Importance of Invoice Management

Time and again, we have emphasized and underlined that using the right kind of technology for tax related processes is going to become extremely important.Credit matching and reconciliation will be based on the invoices uploaded by tax payers. Businesses have to make sure that invoices are created in a format which obey the GST guidelines. Here, we will spell out the whys and hows of invoicing and its management.

Why is making bills important?

Over the years, businessmen have shifted from paper bills to e-bills but the framework remains the same. Fundamentally, bills are documents which notify a purchaser of the legal obligation to make payments against the receipt of a commodity or a service. An invoice is a proof, simply put. Another basic purpose is to keep record of the sale. Details like delivery and billing address, product details, payment receivable, etc. are printed on the bill.

Regardless of the size of the company, a bill still remains an important instrument in the trading world.

Why is invoice management essential?

Now that we have established that invoices exist for a reason apart from wasting paper, let’s understand why invoice management is important. A missing or non-existent invoice sets many affairs in motion. Firstly, no invoice means no record of the sale or purchase. Which in turn means, no supporting document for the accounting entry for the sale or purchase you made. When you have no proof of a transaction ever being made, the raiders in their khaki suits won’t be far away.

As we know, GST marks the beginning of a new era of taxation. Can you guess which document is going to play a pivotal role when you file returns? C’mon, it’s an easy one. Fine, I’ll tell you. Invoices! In the GST age, a bill supports the taxpayer’s claim for credit on input tax. It also helps to determine the GST liability of taxpayers. A summary of sales and purchase invoices has to be uploaded while filing the returns.

If you end up losing your invoices because of incompetent invoicing, what would you upload while filing returns?

Things to remember while buying an invoicing software:

1)    Keep up with technology – Gone are the days when you were compelled to install software which hogged 80% of your disk space. Cloud-based technology has been around for ages now. Opt for cloud based invoicing system and expand your boundaries. If you’re a CA looking into your client’s accounts, a cloud based system will allow you to continue your work on the go. You can provide access to as many people as you want. Upload invoices from any corner of the world, hassle free. Cloud-based technology allows multi-user functionality and role delegation.

2)    FOLLOW THE RULES – These shouty capitals are for the sole reason of imprinting these words on your brain cells. The government has announced that the invoices don’t have to be in a specific format but there are certain fields which HAVE to be there on the invoice. Make sure that the invoicing system you purchase follows those guidelines.

3)    Customization – Merchants who have multiple wares to sell should look into invoicing systems which are customizable. Fields like taxable value, discounts, price of the product often differ depending on the buyer. The software should be flexible enough to accommodate such changes. Also, you would obviously want your company's logo or watermark on the invoice. The government has no rules against it so you shouldn’t shy away from demanding these also.

4)      Number of Invoices – There are software which are available as packages, for example, Rs. 10,000 per month for 1500 invoices. The small traders who are certain that their daily transactions will be limited in number (say 500) don’t need to pay for the invoices they might never need.

Printing configuration, communication intimation and reminders via mail and/or SMS, templates crafted deliberately to be used with ease – these are other important features that must be available within your invoicing program.

Good thing that GST Edge’s Invoicing tool is equipped to take care of these multitudinous regulations and requirements.