The government announced that the e-invoice system will be made mandatory for all companies in India. This could impact every aspect of your business from tcs under gst to handling basic invoicing. So let’s take a quick view at some of the pros and cons of e-invoicing system under GST:
What is e-invoicing?
An e-invoice is an electronic document that shows all the details of a transaction between a buyer and seller. The system allows you to track invoices easily and quickly. It also helps you to comply with tax laws in India. The GST council has finalised a new format for filing GSTR-1 and GSTR-3B under GST. The new format of GSTR-3B and GSTR-1 will be in the form of an invoice. This means that all businesses need to provide invoices in the electronic form to their customers and suppliers.
Why does the government want businesses to go digital?
Tracking invoices is not only important for compliance purposes but also taxation purposes. When you send an invoice digitally, it makes your business more transparent, which means it’s easier for the government to keep track of your finances.
How will this benefit me or make things difficult as a business owner?
An e-invoicing system ensures that businesses can track the status of their invoices and ensure that they are paid on time. This is a critical feature for businesses that often have to wait months before they see a return on their investment. With an e-invoicing system, businesses can track the status of invoices and ensure that they are paid on time. A complete paperless workflow means that you can get paid faster than ever before!
Real-time tracking of invoices that have been made by a supplier means that you will never have to wait for your money again!
It reduces manual work that was earlier involved in processing invoices. Now all invoices can be processed through a computerized system which reduces errors and increases efficiency. In addition, there will be no need for paper-based documents as everything can be done through electronic means.
The e-invoicing system will reduce the time spent on preparing invoices, collating invoices from multiple parties and ensuring that they are properly endorsed and sent out on time to avoid late payment penalties or interest payments on late payments etc., thus saving time for businesses. Additionally it also helps you automate that you get an alert whenever you cross e invoice turnover limit or other such limits.
There is no need to scan documents and send them via email or post them as they are available online and can be accessed anytime
It also helps in reducing the chances of fraud as the tax authorities will have real-time data hence it will be difficult for the perpetrators to commit fraud.