In the first phase of e-invoicing, businesses with a turnover of more than Rs.500 crores in the previous financial year have been asked by the government to transition to e-invoicing. These organisations normally have a full-fledged ERP customised to their existing business requirements across all functions. Considering various factors such as the volume of invoices, real-time requirement of invoices, etc., using the offline Excel utility for the generation of e-invoices on Invoice Registration Portal (IRP) is not a feasible solution.
Hence, ERP integration helps businesses to seamlessly generate e-invoice/IRNs (Invoice Reference Numbers) from within their ERP in no time. There are two types of ERP integrations available for e-invoicing. One is an API-based approach, and another is an SFTP-based approach.
API-based (Application Programming Interface) integration is an integrated approach which allows the direct connectivity between your ERP and the GST Suvidha Provider (GSP). The data will be directly picked up from your ERP system, pushed to the e-invoice portal in real-time and further processed. The resulting output will then be updated back into your ERP.
In an SFTP-based integration, data gets pushed from your ERP system in batches into a folder in the SFTP server. From there, the data gets picked by the GSP to be processed further. The results, once generated by the e-invoice system, will be stored back into the SFTP folder, which will be accessible to you.
SFTP integration involves lower costs and time compared with API-based integration. Hence, some taxpayers prefer the SFTP approach. Unlike the API-based approach, e-invoicing through the SFTP approach does not happen in real-time while uploading a document. It happens on a scheduled basis as it is a batch process which runs at a specific interval of time.
Also Read: IRP Clarifies Confusion on QR Code Under e-Invoicing
There are many benefits when you opt for ERP integration compared to an offline utility. The following are some of the benefits of ERP integration:
Before opting for an ERP integration, businesses need to take a look at the features by both API and SFTP-based integrations.
The features of an API-based integration are:
The features of an SFTP-based integration are:
All businesses need to do is make a Business Impact Analysis (BIA) from which you can conclude what type of ERP integration you should adopt for your business, and choose an efficient GSP who can fulfil your requirements. ClearTax, a registered GSP, comes up with an e-invoicing solution which is easy to connect and easier to scale. ClearTax is easy to connect as it can connect with any ERP and it is easy to scale as it can scale up to any level of volume of invoices.
For any clarifications/feedback on the topic, please contact the writer at dvsr.anjaneyulu@cleartax.in
DVSR Anjaneyulu known as AJ, is a Chartered Accountant by profession. Loves to listening to music & spending time with family and friends.
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