Some Common Myths About E-Invoicing
Quick Summary
- Einvoicing is popular but has many myths, like needing to send invoices via the GST website, which is false.
- Businesses do not need expensive software for einvoicing, as free tools are available for small taxpayers.
- Some believe generating Invoice Reference Numbers (IRN) is slow, but it actually takes less than a millisecond.
- There is a myth that einvoicing increases GST compliance, but it actually reduces it by automating some processes.
- Einvoicing uses a single format with required and optional fields, not multiple forms for different businesses.
E-invoicing has progressively gained significant popularity as an efficient and cost-effective way of managing financial transactions. It has become a preferred choice across companies of all sizes. However, with this rise in popularity, several myths and misconceptions about e-invoicing have also emerged. Let’s examine some of these myths and separate the facts from the fiction.
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Myths and Facts about E-Invoicing
A few common misconceptions about e-invoicing and some facts about e-invoicing for GST are addressed here.
- Myth:I would have to send invoices via the GST website.
Fact:No. You would keep issuing invoices in the same manner that you have been. You only need to use your billing software’s ERP or accounting software to produce the Invoice Reference Number (IRN) for each invoice you send. - Myth:Without billing software or an ERP, e-invoices cannot be generated.
Fact:GSTN will offer free billing software to registered taxpayers with annual revenue under Rs 1.5 crore. - Myth:My business would be impacted if the production of IRN took longer than a few minutes.
Fact:More than one Invoice Registration Portal (IRP) will be operational, and the IRP will assign the IRN in less than a millisecond. - Myth:ERP or billing software will need to undergo significant adjustments.
Fact:There won’t be a need for substantial modifications on the taxpayers’ end. The ERP or billing software will need to make some upgrades and changes. - Myth:IRN, which will be an invoice number
Fact:The billing or ERP system will determine the invoice number. IRN will serve as a citation number. - Myth:GST compliance will increase with e-invoicing.
Fact:Rather, E-invoices and their reporting will result in lower compliance. When you report to GST, ANX-1, or ANX-2, an E-way Bill will automatically be created if needed. - Myth:There will be multiple invoice forms accessible for various firms.
Fact:There will be just one type of format. There will be necessary fields and optional fields. Depending on the type of business, these fields may be filled in. - Myth:I cannot issue an electronic invoice if I do not use billing, ERP, or accounting software.
Fact:8 free accounting and billing tools have been made available by the GSTN to taxpayers with up to 1.5 crores in annual revenue. These can be used to generate electronic invoices.
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Conclusion
The digitalisation of invoicing has brought about several misconceptions about e-invoicing. By debunking these myths, businesses can better understand the benefits of e-invoicing and leverage its full potential. Ultimately, e-invoicing can streamline invoicing processes, improve cash flow, reduce errors, and help businesses become more efficient and competitive in today’s digital landscape.
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