In the last few years, technology has brought significant changes to how accounting is managed. Digital accounting has made considerable strides and simplified complex processes making them user-friendly, efficient and error-free. With invoicing too going digital, accounting has truly been transformed. Invoices help businesses track their sales and keep a record of their finances.
E-invoice is an electronic authentication technique under the GST framework. The GST Council of India has mainly approved the implementation of e-invoice by adopting Invoice Registration Portal (IRP) for reporting B2B invoices registered with the departmental portal. This in turn ensures that businesses timely report B2B invoices that are to be registered and authenticated on the GST Network portal or GSTN portal. Consequently, e-invoicing is helping with both – tracking B2B transactions and improving GST compliance.
Mechanism Involved in E-Invoicing
E-invoicing is a fast and convenient way to generate invoices online. It automates the whole process, thus eliminating the need for human intervention. The seller generates the invoice and delivers it straight to the buyer’s servers. From here onwards, the system of the buyer can use the invoice as required by the business to move towards approval and payment.
As businesses switch to remote working, they will need to rethink ways in which invoice management is currently handled. The conventional approach involves having an office-based team in charge of manually processing the incoming invoices – whether sent via email or post. However, this does not suit the purposes of a remote team, as each person is working from different locations. This is where e-invoice can play a role in making the transition to remote working smooth and its sustenance possible for businesses.
When a team is working remotely, accessing paper invoices becomes an issue. As there’s no office, documents are needed to be sent to team members individually. This results in a slow and drawn-out wieldy process that risks duplication and is cumbersome to track. As invoices are shuffled between multiple locations, errors are bound to occur. Also, the information is scattered across different spreadsheets, different emails and paper documents.
Re-keying data into the accounting system eats into the precious time of employees which can otherwise be spent on more important tasks. This can disrupt cash flow in business and result in frustrated clients and customers who are waiting for their payments.
As e-invoice is a computer-generated automated process, it eliminates the need for paperwork and makes it a lot easier for teams working remotely. This means that no longer teams have to maintain files of documents as there is a copy available online of the invoice which can be conveniently accessed by all team members alike. This makes information sharing faster, easier and more efficient.
E-invoices eliminate the need for a physical address where invoices must be sent and also do not require an email chain. This not only provides a faster way of working but also makes it easier to maintain a record of all invoices in one place. It also cuts company costs by removing human errors from formatting and processing as human intervention is no longer needed. As the whole process is consistent and more efficient, it also reduces the time spent on chasing payments or disputes that arise from missed payments because reminders can be set for the same.
The right digital tools make it possible to have an efficacious invoice management process in place for the finance team to access from wherever they are located. Cloud-based accounting software can help achieve this as it can automate the processing of incoming invoices. It automatically scans the invoices with the requisite information, converts it into a digital format and stores it virtually. And any business with a remote team working can instantaneously access the stored information.
"E-invoicing is being extensively used across the globe. Services and standards of accounting software are evolving continuously and improving further. Clearly, the benefits of e-invoicing for the purposes of managing remote teams outweigh the disadvantages. By shifting from a paper process, a business can smoothly and seamlessly transition to remote working while maximising productivity and performance," Rajesh Gupta, co-founder & CTO, BUSY Accounting Software, said.
The major benefits that accounting software provides are:
Allows Real-Time Checks: Automated alerts in real-time ensure that every person on the team knows exactly what is required. It avoids invoices being lost in the system and helps in maintaining performance.
Integrated reporting tools: Employees working from home can access all invoice-related information instantly by employing integrated reporting functions. Reports which otherwise take hours to be compiled using the traditional approach are now prepared in minutes.
Compliance safeguards: With better management, a remotely working team can also reduce risks posed by human errors or fraud. The automated checks can identify potential threats and issues such as mismatched company details or duplication of invoices.