Once E-invoicing becomes applicable to all registered users, it will become an uphill task to keep a track of all E-invoices generated and shared. Further, the schema being new, the suppliers would also be grappling with it.
In such a situation automation and technology are the only rescues of both supplier and the buyer. It is not debatable that it is the responsibility of the supplier to raise E-invoice within the stipulated timeline and share the same with the buyer. However, it is the buyer’s ITC that remains at stake. Therefore, E-invoicing remains equally important for the buyer.
Under the backward integration approach, the purchaser can choose to import E-invoices generated by its suppliers from the ERP system.
The Process Flow Of Backward Integration Is Depicted Below
Key Steps Involved In The Backward Integration Process
Step 1: Supplier will have to share the signed e-invoice in the JSON format generated by the IRP
Step 2: The buyer imports the e-invoice in the JSON format into its ecosystem using APIs or the SFTP route.
Step 3: Using Cygnet Enriched API’s/SFTP to import the signed JSON file which comprises of the purchase information into our tool and fetches the information from the
Step 4: Cygnet will decrypt the JSON and store a draft purchase entry back to the SAP system in the buyer ecosystem using BOT.
What Are The Benefits Of The Backward Integrated Approach?
- One imperative step of recording purchase entries will get automated. With the help of the aforementioned approach, the businesses will save time, cost, and effort.
- The automation helps in verifying the supplier’s E-invoice details thereby enhancing the maker checker methodology.
- Automation of B2B Purchase Entries from supplier’s E-invoice details (posted under Draft Mode) and GR entries from supplier’s E-invoice details would lead to an important step in the Procure to Pay system being automated.
- As the majority part of procurements shall get automated, the time taken to record such entries shall come down significantly leading to the payments for vendors being released early. Thus, the working capital scenario of vendors shall improve
With E-invoicing on the horizon, the backward integration for Purchase Entries would be the next big thing in the tax technology space. Cygnet’s API integrates with the buyer’s ERP and sends a flag when the vendor uploads the invoices on the GST portal.
Cygnet recommends implementing automation in the tax tech space because it makes compliances smoother and easier. With the help of this automation, you can record the entire purchase invoices data without any manual intervention which reduces the time and cost. This further shall help in reconciling the e-invoice, E-way bill, and GST data as any data mismatch could result in notices being issued. Similarly, with several technology solutions, Cygnet simplifies the tax compliances for its clients be it for any industry.
You can also read our blog “Simplify Your Purchase Cycle Post E-invoicing- Part A” which will give you an understanding of how technology helps in simplifying the purchase journey post-E-Invoicing for buyers.