To make invoicing easier, the GST council started implementing e-invoicing in a phased manner from January 2020. Apart from making the whole invoicing and GST returns filing process easier for businesses, e-invoicing also offers huge potential savings. Check out this post to know how.
It has been more than a year since the GST council introduced e-invoicing in January 2020. The move was in line with the government’s “Digital India” campaign for improving the online infrastructure of the country. From April 2021, e-invoicing has been made mandatory for every business with a turnover of above INR 50 crores.
Most of the businesses were quick to adopt the new invoicing standard of the GST council as it made the whole invoicing and GST returns filing process easier and faster. But apart from saving time and effort, another advantage of e-invoicing is its potential to offer significant savings. Check out how-
1. Improved Invoice Accuracy
With the new e-invoicing system, B2B transactions are electronically authenticated by GSTN. As soon as a business generates an invoice, it is uploaded to the GSTN portal for pre-validation and IRN (Invoice Reference Number) generation. As the entire process is now managed digitally, e-invoicing has improved the accuracy of the invoicing process.
Such errors can have substantial financial implications and result in delays for a business. Inaccurate invoices could also result in incorrect deduction of input taxes and additional tax payments being due. Correction of the invoice could also result in internal expenditure for the business.
2. Reduced Need for Verification
For most MSMEs, invoice authentication and verification are time and money-consuming processes.Many of them hire CAs and tax advisors to manage the invoice verification process. Some of them have also hired dedicated professionals solely for handling GST and invoicing-related tasks.
But with the invoicing process now being managed digitally, the need to hire experts for invoice verification has fallen drastically. Needless to say, hiring external help resulted in additional expenses for the businesses. By reducing the need to work with CAs and tax advisors, e-invoicing has helped organisations save more money.
3. Simplified Administration
Small business owners already have a lot on their plates. Invoicing was an additional burden that has been mostly eliminated by the introduction of e-invoicing. The time saved with the use of e-invoices could now be better spent on other important business functions. With more focus on day-to-day operations, owners can now dedicate more of their time towards taking their business to the next level.
Moreover, the use of accounting software also makes it easier for business owners to monitor their payments, enabling them to make improved forecasts about the cash flow of their business. Timely decisions can be taken to streamline the operations and ensure that the business always has positive working capital.
4. Updated Accounting Books
The software used for e-invoicing streamlines invoices directly into the accounting books. Many software solutions come with advanced features such as impact assessment, automated compliance, invoice cancellation/amendment, B2C QR code, reverse integration, and more for added convenience.
This again reduces the need for employing multiple accounting professionals to keep the books up to date and ensure compliance. Lower the number of people required for completing this task, higher will be the savings for your business.
Save More and Grow More with e-Invoicing
Several countries across the world have adopted e-invoicing due to the numerous benefits it offers. Now that the system is implemented in India, businesses should look for a reliable accounting software for managing e-invoices in the most efficient and hassle-free manner.
Advanced e-invoicing solutions come with a host of innovative features and integrate seamlessly into the existing IT infrastructure to deliver maximum benefits while ensuring minimal changes to the current processes.