The Evolution and Challenges of E-Invoicing in India: How vitwo ai Leads the Way

In 2018, the GSTN council introduced the Indian e-invoicing system to streamline financial processes, reduce errors, and increase business efficiency. This initiative aimed to bring more taxpayers under a modern financial regime, leveraging technology to enhance compliance and operational effectiveness.

However, finding complete e-invoicing management in one unified system is a near miss for businesses. That's where vitwo.ai comes in every business mind.

The Scope of E-Invoicing: B2B and B2G Transactions

E-invoicing is mandatory for Business-to-Business (B2B) and Business-to-Government (B2G) transactions, provided the government entity has a GSTIN. This regulatory shift has also caught the attention of countries like France, Singapore, and South Korea, which are exploring similar systems to modernise their financial landscapes.

Despite the regulatory push, businesses often struggle to find a comprehensive e-invoicing management solution that unifies every business process in one system. The need for expert guidance in system implementation, both in-person and via cloud-based solutions, is critical. This is where our dedicated experts step in, revolutionising how businesses manage and access their invoicing processes.

Complete Invoice Management: Transforming Accounts Payable

The system digitises and automates accounts payable processes, accelerating invoice processing workflows and ensuring compliance with domestic and international regulations.

This robust system manages invoice workflows, supports regulatory compliance, meets deadlines, and reduces data errors and associated costs. Enhanced visibility into payables allows timely vendor payments and the opportunity to leverage discounts, thereby cutting supplier management costs and simplifying accurate financial reporting.

5 Key Benefits of Unified Invoice Management

• Automated Workflows: Manage invoice processing and workflows, support compliance, and easily meet deadlines.

• Error Reduction: Reduce data errors and associated costs while improving visibility into payables.

• Vendor Rewards: Ensure timely payments to vendors, taking advantage of discounts and reducing supplier management costs.

• Financial Reporting: Simplify accurate financial reporting, with stakeholders able to query and access information for better decision-making.

• Automated Invoice Routing: Automatically route invoices for resolution, approval, and payment, with authorised users able to review and take action.

Addressing the E-Invoicing Challenges

As India enforces new tax reforms alongside the GST, businesses face an inevitable myriad of hiccups. To keep businesses on the profit side, vitwo ai's solutions are designed to mitigate these challenges effectively.

Understanding the Compliance Landscape

• Time for Understanding: The lack of a standardised method for generating e-invoices can cause initial confusion among taxpayers. Businesses need time to fully understand compliance implications based on discussions with their ERP, IT, finance, sales, logistics, procurement, supply chain, or legal teams.

• Business Operations Impact: Preparing for upcoming phases of e-invoicing requires businesses to evaluate the maximum impact touchpoints and make appropriate changes.

• Manual Data Entry: Currently, businesses manually enter invoice data into their ERP systems, which is time-consuming and error-prone.

• Purchase Invoices: There is no option to upload purchase transactions and reconcile them with the input tax credit (ITC), leading to potential ITC errors.

Data Validation and Training

• Data Sanitisation and Validation: Accurate validation and authentication of mandatory input field data are crucial to avoid disruptions.

• Internal Team Training: Businesses must train their employees to ensure clarity in generating e-invoices, while tax authorities also need training to address taxpayer queries.

Adapting to Changes & Scalability

• Invoice Schema Updates: Frequent changes to the invoice format can make previous work useless, so constant adjustments are necessary.

• Segregation of B2B and B2C Invoices: Automating the sorting of B2B and B2C invoices is essential to save time and reduce manual effort.

• Cancelling and Amending E-Invoices: The inability to modify or correct e-invoices requires businesses to cancel and reissue invoices, adding complexity.

Storage and Compliance Burden

• Storage of E-Invoice Data: E-invoice data remains on the IRP for only 24 hours, necessitating alternate archiving arrangements.

• Scalability Issues: Upload capacity for e-invoice generation is based on past invoice volume, which can negatively impact businesses during surges.

• Reconciliation Challenges: To avoid non-compliance, businesses must ensure reconciliations between e-invoices, GSTR-1, and e-way bills.

vitwo ai: Comprehensive Invoice Management Solution

vitwo ai’s complete invoice management system offers a suite of features tailored to meet the unique challenges of e-invoicing in India:

• Invoice Creation: Generate goods, proforma, and service invoices with ease.

• Domestic and International: Handle both domestic and international transactions.

• Reverse and Repost: Simplify the reversal and reposting of invoices.

• Functional Area Definition: Tag invoices to specific functional areas.

• Invoice Variants: Choose from multiple invoice templates.

• Salesperson Selection (KAM): Assign invoices to specific KAM personnel.

• Compliance: Ensure all invoices meet regulatory requirements.

• Reference Attachment: Attach relevant documents to invoices.

• Remarks Field: Add custom notes to invoices.

• Auto Currency Rate Converter: Automatically convert currency rates.

• GST Calculations: Automatically calculate GST, CGST, and IGST.

• Customer Contact Management: Select pre-registered customer contacts for invoice sharing.

• Invoice Details: Capture invoice date, time, and credit period.

• Lock Posting Period: Control user access to posting periods.

• Subscription-Based Invoicing: Manage recurring invoices.

• Print Invoice: Easily print invoices in the most accessible way.

• Integrated E-Invoicing & E-way billing: Our system seamlessly automates and generates e-way Bills and accelerates the invoicing process. By eliminating manual entries, we ensure precision and reduce errors in the system.
• Automated Communication: Stay connected effortlessly by sending real-time WhatsApp and email notifications every time you generate an invoice with our unified automated communication system.

• Invoice Status Tracking: Efficiently manage your invoices from creation to payment while monitoring View - Sent - Reversal status.

Conclusion

As India continues to adapt to new tax reforms and regulatory requirements, businesses must navigate the complexities of e-invoicing with precision and efficiency. vitwo.ai's innovative solutions provide the necessary tools and support to ensure compliance, reduce errors, and streamline financial operations.

With this system, businesses can confidently meet the demands of the evolving financial landscape and focus on their core operations.