The introduction of E-Invoicing in India for B2B transactions happened on October 2020. It is an electronically generated invoice specifically for the purpose of preventing tax evasion and helps follow a standard invoicing setup in India. E-invoicing helps the GST system in examining business transactions electronically and also attaches the same to the taxpayer’s GST returns file.
There are a couple of aspects as per the GST regulations that the e-invoicing system carries,
- Adopting a standard for invoicing all over the country, and creating an easier process for data transfer.
- The invoices need registration from the government through Invoice Registration Portal (IRP), to ensure authentication.
Generating an E-invoice
Businesses traveled a long way in terms of acquiring technologies and reducing human effort as much as possible. The usability of business software like GST compliant accounting software is growing massively over the years. It is in demand due to its ability to provide multiple accounting solutions for business houses. Since everything is gradually converting into its digital form, the GST accounting software also has its own digital form for invoices. E-invoicing, as mentioned earlier is an electronic version of invoicing that makes sharing of financial information easier and quicker. Here are the following steps needed to follow to generate an e-invoice for your transaction.
- Creating an invoice: The invoice is created through GST accounting software that provides automatic calculations of GST filing for every business transaction as per the e-invoicing format. However, it is necessary to clear the air that taxpayers are not under any compulsion to generate an e-invoice through the government tax portal. The taxpayer can create an invoice using any of his preferable GST-compliant accounting software provided that the invoice must abide by the e-invoicing format.
- IRN Generation: Next, although it is optional, the supplier needs to create a unique Invoice Reference Number (IRN) using the standardized hash-generation algorithm. If the IRN is not created, the IRP will create the same once the document is uploaded, which will be step number three.
- Uploading on IRP: The uploading of the invoice needs to be in a JSON file format which the GST-compliant accounting software creates. Going back to step two, if the IRN is generated, the document will then be uploaded on IRP along with the reference number, or it can be done without IRN which gets created later.
- Validating invoice information in IRP: Once all the documents are uploaded to the IRP, it's time for the validation process. It will validate the IRN if uploaded or create a new IRN and sent for verification for any duplication, under the central registry of GST.
- Generating digital signature and QR: After the verification, we move ahead to step number 5 where the uploaded JSON file will be updated with a digital signature and a QR code.
- Transferring e-invoice data to E-way bill and GST system: After the verification process, the document will then be shared with the GST system and the E-way bill. All these details will get updated in the GST annexure.
- E-invoice receipt in the supplier’s accounting system: From step one where GST-compliant accounting software created an invoice which will be raised as an e-invoice, to the last step in the process, where now the e-invoice has been created and will be sent to the supplier and the buyer respectively in their individual platforms.
Conclusion
So this is the overall step-by-step detailing of how to generate an e-invoice from a GST accounting software invoice. It is a well-chalked-out system to stop paying less tax and also makes the overall billing system easy to understand.
Before calling the curtain, one should make sure that their accounting software has not committed any crime in creating the appropriate invoice. The overall process starts from here and hence, the initial software-generated invoice must be appropriate. For this reason, it is essential for a business to look for GST-compliant accounting software that automates essential functions and provides smooth real-time tracking features. WrkPlan’s GST accounting software enables automation programs and a cloud storage facility that can make the data accessible to anybody. This way, before creating the final invoice, the overall entries can be rechecked and gets approved by the management head.
