Suppliers selling taxable goods and products are often overwhelmed by the taxation system. They need to determine the right pricing for their goods so that their customers won’t be burdened after paying the tax along with the unit price. The introduction of the GST Act in India eliminated a lot of confusion surrounding the tax system. Now, business owners only need to add one type of tax – GST to their bill. This can be IGST, CGST, or SGST based on the type of goods and place of supply. Accurate tax invoice printing is vital for taxpayers to collect the correct payment amount.
In this blog, you will learn the importance of accurate invoicing and the best method to print invoices.
Importance of Accurate Invoicing
Correct invoicing is essential for running a GST-compliant business. Accuracy and timely submission of invoices is important for business owners. When you make mistakes with the invoice, you will get paid late for your goods or services, or you may not get paid at all. If there are errors with respect to tax, you will end up with tax liabilities. In these scenarios, your business cash flow will be affected.
Erroneous invoices will also affect your business reputation. Your customers will not be happy with incorrect entries in their invoices. Repeatedly making mistakes in the invoices will affect brand credibility. From a taxation perspective, if you submit incorrect invoices, the authorities may suspect fraud. It could trigger audits, which will put your financial department under pressure.
Being diligent about invoicing will save you a lot of hassle. Sending accurate invoices will increase your chances of getting paid. Your customers will use these invoices to claim Input Tax Credit (ITC). You can foster strong business relationships with your customers with timely and precise invoices.
How to Avoid Errors in Tax Invoice Printing?
Generating accurate invoices is the first step to accurate tax invoice printing. Even though businesses adopt digitisation, you must print invoices for your business operations. When you deliver goods to your suppliers, you must attach an invoice. If you use transporters to deliver goods to your customers, you must print invoices and e-way bills.
Export businesses may have to print multiple copies of invoices for each step of customs clearance. Depending on your situation, printing different bills is necessary. Understanding the different types of mistakes in printing invoices will help you stay clear of them.
Not Printing Essential Invoices
When you deal with the supply of large volumes of goods or high-value goods, you must print multiple invoices. Affixing the correct invoices to the suitable packages is essential. You might not print certain invoices, and you may not even realise that they are missing. As per GST rules, you must issue an invoice at the time of supply or at the time of removal of goods from the warehouse for goods. You have 30 days to issue an invoice for services.
When you make multiple deliveries to the same customer, you must deal with different invoices with different details. Invoicing a customer several times is expected in the B2B landscape. Without a standard template and format, your invoices can be confusing. You may understand your invoice perfectly, but your customer may not comprehend it.
One of the most common mistakes with invoicing is missing data. For GST invoices, some of the mandatory fields must be filled without errors. Otherwise, the invoice may be considered invalid. Accurate invoice printing is possible only if you enter all the details correctly in the invoice. Instead of printing invoices and then filling in the details by hand, you can use an automated billing tool and print the filed-in invoice to avoid missing crucial details.
Another mistake that is common during invoicing is computational errors. Mistakes in calculating the total amount are very common if you don’t have a standardised pricing system. Mistakes in GST calculations are also common. Simply entering the wrong GST rate will result in an erroneous invoice. These can affect your payments and tax liabilities.
Wrong or Missing Invoice Details
Businesses must print the correct details in their GST invoices. Missing details or wrong details will result in incorrect invoices. For example, when you enter the wrong GSTIN of the supplier or recipient, the invoice will be rejected and considered invalid. Wrong details will not just affect the business of the supplier. Your recipient will use the invoice to calculate their ITC and offset their GST liabilities. So, mistakes in GST invoices will result in cascading errors.
To avoid errors in tax invoice printing, you must generate accurate invoices. Even though the GST Act allows handwritten invoices, it is best to use a billing tool to generate and print invoices.
Importance of GST Tax Invoice Printing Accuracy
GST-registered taxpayers must pay utmost attention to issuing and printing invoices. It is one of the critical aspects of the GST Act. GST compliance can only be ensured with accurate invoices and bills. Also, these invoices are essential to ensure the timely delivery of goods to your customers. When road authorities inspect the goods in transit, they check them against the invoices and e-way bills. Even a small mistake in the printed invoice can result in authorities seizing and holding goods until further clarification. Some of the reasons why it is necessary to print accurate invoices are:
- Ensure GST Compliance – Accurate GST bills and invoices will streamline your GST compliance process. When invoices are double-checked for accuracy, you can upload them to the GST portal without any worries. You can pay the exact taxes and rest assured knowing that your GST reports are up-to-date.
- Improve Cash Flow – Customers will pay the right amount if you issue the correct invoice. It saves time and effort because your invoice will match their purchase order. Invoicing accuracy improves cash flow for the business.
