Why Is Employee Awareness Crucial For The Implementation Of E-Invoicing?
Also, the employee has to generate an e-way bill for movement of goods If the invoice is generated for goods. Currently, the employee has to make sure that the ERP correctly creates files to generate an e-way bill.
The e-invoicing system which has been implemented from 1st October 2020 will change the invoicing process, way of filing GSTR-1 and the e-way bill generation process. The present invoicing system is perhaps simpler as the business generates invoices on their ERP and uses the same for reporting in GSTR-1 and generation of e-way bills, etc. However, the e-invoicing system will auto-populate data from Invoice Registration Portal (IRP) to GSTR-1 and the e-way bill system. The auto-population reduces the reporting burden for the business.
Under the present invoicing system, employees are involved in the task of creating an invoice in the ERP, authorisation of the invoice, generation of the invoice and forwarding it to the customers. However, the e-invoicing system adds additional tasks of uploading the data to Invoice Registration Portal (IRP) and getting it authorised before forwarding the invoice to the recipients.
Employees have so far mostly dealt with their own ERP to make sure that the invoice is generated as per their format. However, under the e-invoicing system, the employee should be aware of the e-invoice format notified by the government and the fields to be reported. They should double-check invoices on a random basis, to make sure that the ERP is capturing the fields required and they should be quick enough to resolve the errors, if any, that have occurred during the e-invoice generation process. They have to continue to do reconciliation at the time of GSTR-1 filing to ensure accurate reporting.
The invoice cancellation process will also see a significant change. If an invoice is to be cancelled under the present invoicing system, the employee can do it on their own ERP after obtaining authorisation from the management. Under the e-invoicing system, the IRP auto-populates data to GSTR-1 once the e-invoice is generated. Also, it is to be noted that the e-invoice can only be cancelled within 24 hours on IRP. There will be no issue if the e-invoice is cancelled within 24 hours as the IRP will remove the auto-populated data from GSTR-1. However, a certain complexity will arise if the e-invoice has to be cancelled after 24 hours as the employee has to rise a credit note to cancel an invoice. Again all the credit notes are to be reported to IRP for authorisation and should be reported in GSTR-1. It creates double work for an employee in case of cancellation of an invoice. Hence, proper care has to be taken while generating an e-invoice.
Also, the employee has to generate an e-way bill for movement of goods If the invoice is generated for goods. Currently, the employee has to make sure that the ERP correctly creates files to generate an e-way bill. The e-invoicing system will auto-populate data to Part-A of e-way bills and only Part-B, which contains transport details is to be taken care of by the employee.
The auto-population of data from IRP to e-way bill portal does not mean that the e-way bill is generated. The business has to manually provide transportation details to generate an e-way bill. In case the e-way bill is not generated within 24 hours from the time of generating e-invoice and the e-invoice gets cancelled on IRP, there is no point of generating an e-way bill. However, if the e-way bill is generated before the e-invoice cancellation or e-way bill is to be cancelled after 24 hours of e-invoice generation, the business has to follow existing provisions of e-way bill cancellation.
The existing provision states that an e-way bill can be cancelled within 24 hours by the supplier and the recipient can also reject it within 72 hours from the time of generation. There is no change so far to these provisions. However, the employee has to perform the reconciliation between books and the e-way bill portal on regular intervals to ensure that only required e-way bills are generated.
From the above, we can conclude that it is not just the change in the way the invoice is raised, several aspects of GST compliance are likely to change as well. Hence, employees are going to play a crucial role in e-invoicing implementation. Employees should be made aware of the changes to the ERPs and how they have to cope up with the changes.
The business should also focus on employee training as they are the executors of the e-invoicing system. The company should create SOP (Standard Operating Procedures), which explains the steps to be followed in the invoice generation process. The businesses should also conduct workshops to train on how to handle error scenarios. It would be good if the company created a single point of contact which can provide real-time solutions to employees.
The new e-invoicing system poses many challenges to the employees. Although there are different methods available for businesses to implement the e-invoicing system, the businesses can opt for GSP (GST Suvidha Provider) integration. The GSP adoption is easy and ensures the smooth implementation of the e-invoicing system when compared to other methods. The GSP also creates an employee-friendly environment as it will provide continuous support in the e-invoicing implementation.
(The article is authored by Archit Gupta, Founder and CEO, ClearTax)