The exchange of documents between a buyer and a supplier in a consolidated electronic format is electronic invoicing. In the past, invoicing was carried out manually on papers and was subject to a lot of errors. Electronic invoicing is electronically received, processed and transmitted. As a consequence, processing life cycles for companies and cost increase.

A supplier must send an E-invoice in a presentation that can be simply integrated into the account payable system of the buyer. There must not be a requirement of any input of information from the account payable administrator of the buyer.

Specific benefits of electronic invoicing to businesses are as follows:

• It helps in eliminating errors by solving and covering the gap in the restoration of data.
• This system ensures the availability of authentic input tax credit at a rapid pace.
• It enables tracking of invoices made ready by the suppliers in actual time.
• It ensures a low possibility of audits by the legal bodies as the data needed is made available at a transaction level.
• It helps in eradicating errors entering the data as the electronic invoice, which is created on one software can be easily interpreted by another.

E-invoicing in India

E-invoicing is a usual B2B practice. For many years, it also has significant involvement in Electronic Data Interchange transactions in various companies, and the government of India introduced this from January 1, 2020, on a trial and voluntary basis. It was expected that for all B2B billing by organizations having turnover higher than 100 crores, an electronic invoice would be obligatory. According to the GST system, all the non-compliant entities may no longer receive ITC (input tax credit) after that date.

However, the dates have been changed to October 1, 2020, for organizations having turnover more than 500 crores. Electronic authentication by GSTN of business to business (B2B) invoices is referred to as electronic invoicing. An identification number is issued under this electric invoicing system against each invoice by IRP (Invoice Registration Portal). Businesses, these days, generate invoices making use of different software.

It is necessary to submit the invoice in JSON format per the standard scheme specified by the government of India.

There are certain invoices which are not actual invoices irrespective of being electronic. These are as follows:

• Invoice generated in Word formats or PDF
• Paper invoices’ software images transferred through email or other platforms

Various stages associated with the creation of E-invoice are as follows:

• An enterprise must make use of the ERP system, which is configured differently in accordance with the PEPPOP standard. The organization must cooperate with the provider of software service for incorporating the norms set for electronic invoicing.
• There are two prime options available for an enterprise for IRN creation. One is whitelisting the IP address of the computer system on the electronic invoice portal for a direct API integration through GSP, and the other one is downloading bulk generation tools for uploading of massive invoices. This will result in the creation of a JSON file which can be uploaded on the electronic invoice portal for generating of IRNs in bulk.
• A typical invoice must be generated on that software by an organization comprising of all the significant information such as tax amount, transaction value, billing name and address, GSTN of the supplier, product rate, and so on.
• An invoice is raised on the desired billing software after selection of the particular option. After making use of the JSON file onto the IRP all the necessary details of the invoice, including the obligatory fields, must be uploaded.
• IRP is considered as a central registrar for authentication and electronic invoicing which monitors the replication and accuracy of the main details and raises an invoice reference number of the B2B invoice.
• The IRP generates IRN, and it creates a QR code in output JSON for the supplier and signs the invoice digitally. The seller gets informed through email of the electronic invoice generated.
• IRP sends an authentication payload for GST returns to GST portal. If applicable, the information can be transferred to the e-way bill portal. For the desired tax period the GSTR-1 gets filled automatically, and tax liability is regulated in turn.

The electronic invoicing system makes it obligatory for all organizations to report invoices on IRP in electronic format.

Note:

An enterprise cannot partly scrap an electronic invoice. However, they have to fully cancel the invoice. It is vital to report into the IRP in 24 hours. No cancellation is carried out after that. Thus, the user has to manually cancel before the returns are filed on the GST portal.

Vital documents that need to be reported into the IPR are as follows:

• Invoices by the supplying organization
• Debit notes by the receiving organization
• Document notified under GST law by the creator of that document
• Credit notes by the supplying organization

E-invoicing Process in India 

• Accounting system or EPR is useful for most of the firms for invoice generation. A connector is required additionally to pick up the invoices generated in the EPR and for submitting these for signing and registration to the IRP (Internet Registration Portal).
• IRP monitors the accuracy and duplication. IRP will then assign a specific (IRN) invoice reference number for every invoice. It further generates a QR code which can be easily read by a machine to gather the desired information within the invoice.
• The IRP then sends the signed electronic invoice to the e-way bill system, GST portal and the originator of the invoice.

An electronic invoice must follow all the GST invoicing rules. It must also adhere to the invoicing policies or system of each Indian sector or industry. There are specific details which are obligatory while some of the details are optional according to the legal bodies. Many fields are optional, and users can fill only the necessary fields. A description for each field is made available for the users along with a sample input.