| Jul-11-2023

Critical Challenges for Chartered Accountants related to the new e-Invoicing System

The introduction of e-invoices was approved by GST council during its 37th meeting held in September 2019 with the key objective to ensure inter-operability of e-invoices across the GST ecosystem. Invoice being a key document and e-invoicing being a reform related to it, it is extremely important for businesses to understand it fully and prepare for it, accordingly. In the recent update, from 1st August 2023, e-Invoicing will be essential for all the registered persons whose aggregate turnover (based on PAN) in any prior fiscal year from 2017-18 onwards exceeds 5 crores. 

What is e-Invoicing? 

e-Invoice known as ‘Electronic invoicing’ is a system in which all B2B invoices are electronically uploaded and authenticated by the designated portal. 

Best e-Invoicing Software Solution for Businesses in India

Generate e-Invoice Instantly in TallyPrime

Post successful authentication, a unique Invoice Reference Number (IRN) is generated for each invoice by IRP. Along with IRN, each invoice is digitally signed and added with a QR code. This process is collectively called as e-invoicing under GST 

Know more on IRN, Format and process to generate it.

Challenges surrounding e-invoicing

While the government aimed at simplifying the invoice generation process by introducing e-invoicing for businesses, there seem to be some resistance from the B2B business owners. Let’s look at some of the challenges which will be faced by taxpayers on the implementation of the new provisions under e-invoicing: 

• Capturing real time data through an integrated ERP system  
  One of the primary challenges is capturing real-time data through an integrated ERP system. Invoice generation is a time-sensitive process, and with the implementation of e-invoicing, businesses need to seamlessly modify their existing invoice generation processes to comply with the new provisions. Chartered accountants can play a crucial role in helping businesses adapt their software or ERP systems to incorporate the required changes without disrupting their existing methods. 
• Sorting B2B and B2C invoices  
  Another challenge is distinguishing between B2B and B2C invoices. E-invoicing is applicable only to B2B transactions, while B2C invoices only require the generation of e-way bills. Sorting through a large volume of invoices to identify B2B transactions can be a time-consuming task. Chartered accountants can assist businesses in developing efficient systems and processes to filter and categorize invoices correctly, minimizing the effort involved. 
• Tracking of invoices  
  Tracking invoices is another area that presents challenges. While an offline tool is available for generating e-invoices, the manual process of generating JSON files, authenticating invoice data, and uploading it to the Invoice Registration Portal (IRP) can be cumbersome, especially for businesses dealing with high volumes of invoices. Chartered accountants can guide businesses in selecting appropriate software solutions that streamline the tracking of invoices, providing real-time status updates and ensuring compliance with the e-invoicing requirements. 
• Revised workflow to process relevant documents 
  Furthermore, the revised workflow for processing relevant documents adds complexity to the e-invoicing process. Separate workflows need to be created for delivery challans, bill of supply, job work, and similar transactions. This additional effort can be minimized with the assistance of chartered accountants who can provide insights on developing streamlined workflows and integrating them into existing business operations. 

While e-invoicing is a new concept under GST, and challenges and drawbacks may emerge during its full-fledged implementation, businesses can benefit from the expertise of chartered accountants. These professionals can help businesses make a smooth transition to the e-invoicing system by selecting suitable GST software, providing guidance on compliance, and assisting with crucial functions such as e-invoice generation, cancellation, bulk uploads, and data validation. 

In conclusion, chartered accountants play a vital role in helping businesses overcome the challenges associated with the implementation of e-invoicing. Their expertise can ensure that businesses efficiently adapt their processes, navigate the complexities of the new system, and maintain compliance with GST regulations. By leveraging the knowledge and guidance of chartered accountants, businesses can successfully transition to e-invoicing while minimizing disruptions and maximizing the benefits of this reform. 

Know more about e-invoices in GST 

e-invoicing Software	e-Invoice in GST
GST Invoice	How to Generate E-Invoice in GST
How to Transit to e-Invoice System	Invoice Reference Number (IRN)
Who Should Issue an e-Invoice in GST	Generate e-Invoice Instantly in TallyPrime
How to Generate Bulk e-Invoice in TallyPrime	Working of e-Invoice System