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How is early adoption of accounting software for e-invoicing beneficial for MSMEs?
How is early adoption of accounting software for e-invoicing beneficial for MSMEs?

January 10, 2022

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The introduction of digital accounting has been a major change in accountancy. The way accountants do their work has changed dramatically. Chartered accountants are now more responsive to their clients' needs. Accounting software allows consumers to access their financial accounts at any hour of the day. It also makes it easy to provide fast and error-free services. In addition, accounting software can adapt to businesses to reduce the hassle of managing accounting operations. It can also help them organize, strategize, provide direction and channelize financial and business processes.

There is a growing market for accounting software.

Many small, medium and large enterprises are looking to streamline their business operations to save money. As a result, accounting software, just like all other accounting operations such as inventory management and GST filing, is now the most important tool for e-invoicing.

E-invoicing, an electronic authentication method under the GST framework, is used to verify that businesses report B2B invoices. These invoices will be registered on GST Network (GSTN) and authenticated by businesses. E-invoicing is a tool that will allow businesses to track B2B transactions, standardize invoices, digitize the economy, and improve GST compliance. India's E-invoicing is already mandatory for businesses with a turnover exceeding Rs.500 crores annually. 

Small and medium-sized enterprises didn't have to worry about invoicing under the Goods and Services Tax. However, they are now eager to upgrade their information technology systems to comply with the new regulations and make it easier for their customers. These are the top reasons small and medium businesses should adopt accounting software for e-invoicing.

1. Enhanced accuracy

With the help of accounting software, electronic capturing invoices feeds data directly into a company's accounts payable system. There is no room for error. It makes the business more productive and saves time by reducing human error. E-invoicing allows MSMEs to process invoices quicker, thereby accelerating on-time payment. It improves supplier relationships.

2. Simplified administrative duties

Small and mid-sized business owners have a lot to do. Their hands are full, from tracking employee time to managing payroll. With the help of accounting software, you can streamline administrative tasks by using electronic invoicing.

3. Interoperability, fraud minimization

Accounting software allows the creation of e-invoices in a standardized format. It allows an invoice created by one software to be read and modified by other software. Interoperability is possible because of this. It will also reduce fraud by sharing real-time data with tax authorities.

4. Cash flow management

Businesses might not have the data to make fast and efficient decisions because email-based or traditional invoices take longer for their systems to see them. However, all future payments can be seen immediately by electronically processing invoices with accounting software. In addition, it allows managers and business owners to create more precise forecasts that they can use to avoid borrowing funds last minute.

5. Secure instant loans

The e-invoicing arrangement under goods and services tax (GST) would allow medium-sized businesses to get instant loans without attaching documentation. Banks can rate them based on these invoices. The compliance burden, which is the most difficult for MSMEs, will also be reduced. Because the GST system pre-computes the returns based on information from e-invoices, this would reduce the burden.

6. You save time and money

E-Invoices can be integrated into your accounting system immediately, which can help you save time and money in keeping your financial records up-to-date and orderly. For example, MSMEs can save customer information and invoice templates using accounting software through electronic invoicing. Then, with just a few clicks, it can automatically fill in the necessary information to ensure that your invoices are accurate every time. Electronic invoices or e-invoice will be the future of electronic billing.

Conclusion

E-invoicing has become a common practice, particularly in the MSMEs sector. As a result, MSMEs can take advantage of e-invoicing early on to reap the benefits and remain competitive in a highly competitive market.

 


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Advika Apte is a serial entrepreneur at Techimply, with the experience in technology driven field. She’s keen to share her knowledge on a few technology-related topics with readers that can assist any kind of business. Her passion for helping others keeps her motivated.

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