- Improve Brand Image and Reputation – Printing standardised invoice templates will enhance brand image, reputation, and recognition. When you follow the prescribed schema, you can also ensure you will never miss essential and mandatory details.
- Simplified Audits – Maintaining a standard invoice format for digital viewing and printing will simplify audit processing. The tax authorities can quickly check for essential details to ensure GST compliance with the invoices printed correctly.
Tax Invoice Printing Accuracy Checklist
If your business meets the e-invoice mandate requirements, then the e-invoice is the only valid tax invoice. You may generate a GST tax invoice in your accounting software. However, if your business turnover exceeds Rs. 5 crore, you must generate an e-invoice.
For your tax invoice, you can generate an e-invoice using the e-invoicing IRP portal. This portal generates an IRN for the invoice you upload. After verification and validation, a QR code will be generated for your invoice.
Your e-invoice, along with the QR code, must be printed to be considered turnover. Following is the checklist for accurately printing tax invoices:
- Verify if your business meets the e-invoice mandate
- Generate tax invoices using your accounting tool
- Login to the e-invoicing portal
- Upload invoice details in the IRP system
- Generate IRN and QR codes using the IRP system
- Print tax invoice with QR code
You can always customise your e-invoice and change the position of the QR code in the invoice based on your business requirements. You must use an automated GST billing tool for this purpose. Many tools with e-invoicing support will allow you to print your invoice directly from the tool.
Tax Invoice Printing Accuracy Best Practices
For e-invoices, you must print the QR code on the invoice. It is not necessary to print the QR code on all the pages of the invoice. However, each invoice has a unique QR code that must be printed properly for verification. Following are some of the best practices for ensuring accuracy in invoice printing.
- Verify all the mandatory details and generate IRN with QR code
- Upload the generated e-invoice to the business billing tool
- Use a GST billing tool to customise the invoice template to include the company logo
- Verify all the details are correct in the invoice
- Ensure that QR code is at least 3 x 3 inches or 290 x 290 pixels
- Keep a white colour padding of at least 1 inch around the QR code
- The ideal position for the invoice is at the top right corner of the invoice
- Ensure a high contrast for the background and QR code
The QR code printed on the invoice must be visible and readable. The GSTN has recently launched an e-invoice QR code verifier app that can be used to verify an invoice quickly. This app will read the QR code of the invoice and verify its authenticity.
With the introduction of QR codes and e-invoicing, businesses must pay attention to accurate tax invoice printing. Tax invoices are valid only if the QR code is correctly shown in the invoice. When printing out the invoice, you must also ensure that the QR code reader can effectively read the QR code. If e-invoicing is not mandatory for your business, you must print accurate invoices containing all the mandatory details. A billing tool will ensure that your invoices are printed using a standardised template.
Want to assure accuracy and GST compliance every time you generate and print a business invoice? CaptainBiz streamlines all invoicing and billing processes for assured GST compliance. Generate invoices, upload to e-invoicing portal, print invoices, upload data to GST forms, and generate reports automatically using the cloud-based billing tool.
What happens if the printed invoice has mistakes?
If the printed invoice has mistakes with respect to GSTIN, supplier, and recipient contact information, it will be rejected. Wrong details in the invoice will render the invoice invalid. If you enter the wrong information for the GST rate, you will have issues with GST liabilities. In a nutshell, printing mistakes with invoices will increase business risks.
How do you ensure proper QR code printing?
There is no guideline for the size of the QR code to be printed in an e-invoice. However, the general rule of thumb is to use 3 x 3 inches for printing QR code. The background and QR code must have a high contrast.
Is it necessary to print a QR code for all invoices?
If you are a GST-registered business, you must print a GST tax invoice when you supply taxable goods or services. If you supply tax-exempted goods or supply to SEZ units, a tax invoice is not necessary. Unless your business has an annual turnover of Rs. 5 crore, you need not generate e-invoices. So, the QR code does not apply to all invoices.
How to ensure that the QR reader will read the QR code?
Printing a QR code with high contrast will enable the QR reader to read the code effectively. The ideal size is 3 x 3 inches. You can place the QR code in any position in the invoice, but ensure that the borders and other text do not hinder the visibility of the QR code. Leave a white space that is at least 1 inch thick surrounding the QR code to improve readability.
Can I add other QRs apart from e-invoicing QR?
Yes, you can add a QR code on your invoice as per the requirements of your business. For example, you can create a QR code that allows your recipient to pay immediately after delivery by scanning the QR code. To print additional QR codes on your invoice, separate them clearly. Every QR code must have a clear explanation of its purpose.