Many businesses still do not understand much about the difference between electronic invoices and paper invoices. So what is the difference between these two types of invoices?
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E-invoices in the future will be chosen by many businesses and gradually replace regular invoices. So do you know what is the difference between electronic invoices and paper invoices? Let’s learn how to compare electronic invoices and paper invoices through the following article of MVA Accounting.

The National Assembly passed the Tax Administration Law on June 13, 2019. Clause 2, Article 151 clearly states:

– Regulations on electronic invoices and documents of the Law on Tax Administration take effect from July 1, 2022.

However, so far, many businesses have not used e-invoices for a number of inadequacies:

– The first is that the cost of installing software is quite large, it is necessary to go through a consulting company and a software supplier, which makes it difficult for small and medium enterprises.

– Business owners and employees need to be equipped with information technology knowledge and regularly check the issue of invoices to avoid possible risks.

– Risk of force majeure such as: power failure, system failure, internet signal loss, …

– However, e-invoices have a faster processing process

I. Authenticated e-invoice:

+ Authenticated e-invoice or e-invoice with authentication code is a type of invoice issued with an authentication code (authentication code is an encrypted string of characters, provided by the invoice authentication system of the General Department of Vietnam). Tax is based on the invoice information of the business) and the authentication number through the authentication system of the tax authority.

+ In order to have an authentic electronic invoice, when selling goods or providing services, enterprises send invoices to the tax authorities via the portal for confirmation and then transfer them to customers via the Internet.

To know more about authentic e-invoices and how to look up invoices with authentication codes, please see: Authenticated e-invoices – How to look up authentic e-invoices on the lookup page of the General Department of Taxation

+ E-invoices with authentication codes have been applied to a number of businesses and are encouraged by the Government. The benefits that network authentication e-invoices have to mention are:

–  Confidentiality:  Ensure high accuracy and safety, avoid counterfeiting of invoices (this is a painful problem for authorities and genuine businesses). The closed invoice authentication process with many security steps makes it difficult for invoices to be forged, thereby minimizing the situation of fake invoices and avoiding loss of revenue for the government.

– Save time  for businesses and tax authorities, reduce administrative procedures: You can create invoice templates, issue invoices right at the business and be accepted by the tax office within the same day. The overload for businesses and tax authorities will be reduced after using e-invoices.

Reduce  costs : Reduce the cost of printing invoices, storing invoices, transporting invoices, contributing to improving production and business efficiency, avoiding burning, damage, and loss of invoices. (If you lose your business invoice, it takes a long time to explain to the tax office and you may be fined from 500,000 VND to nearly 20,000,000 VND)

Advantages of e-invoices

1.For sellers and businesses:

Reduce the associated costs compared to using paper invoices (printing, storage …)

Reduce the time and cost of doing procedures with tax authorities.

Enhance safety in storage, reduce search time, look up old invoices, avoid loss.

2.For buyers:

Ensure buyers do not buy goods or get invoices from units named in the black book of tax authorities.2

3. With tax authorities:

Easier, reduce costs and time in management, data aggregation.

Timely prevention of tax frauds.

II. Regular Invoice:

+ Ordinary invoice, red invoice, also known as value-added invoice, is the official invoice issued by the Ministry of Finance of Vietnam, applied to enterprises operating in production and business in Vietnam.

+ To issue this type of invoice, it is necessary to go through many stages such as: the enterprise makes an application for permission to order the printing of red invoices, finds a printer that is eligible to make a printing contract, and makes a printing order. …

+ The advantage of this approach is that they have high accuracy because businesses have to spend a lot of time and effort to prepare relevant documents as well as perform all stages to meet requirements. of tax authorities. Besides, issuing red invoices in this normal way also has disadvantages such as:

– The cost of printing and storing this invoice is not a small expense, especially for large businesses or with a lot of transactions. In addition, the transportation and payment of invoices between the parties (especially the delivery of invoices to customers far away from the business, requires the use of express delivery service and costs from 10 to 30,000 VND). ) will also consume a significant amount of expenditure that not all businesses can afford.

– Red paper invoices can be faked due to the loopholes of the management mechanism. With fake invoices, businesses have the opportunity to buy, sell and use illegal invoices to overstate costs, deduct and refund value added tax.

Using paper invoices means working in the traditional way with cumbersome papers, and managing information is still relatively manual. From the step of setting up an invoice to entering data to make a tax report, all of them require going through a time-consuming process of digitizing data.

For example, when a business creates a paper invoice for a customer, it often requires many operations such as preparing carbon paper, handwriting information about customers, products and services. This stage takes about 5-10 minutes to perform and is prone to errors. At the end of the month, the Enterprise accountant will need to input most of the information in the paper invoice into the computer. Meanwhile, enterprises use e-invoices, by default the data has been digitized, even collected by the tax authority’s system right after the enterprise creates invoices.

Compare the utility of electronic invoices with paper invoices

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