The simplicity of business operation for MSMEs In October month the electronic invoicing system (e-invoicing) completed its one-year journey. Towards the micro, small and medium enterprises (MSMEs) business faces the rise and fall through this journey. The framework is tough to work on for the newly arrived people. E-invoicing has been executed by the Indian government so as to change the business ways to interact with the other businesses in a longer period.
Applicability of E-invoicing
Beneath e-invoicing, one could obtain the invoices through the unique Invoice Reference Numbers (IRN) and signed Quick Response (QR) codes from the GST Network (GSTN). Your GSTR-1 and respective buyers’ GSTR-2A/2B get auto-filled. From 1st April 2021 people who held a total yearly turnover of more than Rs 50 cr should generate e-invoices for their business to Business (B2B) and export sales, indeed it incorporates the medium companies under the amended outline of MSME.
Advantages of E-invocining
E-invoicing was executed to remove the issues in the GST information settlement and deduce the tax theft cases. One could enable to avail real ITC and the supply chain and get benefit from the automation of the tax return preparation. Moreover, the internal information between different software assists to combine the accounts liable to pay management to the invoicing framework in the company.
Even providing various benefits, the e-invoicing framework does not get rid of the issues specifically towards the medium companies. As per the condition, e-invoicing is the major part of business operation, if any issues occur in that then it might cause a business to suffer from hardships.
Interruptions in Everyday Functionality
Improving the errors in the e-invoices is such a difficult task upon which IRN is formerly generated because the same takes lots of time. Even small mistakes like value or reporting a wrong buyer GSTIN laid you towards hardship. You might forget the essential fields mentioned under the e-invoice policy like the six-digit compulsory HSN code for B2B invoices. You shall not able to improve these errors on that e-invoice however enabled to refuse it and then generate a newer invoice to report the GSTN.
Furthermore, you are not permitted to refuse the e-invoice if it poses an active e-way bill connected towards the same even it holds the errors. Indeed e-invoices shall not be refused post to 24 hours of its generation. One should use the credit notes for these concerns which point towards more documentation work. The procedure of the improvement of e-invoices is difficult because the rectification of the e-invoices does not be the choice provided to the assessee. The lower level comes under the medium enterprises sees that it is difficult to handle these refusals and amendments towards e-invoices. The same is because of the choice of Enterprise Resource Planning (ERP) solutions and indeed due to the lack of defined and tested procedures.
Errors in E-way Bill Linked E-invoices
E-way bill linked to the e-invoice renders that more frequently it expires the more it leads to the cancellation of the GST e-invoice and the generation of the newer ones, in which you do not prolong the validity. The weight of the conveyance and the distance covered decides the validity of the e-way bill. Most of the cases render that the validity of the e-way bills is lower with respect to the original need. One should prolong the validity of these e-way bills individually on the e-way bill portal.
Moreover, one should set apart the documents that need the e-way bill generation and is said to come under the difficult chores excluding any support from the technology and automation. These multiple chores could impact the productivity of the team in a negative way, inside a medium and small enterprise, imposing more data and loading a burden on the small number of resources through which the business operates.
Thorough Testing Required
Due to incorrect and lack of testing of the e-invoicing system the efficiency of the team is reduced towards various customers. We indeed revealed out that the quality of e-invoices faces issues from the loss of track in which no pre-defined tasks and access duties are authorized to the company. One is urged to engage distinct teams to plan and develop an effective e-invoicing system like finance, warehouse, and others.
Less Storage Capacity
Various medium and small companies want arrangements for storage. One gets influenced through the lack of storage facilities along with the servers for IRNs which is not supported through GSTN. The audit consists of analyzing the trail of e-invoices made in the fiscal year.
E-invoice Data Reconciliation
The e-invoice data auto-populated in the GSTR-1 should be settled within the books of accounts or the sales enrolled towards exact GSTR-1 filing. One is needed to arrange the B2B information from Business-to-Consumers (B2C) with time. If the person does not have an automated system and the solution for the issue then errors get emerged and lead to fines. From the pandemic of Covid-19, the medium enterprises get influenced negatively and are not able to pay for reasonable quality solutions to furnish their automated reconciliation requirements.
Uncontrollable Issues of MSMEs
MSMEs indeed get majorly affected because of server crashes the day-to-day operations of the enterprises get affected by such issues. There might be issues that occur if someone raises an e-invoice on invalid GSTINs. Towards refused clients GST registration there shall be no appropriate validations.
Towards the businesses, the government should furnish effective system support for smooth compliance. Rectification can be done in the e-invoicing system with more businesses approaching it in the coming time particularly small enterprises who do not use ERP or tax compliance solutions. Running a small business by following the e-invoicing one can again focus on the business in the market in a shorter period of time. People indeed function from remote places as invoice discounting, and digital lending will jump massively in India if e-invoicing is prolonged to MSMEs.
