Impact of E-Invoicing on SMEs - Logitax

Impact of E-Invoicing on SMEs

Impact of e-Invoicing on Small & Medium Enterprises

As the majority of the businesses are now falling under the ambit of e-invoicing under GST, E-Invoicing has now been aware to all the businesses. All the businesses are eligible for E-Invoicing now whose aggregate turnover falls above INR 50 Cr. Annually, w.e.f. 1st of April, 2021. The Government plan seems to bring maximum businesses under e-Invoicing. The government may announce to bring the 50 Cr. eligibility down to 5-10 Cr. The e-Invoicing eligible taxpayers have increased manifolds and made this a hot topic. Here is the Impact of E-Invoicing on SMEs.

E-Invoicing in Indian Markets

The introduction of e-Invoicing has been very well received by the taxpayers. A fast & advanced integration between the ERP software used by the taxpayers and the Invoice Registration Portal (IRP) has paved the way for e-Invoicing. An Automated invoicing process has helped the Integration of e-Invoicing with the IRP platform, E-Way Bill portal, and GSTN. As the businesses are still not completely familiar with the rules of e-Invoicing which is going to impact a large group of businesses. Practices like tax evasion could be better tackled under e-Invoicing under GST. There are still a lot of businesses that aren’t ready for this change.

How is e-Invoicing affecting Mid-market Companies?

GST e-Invoicing has forced small and medium businesses to get a strong IT infrastructure in place for their invoicing requirements. Some costs & other aspects involved which the medium & small businesses are apprehensive about. Kindly find the major impact points where e-Invoicing can dent the Small & Medium Market Companies in India.

1. IT Infrastructure availability

  • e-Invoicing is the key between the taxpayer and the government portal such as e-Way Bill portal, IRP, and the GSTN.
  • Strong & updated software is necessary for the successful integration of these two entities & this may have an impact on the business owner as this has involved cost.
  • Small & Medium market companies are very careful about the expenditure of their funds as software tasks could be done manually as well.
  • Updated IT infrastructure is the key for error-free & timely production of the e-Invoices.
  • Strong & updated Software for their e-Invoicing processes may not be a priority for many mid-market companies.

2. Relaxed Approach of the Taxpayers

  • The taxpayers were used to reposting the transactions to the government by the end of the month before e-invoicing was introduced.
  • The taxpayers have a relaxed time frame between the transactions and the reporting of the same to the government.
  • With the introduction of e-Invoicing under the GST ambit, the taxpayers are now compelled to do the real-time reporting.  Reporting transactions to the government has been made compulsory with the introduction of e-Invoicing under the GST domain.
  • Delay in this reporting of the voluminous number of invoices generated every month. Delay in the reporting of the transactions can be a challenge before the small & medium scaled businesses.
  • Using the automated e-Invoicing facility, many mid-market companies are reluctant to do it.
  • Mid-market companies are facing challenges to adjust to this facility due to the lack of appropriate automated tools in place and the time-bounded e-invoice generation.

Companies like LogiTax are proving to be a great help in such a scenario. The fast and accurate software provided by LogiTax helps business owners to reduce the negative impact of e-invoicing on small and medium scale businesses.

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