What is E-Invoice and How It is Beneficial

By Admin | 11 Mar 2021

An electronic invoice or e-invoice is a document digitally produced and exchanged between suppliers and buyers and validated by the government. It promises enormous cost savings of up to 80% compared to the paper-based invoice. Further, it helps reduce entry errors, shortens processing time, and increase cash discounts. E-invoice is mandatory for all businesses now.

However, many of you do not know what e-invoicing is and what benefits it offers. Here we help answer your question.

What is E-Invoice?

E-invoice is the digital version of an invoice for goods and services by businesses usually generated on the government regulated IRP portal. It is a system where B2B invoices are digitally prepared in an e-invoice format and authenticated by GSTN. The system ensures that a common invoice format is followed by all the businesses making it easier for the GST system to understand and transmit data effectively.

Objective of E-Invoice

NThe objective to introduce an e-invoice is to address the expectations and concerns of all the stakeholders (private and government business entities) by leveraging the use of ITC (Input Tax Credit).

What are the Benefits of E-Invoice?

E-invoice allows companies to automate their invoicing processing and as a result buyers and suppliers gain various operational and strategic benefits.

Benefits for Buyers

Increased Productivity and Automation

With paper/PDF invoices, the documents need to be stored and re-entered into the AP system. These steps are time-consuming, and mistakes can occur. On the other hand, e-invoice data is sent directly from the supplier to the buyer’s AP system, eliminating data re-entry. This helps decrease the workload, freeing up the resources to focus on high-value activities.

Reduce Costs

It helps reduce costs by eliminating the need for paper or postal fees as well as eliminate errors and re-work. E-invoicing enables AP departments to automate validations and registration thus delivering substantial cost savings of 60% to 80%.

Improved Supplier Relationship

Fast and efficient payment method helps strengthen the relationship with suppliers. This translates into a more efficient and simplified supply chain and thus improves customer satisfaction.

Benefits for Suppliers

Faster Payments

E-invoicing eliminates delays resulting from mailing, routing, sorting, and re-entering paper documents. Customers can easily route invoices for fast processing and approval and as a result, invoices are paid on time, days sales outstanding (DSO) is reduced, and cash flow is improved.

Few Rejected Invoices

E-invoicing excludes the need to manually re-key the data, reducing data entry errors. As a result, the bills are less likely to be denied and customers can start processing them without interruptions.

Enhanced Account Reconciliation

Suppliers often face a challenge to reconcile the payments they receive from customers by checking the original invoices they submitted. With e-invoicing customers can send electronic remittance advice with the payment, providing a detailed accounting of invoices paid as well as debits, credits, and adjustments taken.

How Engear E-Invoice System Can Help?

Engear has integrated the e-invoice platform with the GST portal and can help you with the instant transmission of data from the customer base to the GST panel. With us, you have all your business-related data on one platform and payment is done in simple and easy steps.

for more information visit https://www.engear.io/invoice.php today.