How to Transition to E-Invoicing System?
Businesses will be required to confirm and authenticate the invoices by the government site with the implementation of the e-Invoice concept.
These days, all businesses—large or small—create invoices using different accounting or ERP software, and some even do so manually. This invoice information is provided in GSTR-1 by the supplier, and GSTR-2A gives the buyer access to the invoices that have been posted.
The way that invoices are currently generated and reported will change with e-invoicing. IRP must electronically validate B2B invoices according to e-Invoice. A unique number called an Invoice Registration Number (IRN) is generated for each invoice uploaded when the required e-invoice data in the prescribed format (JSON) is uploaded to the IRP system and validated. The e-invoice also has an IRN and a QR code for use by other government portals like GSTN or the E-Way Bill portal.
Two differences are visible if you carefully compare the contemporary and e-invoice systems. First, the invoice needs to be IRN authenticated. Second, depending on the information from the e-invoice, GST returns and the e-way bill will automatically record invoice details.
What does this update mean for businesses?
Businesses should plan ahead for a new way to issue invoices and use the technology to create an e-invoice system. E-invoices require organisations to be ready and smoothly transition just like any new system does.
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 internal teams about the e-invoice-related changes to the invoice process.
Second, your accounting software will be crucial to the e-invoice system. According to the new system, you must upload and authenticate the invoice with IRN. E-invoicing is made simpler by accounting software or ERP that works in unison with the IRP system.
The following are the primary responsibilities of the accounting software:
You must upload e-invoice data in JSON format in accordance with the given schema. From the invoice information entered in accordance with the e-invoice requirements, the accounting software should produce an e-invoice JSON in this case. The accounting software should be able to support the e-invoice standard, which has mandatory and optional fields, taking into consideration your business needs.
You must upload the invoice you just created using your accounting software to the IRP portal for it to be validated and generate an IRN. Here, the accounting software should be able to communicate with the IRP system and upload the e-invoice JSON without needing additional human work. This will not only free up your time but also speed up the processing of invoices.
Once you have generated an invoice, the e-invoice JSON will be digitally signed and updated with new parts like the IRN number and QR Code after passing through the IRP site. The digitally signed JSON should be downloadable by the accounting software, including the IRN and other information in the invoice you send to your client.
Businesses will be required to confirm and authenticate the invoices by the government site with the implementation of the e-invoice concept. With Busy accounting software, you can generate e-invoices.