QR codes are not required on e-invoices in all countries. However, QR codes may be required on e-invoices in some regions, depending on local guidelines and regulations. QR codes are used on e-invoices in some countries such as China, India, and some European nations, as part of their standardized electronic invoicing systems.
In this article, you will learn how QR codes are used in e-invoices. We will focus on what information an e-invoicing QR Code contains, what the purpose of QR Codes is, how to generate a QR Code, and more.
What is the purpose of the QR code?
A QR code, or quick response code, is a two-dimensional barcode.
In the e-invoicing system, QR Codes are used to provide machine-readable information about a particular invoice in a quick manner, eliminating the need to retrieve said information from an external source.
By automating data extraction from invoices, business operations will become more efficient.
As mentioned, QR codes are not mandatory in all countries that have adopted e-incoiving. Here is a table showing what countries have already implemented QR codes as part of their e-invoicing systems to facilitate electronic transactions.
Indirect tax officials could determine whether a particular invoice is genuine and contains all the required information using mobile devices to read QR codes. This may prove very useful to them while they are on the field.
As soon as the Invoice Registration Portal (IRP) assigns the QR Code to the supplier, the supplier must create a PDF of the signed e-invoice.
A QR code can be static or dynamic. Static QR code is more common.
In the GST (Goods and Services Tax) system, a dynamic QR code is used to promote digitization and digital payments. Dynamic QR codes have the following advantages:
- Each dynamic QR code has its own characteristics.
- The buyer or payee cannot alter values or amounts.
- Any UPI app can pay the amount indicated or due quickly and conveniently.
What information does an e-invoicing QR Code contain?
The following are the parameters that will be used to create the QR Code:
- GSTIN of the supplier
- GSTIN of the recipient
- Invoice number given by the supplier
- Date of the generation of invoice
- Invoice value
- Number of line items
- HSN Code of the main item
- Unique Invoice Reference Number/Hash
Is the QR Code mandatory for all B2B invoices?
B2B invoicing refers to requesting payment between B2B companies. Normally, this happens when a supplier sends a buyer an invoice for payment. Generally, B2B invoices indicate the cost of the product or service provided to the client.
Business-to-Business (B2B) invoices do not have to contain QR codes in every country that has implemented GST. Tax authorities in different countries may require QR codes on B2B invoices, so it's vital to refer to their specific regulations and guidelines.
For businesses with a certain turnover threshold, QR codes are mandatory on B2B invoices in some countries, such as India.
Information about the invoice is contained in the QR code, including the GSTIN, invoice number, date, and other details relevant to the invoice. It simplifies the process of filing tax returns and facilitates digital transmission of invoice data.
Taking the case of QR code on e-invoices in India as an example, here is the latest law:
13th April 2023
A tax invoice or credit-debit note issued by an entity with an annual turnover of Rs.100 crore or more must be reported to the IRP within seven days of the invoice or CDN being issued, according to a GSTN advisory published on 12th and 13th April 2023.
1st August 2022
Since 1st October 2022, e-Invoicing has been extended to companies with annual aggregate turnovers over Rs.10 crore and up to Rs.20 crore using notification no. 17/2022.
This topic is covered in detail in our blog post "Mandatory E-Invoicing in India for All B2B Transactions (From Oct 2022)."
How to generate a QR Code for e-invoicing?
Invoice Registration Portals (IRPs) typically generate QR codes for e-invoicing as part of the process.
The QR code is generated in the following manner:
1. Prepare the JSON invoice
For starters, you must create the invoice in JSON format in accordance with the tax authority's standards. All invoice details should be included in the JSON, including invoice number, date, GSTIN of the supplier, customer details, line item information, and amount.
2. Upload JSON to IRP
As soon as the JSON is prepared, it should be uploaded to the Invoice Registration Portal (IRP) designated by the tax authority. As part of the compliance process, invoices are registered and validated on the IRP platform.
3. Generate Invoice Reference Number (IRN)
A Invoice Reference Number (IRN) is generated after the JSON is processed on the IRP. IRNs serve as unique identifiers for invoices, which can also be used for referencing and tracking.
4. Affix Digital Signature
As soon as the IRN has been generated, the IRP will allow you to sign the JSON with a digital signature. Invoice data is authenticated and integrity is ensured by this digital signature.
5. Generate QR Code
Based on the invoice data, the IRP generates the QR code along with the digital signature. There is a QR code on the invoice that contains a machine-readable version of the invoice information.
6. Affix QR Code to JSON
QR codes are attached to JSON files once they have been generated. A QR code and JSON can be accessed together as a single entity as a result of this linking.
7. Download the QR Code-Enabled JSON
The JSON file with the QR code and digital signature is finally available for download. It is now ready to be shared with recipients or used for further processing, such as sending the customer an e-invoice.
QR codes and digital signatures are generated within the Invoice Registration Portal (IRP) provided by the tax authority. To ensure compliance with e-invoicing regulations, it is important to follow the specific procedures and guidelines outlined by your jurisdiction's tax authority.
What is a dynamic QR code?
QR codes that contain dynamic content take users to specific information or web pages. These codes are "dynamic" because the URL encoded in them redirects to a second URL, which can be changed anytime. It is not possible to change static QR code in that way.
Dynamic QR code is more flexible and advanced. Compared to their static counterparts with multiple codes, these codes can be edited and tracked in scans.
Also, dynamic QR codes can be integrated with different software, such as Google Analytics, Zapier, Hubspot, and Canva. Furthermore, it allows you to put a password into your QR code, use Google Tag Manager, and receive notifications whenever your QR code is scanned.
As a new-generation marketing tool, this advanced and flexible QR code was designed to target customers while keeping things fun and engaging. You can easily create a dynamic QR code by using online QR code generators.
Who needs to generate a dynamic QR code for e-invoicing?
The invoice issuer typically generates the QR code based on the invoice information. Invoice generation is the responsibility of the supplier or the person/business generating the invoice.
A dynamic QR code embeds relevant invoice information in a machine-readable format, allowing the recipient and tax authorities to process invoices easily and accurately.
This facilitates digital payments and seamless integration into an accounting system or invoice management system by allowing the recipient to scan the QR code and extract the invoice details.
Therefore, invoice issuers or suppliers must generate dynamic QR codes that comply with the requirements set by their local tax authority or regulatory body.
Takeaway: Unlocking the Potential of QR Codes in E-Invoicing
To conclude, QR codes for e-invoicing provide a secure and efficient method for automating invoicing processes. Businesses and customers alike are increasingly choosing QR codes for e-invoicing because of the convenience of mobile access and the ability to generate and store invoices digitally.
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You can streamline and automate your invoicing process with Storecove's e-invoicing solution. The advanced system we offer will help you generate, send, and track invoices quickly and efficiently while providing you with valuable financial insights. Using Storecove can save you time and money while improving your cash flow.
We encourage you to try Storecove's e-invoicing if you want to simplify and modernize your invoicing process. Invoicing has never been easier and more efficient than with our user-friendly platform.
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