Choosing the Right e-Invoice Solution: 5 Key Factors to Consider

Yarab A |Updated on: August 4, 2023

Starting from August 1st, 2023, businesses with a turnover exceeding 5 Cr will have a requirement to generate e-invoices for all their business to business (B2B) and business to government (B2G) transactions.  

The introduction of e-invoicing establishes a new standard where businesses are obligated to upload their invoices to the invoice registration portal (IRP) for authentication, resulting in the issuance of an Invoice Reference Number (IRN) and a QR code. 

To comprehend the functioning of the e-invoice system and to learn how to generate e-invoices, it is essential to understand the necessary steps. With the implementation of e-invoicing, businesses must include a QR code containing the IRN on every B2B invoice before delivering it to the buyer.  

By selecting an appropriate e-invoicing software solution, compliant with the new regulations, businesses can seamlessly adapt to this system without the need for extensive changes to their current invoicing procedures. 

Today, businesses employ various accounting and business management software, as well as invoicing utilities, to create invoices. However, it is crucial for businesses to reassess whether their existing software or utilities possess the necessary technology.  

To assist in this evaluation process, we have compiled a list of five key factors to consider when assessing an e-invoice solution. 

5 Things to consider while choosing an e-invoice solution

1. Generate e-invoice instantly

In the realm of e-invoicing, the validity of an invoice relies on its authentication by the invoice registration portal (IRP) and the inclusion of a QR code embedded with an Invoice Reference Number (IRN).  

To accomplish this, there are several steps involved.  

• The e-invoice details need to be uploaded to the IRP in the specified format (JSON) 
• The authenticated output file (JSON) containing the IRN and QR code must be downloaded from the IRP 
• The QR code and IRN should be printed on the invoices before they are issued to the buyer 

The impact of these requirements on the invoicing process cannot be underestimated. However, a suitable e-invoicing solution can significantly simplify and streamline the process.  

Video on e-invoicing in TallyPrime

An ideal solution should have the capability to generate e-invoices instantly, eliminating the need for manual intervention. It should be able to seamlessly handle the complexities by directly transmitting the details in the prescribed format to the IRP, retrieving the authenticated information, and automatically printing the QR code, IRN, and other relevant details on the invoices.  

A business management software that integrates directly with the IRP portal can facilitate this seamless integration, ensuring that the invoicing process remains efficient and familiar. 

2. Generate and upload e-invoices in bulk

In certain business situations, you may require to generate bulk e-invoices instead of generating one by one. For example, some businesses follow the ‘Maker’ and ‘Checker’ system of invoicing in which invoices are generated by a "Maker" and later verified by a "Checker".

In such cases, it is crucial to have the capability to send multiple invoices at once to generate e-invoices. Furthermore, the software should possess the functionality to automatically retrieve the relevant QR codes and print them on the corresponding invoices. 

3. Generate e-way bill along with e-invoices

The e-invoice system (IRP) is designed to seamlessly integrate with the Goods and Services Tax Network (GSTN) and the e-way bill system. This integration has significant benefits as it enables automatic sharing of invoice details with the GSTN system for return purposes and with the e-way bill system for generating e-way bills.  

It is crucial for the e-invoice software to leverage this functionality and generate e-way bills simultaneously with e-invoices for those invoices that necessitate e-way bills. By doing so, valuable time and effort can be saved, streamlining the overall process. 

4. Cancel e-invoices effortlessly

In certain circumstances, there may be a need to cancel e-invoices for which an Invoice Reference Number (IRN) has already been generated. This could occur due to various reasons, such as duplicate entries, data entry errors, or order cancellations.  

The software should provide the capability to cancel these invoices and, importantly, automatically transmit the necessary information to the Invoice Registration Portal (IRP) for IRN cancellation.  

Additionally, if the cancellation of an IRN is initiated through the portal, the software should be able to retrieve and update the IRN status in the records. 

5. Flexibility to use other modes of e-invoice

In case of exigency cases like unavailability of internet services on a system or due to any other reason, if you wish to use other modes of e-invoicing such as offline utility, direct entry on the portal etc. the software should be flexible to allow this. Also, it should fetch the QR Code, IRN etc from the portal and update the books accordingly.

Takeaway 

E-invoicing is a critical aspect of modern businesses operating under the GST taxation system. Understanding the concept of e-invoicing is vital, but choosing the right e-invoice software can be a challenging task for businesses. 

By considering the factors discussed above, businesses can make informed decisions when choosing an e-invoice software solution that not only meets their compliance needs but also provides the necessary scalability and flexibility to support their growth and operational efficiency.

E-invoicing in GST: Additional Resources