How to Transition to E-Invoicing System?
To comply with the e-invoicing system, businesses must verify and validate their invoices through the government’s website. Businesses of all sizes currently use accounting or ERP software, while some rely on manual methods to generate invoices. The supplier provides the invoice details through GSTR-1, while buyers can access the posted invoices through GSTR-2A.
However, e-invoicing will alter how invoices are generated and reported. The IRP system will digitally validate B2B invoices using the e-invoice system. Every uploaded invoice must have the required data in JSON format and be validated by the IRP system before generating a unique IRN. The e-invoice also contains an IRN and QR code that can be used on other government portals like GSTN or the e-way bill portal.
What Does This Update Mean for Businesses?
As businesses move forward, they should prepare for the new invoicing method and take advantage of the benefits offered by the e-invoice system’s technology. Like any new system, e-invoicing requires businesses to be ready and transition smoothly.
How do I Switch Over to the E-Invoice System?
Knowing and comprehending the e-invoice system is the first step in preparing your company for it. You can find requirements and address gaps by having a basic understanding of how the e-invoice system functions. This necessitates teaching your team about the e-invoice-related changes to the invoice process.
Second, your accounting software will be crucial to the e-invoice system. E-invoicing is made easier with the help of accounting software or ERP that works in unison with the IRP system.
The following are the primary responsibilities of the accounting software:
E-invoice data generation
To comply with e-invoice requirements, upload invoice data in JSON format following the given schema. Your accounting software should be able to produce an e-invoice JSON based on the information entered according to e-invoice guidelines. It should support the e-invoice standard, including mandatory and optional fields, depending on your business needs.
Seamless integration with the IRP system
To validate your invoice and generate an IRN, you must upload it to the IRP portal using your accounting software. Your accounting software should be able to integrate with the IRP system and upload the e-invoice JSON without the need for additional manual work. This will not only save you time but also speed up the invoice processing.
Download and record the IRN
After generating an invoice, the e-invoice JSON is digitally signed and updated with the IRN number and QR code. The accounting software should be able to download the digitally signed JSON, which includes the IRN and other invoice information to be sent to your client.
Conclusion
Transitioning to an e-invoicing system requires careful planning and execution to ensure a smooth and successful transition. It involves selecting the right e-invoicing solution, preparing and training staff, and establishing communication with trading partners.
Despite the initial costs and efforts involved, the benefits of e-invoicing, such as increased efficiency, cost savings, and reduced errors, make it a worthwhile investment for businesses. As governments around the world continue to mandate e-invoicing, it is important for businesses to start planning their transition sooner rather than later.
