Micro, Small & Medium enterprises are the backbones of India’s economy. It contributes to 30% of the GDP of India. Thus, they lead the growth story of the economy of India. The government has taken several initiatives to further bolster the growth of micro and small industries. One such initiative is GST. After the implementation of GST, MSMEs came under a few regulations, and e-invoicing is one of them. To comply with e-invoicing you need an invoice first.
In this blog, we will discuss the reasons your small business needs invoicing. Also, will throw some light on the best GST invoice software.
Why Businesses Should Invoice Customers
Following are the reasons why businesses should generate an invoice for every sale they make:
Reason #1: To Record Keeping
For taxation purposes, businesses have to keep a record of their yearly/quarterly sales so that they can file accurate GST returns. Also, it helps you to gain insights into your business such as the highest paying client, highest ticket size, and other a lot of KPIs.
Also, it works as a record that a customer has bought something from you, you can produce the same in court as proof of document if a customer denies the payment.
Reason #2: Establish A Brand Image
Properly designed invoices aid in bolstering the brand image of your business. These invoices foster trust in the minds of first-time customers, especially. It creates a positive image and conveys professionalism, ultimately your business stands out from the competition.
Without invoicing high ticket value clients are less likely to engage with your business.
So, start generating branded invoices for your customers no matter how small the billing value.
In Munim – the best small business invoice software, you can customize your invoice as per your requirements and can also paste your company logo.
Reason #3: Aids In Payment Processing
In India, goods are still purchased on credit. The duration of credit is decided on the mutual agreement of both parties. In some cases, customers fail to make a payment even after the due date. At that time, you can authoritatively ask for a payment quoting the invoice number that you have sent them.
Besides, some companies do not release payment unless you send them an invoice. This is how their SOP is drafted.
Reason #4: Get Access To Business Loans
If your business is doing excellent and you have a record of invoices of sales then you get business loans easily. Also, if you have invoices, the lender considers it as a positive sign enabling you to pass scrutiny effortlessly.
Reason #5: Keeps Customer Happy
When you send an invoice to your customer it elevates their buying experience. Secondly, you don’t have to dictate payment terms & conditions every time. Every minute detail will be available on their hands. Besides, it also helps them track their expenses. So, an invoice is not only for your business but for customers as well.
Reason #6: Legal Purpose
Sometimes your books of accounts may get scrutinized by GST officers if they find something fishy, in those times invoices can help you. Though we hope it should not happen to anyone but still have to prepare for the worst.
Reason #7: GST Return Filing
To file a GST return, businesses can make use of sales to calculate how much tax they are liable to pay. Sometimes, authorities raise a query with tax returns. In that case, invoices can be produced to sort out things.
Reason #8: Adhere To Regulations
From 1st January 2023, businesses with more than 5 crores of turnover are required to generate e-invoices mandatorily. If a business fails to comply, it will be penalized.
To generate an e-invoice you need to draft an invoice first. With Munim — the best GST invoice software, you can generate an invoice as well as an e-invoice effortlessly.
Reason #9: To Keep Your Books Of Accounts Updated
Sales invoices consist of raw data which is further reflected in books of accounting. For accurate accounting, you should always keep a copy of the invoice to tally, if the entries mismatch.
Furthermore, CAs can make use of these data to calculate asset turnover ratio, net margin, gross margin ratio, and net profit.
Reason #10: Helps You Manage Inventories
A sales invoice can aid in managing inventory. From sales data, you can forecast the demand for the next quarter/year and accordingly, you can plan procurement.
With Munim, you can track inventories, purchase orders, purchase bills, and purchase returns.
So this was all about the reasons why your small business needs to normalize sending invoices to clients. If you think it would be time taking then let us help you with a solution. Munim is India’s best Invoice management software. With this business invoice software, you can also generate general invoices and e-invoices as well. If you are still confused, try our software for 14 days and see how it works. And yeah, this trial is absolutely free and even a credit card is not required.
Q. What is e-invoicing software?
E-invoice is the process of getting invoices authenticated electronically from the GST portal. The software from which we can do this process is called e-invoicing software.
Q. What would be the penalty if I don’t generate an e-invoice?
The penalty for not abiding by the e-invoicing regulations is either 100% of the tax amount or Rs. 10,000 whichever is greater. In case of wrong e-invoicing, the penalty is Rs. 25,000 per invoice.
Q. Why is e-invoicing mandatory?
With the regulation of e-invoicing, the government aims to bring small businesses into the formal sector so that they can directly contribute to the growth of the GDP of India.
Q. Is e-invoice only for B2B?
Yes, you need an e-invoice only for B2B transactions. In B2C transactions, you need only e-way bills, wherever applicable.