Advantages of E-invoicing in the post-COVID-19 world
Governments have ordered e-invoicing across the world mainly to avoid tax evasion. According to the recent updates, E-invoicing has been introduced for the smaller companies with a turnover of Rs. 50 crores onwards through GST notification 05/2021-central tax, dated, 8th of March, 2021. With the unforeseeable pandemic circumstances, countries worldwide have felt the need and significance of paperless transactions, and India is such an exception to that. Generally, it was understood that going digital is the way to fast-track growth and success. Before going into that, it is crucial to get the GST registration done for the business.
And hence there is no more significant opportunity than this inception of the e-invoicing mandate. A proper e-invoicing execution keeping in mind the role an invoice plays in any business transaction can prove beneficial in the long term.
Here are some of the advantages of e-invoicing in the post-pandemic world.
It would diminish the tax fraud rate and leakages
Tax frauds and leakages using fake invoices have been a concern that the government is trying to cope with even before the pre-GST era. In India, it has been introduced to stop this by ordering authorization of all invoices from the government portal. Real-time invoice reporting demoralizes subsequent fraudulent adjustments/changes. E-invoicing would result in a proper mechanism to cope with tax fraud nationally, leading to lesser tax frauds shortly.
Also Read: Beginner’s guide for understanding the basics of Income Tax
For individual taxpayers and companies, IRIS peridot is a mobile app that would help you verify GST information and submit the history of any GSTIN along with verifying QR code on an E-invoice or an E-way bill.
Saving both time and money
It has brought a revolution in the billing system. With the invoice going paperless, there is no more requirement for human interaction in verifying, checking, tallying and matching and so forth. Hence, the process of matching and verifying the invoices has not only become smooth and silky but also has sped up. The advancement of technology and its deployment would further save both money and time, which would lead to a faster transaction with minimal errors betwixt buyers and sellers. There would be less paperwork to do with increased transparency.
Advantages for the MSMEs in e-invoicing
MSMEs that have been mandated for e-invoicing would highly benefit them. Generally, small and medium-sized companies are juggling betwixt various business aspects, and a proper billing and administrative system is a dream far-fetched, which leads to chaos. With the advent of e-invoicing, streamlining the administrative can become efficient with the help of reliable e-invoicing software such as IRIS Onyx. It is a system which integrates billing system in various ways and generates IRN without disruptions.
Advantages for the taxpayers
Along with reducing the tax leakages, the implementation of e-invoicing under the GST would be beneficial for the taxpayer.
– One-time reporting of the invoicing details for all the GST submissions.
– Seamless generation of E-way bills with part A and B slip.
– Real-time tracking of invoices made by the suppliers.
– Standard invoicing system means interoperability betwixt various software.
– Precise and easy ITC claim.
– Minimal invoice mismatch during the reconciliation.
E-invoicing and E-way bills
Generating the E-way bills is now linked with E-invoicing. IRP can be used to create not only IRN but also E-way bills for qualifiable documents. Hence, relying on the date sent, the IRP system returns IRN or E-way bill number or both. If the taxpayers send transportation details and invoice details, IRP communicates with the E-way bill portal in real-time and creates an e-way bill.
GST data-based lending
E-invoicing under the GST would assist in securing instant loans without much documentation. It would help MSMEs as banks rate them as per their e-invoices and GST data which would be readily available in the public eye.
Also Read: All about GST and Tax Credit for Online Sellers
GST data-based lending offers a realistic view of business operations and, thus, better projection of the business’s creditworthiness. GST data-based lending can be transformational
if used correctly. It is also the safer option.
Enhanced transparency with reduced human error
It would increase transparency and reduce human errors. With e-invoicing, the information would directly be populated in the billing system, and all the data would be maintained safely hence minimizing the errors. The date would also be registered with the government, and specific parts would be made available to the public, so transparency is one significant benefit here. Companies would not have to go back and forth with their vendors and suppliers as correcting and re-sending invoices through emails would be stopped resulting in a smooth flow.
Many people have been embracing e-invoicing globally. It becomes pertinent for companies to adopt the right technology solution to get the benefits of e-invoicing and stay on the top of the game in the competitive world.
Bhavika Rathi has completed Masters in Commerce, is pursuing Company Secretary and is associated with Legalwiz.in as Intern working with Operational Executive of the company. She is handling various MCA related compliance and doing Trademark Registration.