Reconciliation between Sales Register and E-Invoice

Every normal taxable person under GST needs to file GSTR-1 on either a monthly or quarterly basis and any mistake in filing it can lead to penalties and interest. So, how can you ensure that your mistakes do not attract any penalty or interest? The answer to this is, you need to perform reconciliation between e-invoices and the sales register to prepare an errorless GST return. 

What is Sales Register and E-invoice? 

A sales register shows the data of the sales made by a business concern during a period. The sales register consists of details about the sales with recipient name, invoice date (chronological order), invoice value, place of supply, and so forth. 

An electronic invoice (e-invoice) is an invoice that is approved and validated by IRP (Invoice Registration Portal). All B2B and Export Invoices and Credit/Debit Notes need to have a QR Code and IRN number to be a valid Invoice. As soon as an invoice is raised, the GST portal auto-fetches the data from the IRP portal. 

Importance of Reconciliation between Sales Register and E-Invoice 

As we already know that GST portal auto-fetches the e-invoice level data from the IRP and some tables from NIC Portal, you need to reconcile the sales register, auto-populated GSTR-1 with e-invoices. Apart from this, there are several other reasons why you should perform reconciliation between the two: 

1. Reconciliation between sales register and e-invoices will help you to avoid re-uploading the data that is already auto-populated from the e-invoice. 
2. The reconciliation between the two will also help you to finalize the sales register at the end of the fiscal year. 
3. It will also help you to keep a tab on errors made in the e-invoices due to which penalties or interest may arise in the future. 

Situation Where Re-uploading of Data is required 

1. If any auto-populated invoice is edited/deleted. 
2. Due to government glitches, some invoices failed in auto-population. 
3. Invoice cancelled but 24 hours of IRN generation expired. 
4. Changes in the details after 24 hours of IRN generation due to manual error or any other reason. 

Reason for Mismatches between Sales Register and E-Invoice 

So, now the question is what can be the varied reasons for the mismatch between a sales register and an e-invoice? 

1. Mismatch in the invoice date and number. 
2. Issued an e-invoice to an incorrect GSTIN. 
3. IRN generated but not auto-populated due to glitches 
4. IRN not generated due to any mistake. 

The Process to Reconcile Sales Register with E-Invoice 

As we already know that you cannot cancel an e-invoice after 24 hours so, erroneous e-invoices need to be identified and rectified. Hence, this makes it particularly important for you to reconcile the sales register and e-invoice. Currently, two ways are using which you can perform reconciliation between the two.

Manual Process 

1. You need to first download the e-invoice from the IRP. 
2. Afterward, you need to enter an e-invoice and sales register data in excel to match it using look-up and pivot tables. 
3. Once you are done with the reconciliation, you need to re-upload or cancel all those e-invoices that are not reconciling or matching with the sales register. 

The other option which is widely being used is deleting/resetting all the GSTR-1 auto-populated data from e-invoice and then uploading/preparing GSTR-1 based on Sales Register. But the major drawback of this process is that it will delete all IRN, source, and date associated with invoices. Due to this, the buyers will not have IRNs for verifying the invoices in GSTR-2A/GSTR-2B that can create buyers’ problems for ITC claiming. 

Automated Process 

The process smoothens whenever you use software, as you can auto-fetch the e-invoice level data from the IRP and reconcile it with the sales register. Then you can reconcile the mismatches detected by the reconciliation software. 

The best part is that the software will provide an auto-match report of reconciled e-invoice data and sales register. This detailed reconciliation report will also help you to re-upload only those invoices separately which are missing or incorrect. 

Consequences of Not Reconciling Sales Register with E-invoices 

Reconciliation between sales register and e-invoice is important as there can be penalties for issuing incorrect e-invoices. Even, IT department can also take action against you in case if they find any mismatch in the e-invoice and sales register data while performing an annual audit.