5 key features required in e-Invoicing solution for small businesses

5 key features required in e-invoicing solution for small businesses (1)

The Ministry of Finance has recently mandated GST e-Invoicing for B2B and export transactions for the taxpayers having annual turnover from ₹20 crores to ₹50 crores in any FY from 2017-18 and onwards, with effect from 1st April 2022. The change indicates a massive scale-up of compliance requirements for small businesses and the need to remain compliant with the changing norms of doing business.

This change has also compelled small businesses in India to get a robust Tax Tech infrastructure by integrating an e-Invoicing solution in their tax ecosystem to meet the GST invoicing needs and stay compliant.

Small businesses must keep many aspects in mind before choosing the right software. Here is a summary of the modes of e-Invoice generation available to small businesses and the features to consider when selecting the e-Invoicing partner.

Generation of IRN

Small businesses can choose one of the following modes of IRN generation depending upon the volume of e-Invoices generated on a daily basis and the existing accounting systems:

  • Offline tools provided by the IRP (NIC)
  • GST e-Invoice Preparing and Printing system (GePP-On) provided by IRP (NIC)
  • Directly from the accounting software or ERP through API integration with a GSP, such as Cygnet Infotech.

Accounting software used

Generally small and medium enterprises do not have sophisticated ERP systems in place and most of them still use legacy accounting software. Therefore, the choice of the mode for IRN generation should be based on the existing software and the proposed up-gradation. Further, if the taxpayers with to record the IRN in their system, integration through API would be required.

Types of transactions performed

e-Invoicing in the sub-500 crore category is applicable only for B2B and export transactions. Therefore, the taxpayers in this category would have to differentiate such invoices from B2C sales and generate IRN accordingly.

Manual and technological interventions

The taxpayers supplying goods would be required to continue generating the e-Way bills and e-Invoices under GST in India. The taxpayers opting for offline tools or GePP-On would have to do such reconciliation manually, while those preferring to use GSP to generate e-Invoices may be able to reconcile the data automatically if their e-Invoicing supports such reconciliation.

Importance of integrations & automation

The data in GSTR-1 would be auto-populated based on the IRN generated. Hence in case, the invoice could not be canceled within 24 hours on IRP or is canceled later, the same would be auto-populated in GSTR-1. The taxpayers would be required to reconcile the data in such cases. Integration with GSPs such as Cygnet Infotech may help in automating such reconciliations.


e-Invoicing can be a challenging task for small businesses in India. It is time-consuming and the chances of human errors is higher which can easily hamper ITC and block working capital. 

Understanding the regulatory changes and choosing the e-Invoicing software with right features should be the priority for small businesses to stay compliant. Reach out to Cygnet Tax Tech, learn about the suite of e-Invoicing solutions that offer value-for-money and ease of use to automate invoicing process and generate valid e-Invoices. Mail us today: hello@cygnetgsp.in

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