B2G invoices to the portal. Earlier, this was applicable to those with a turnover exceeding twenty crores. Generate the e-invoice in the required format and upload it to the IRP portal. The IRP portal will authenticate the e-invoice data and return the file with IRN and QR code. If there is no IRN and QR code, the e-invoice will not be valid. E-invoicing is mandatory for every business as GST accounting software seamlessly generates an e-invoice. 

Benefits of e-invoices

E-invoicing software provides a lot of benefits and power to major industries. They save you time, money, and effort and provide transparency throughout the process. Some of the key benefits of e-invoicing software are below:

1. The GST accounting software tracks every moment of your taxes from sale to their end destination. 
2. The portal validates your data and saves you time to focus on another official task as well. 
3. With GST accounting software, you can create a professional and customized invoice format suitable for your business. 
4. The e-invoicing software will track any potential frauds and manipulations. 
5. The digital e-invoicing software has made India go green by decreasing the use of paper. 

Read: Make your life easier with OneStop Online Invoicing Software