In today’s digital era, businesses in Nepal are rapidly adopting E-Billing systems to manage their operations and ensure compliance with government regulations. This blog will walk you through the essentials of E-Billing approval in Nepal, the Central Billing Monitoring System (CBMS), and the process of obtaining approval for billing. Let’s dive in!

What is E-Billing or computerized-biling?

E-Billing, or computerized billing, replaces traditional handwritten bills with invoices generated using approved software. This not only simplifies the billing process but also makes it faster and more trustworthy. 

Key benefits of E-Billing:

• Simplifies the invoicing process
• Reduces errors and enhances accuracy
• Ensures compliance with tax regulations
• Increases transparency in financial transactions

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Mandatory Requirement for E-Billing

In Nepal, obtaining approval from the Inland Revenue Department (IRD) is mandatory for businesses to generate invoices using E-Billing software. 

• Businesses with annual transaction amounts exceeding NPR 10 crore must obtain IRD approval to generate invoices using E-Billing software.
• For specific sectors such as hotels, canteens, and restaurants, the threshold is lower at NPR 5 crore.

This ensures that businesses are adhering to Nepal’s tax regulations and issuing invoices in a transparent, reliable, and verifiable manner. Businesses can only use IRD-approved software for billing, ensuring their invoices are linked to the government’s tax monitoring system, CBMS.

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‍CBMS (Central Billing Monitoring System)

Meanwhile, CBMS (Central Billing Monitoring System) is a centralized system developed by the IRD (Inland Revenue Department) of Nepal to monitor and manage the invoices issued by businesses. This system helps the government keep track of transactions in real-time and ensures that tax regulations are being followed.

For businesses with an annual turnover above NPR 25 crore, all invoices must be synced with the CBMS in real-time.

When an invoice is generated using IRD-approved E-Billing software, key details such as the customer’s name, PAN, invoice date, and amount are automatically synced with the CBMS. It provides a secure platform for tracking sales returns, credit notes, and invoices while excluding sensitive details like payments and inventory data.

Business owners can easily log into the CBMS portal to view synced records, ensuring compliance and transparency.

IRD approval process for E-Billing

1. Select an Approved E-Billing Software

• Choose an E-Billing software that complies with IRD requirements.
• Ensure the software supports features like VAT compliance, transaction tracking, and integration with IRD systems.

2. System Configuration and Testing

• Set up the E-Billing system as per IRD guidelines.
• Conduct a test run to ensure it functions correctly and complies with legal and technical requirements.

3. Prepare Necessary Documents

Gather and submit the following documents along with the application:

• Business registration certificate.
• PAN/VAT registration certificate.
• Latest Tax Clearance Certificate
• Software purchase invoice.
• Agreement with the software provider.
• Software user manual.
• Agreement with a datacenter (if the software is cloud-based).
• Sample invoices and tax reports generated from the software.

4. Register with IRD

• Submit your application to the IRD along with the above documents.
• Ensure all provided information is accurate and complete.

5. Software Compliance Check

• The IRD will verify whether the chosen E-Billing software meets its technical specifications and standards.
• The software must be capable of integrating with IRD’s CBMS for real-time transaction data reporting.

6. Approval and Certification

• Upon successful testing, the IRD will issue an approval certificate.
• This certificate authorizes the business to use the E-Billing system for generating invoices.

7. Ongoing Compliance

• Ensure the E-Billing system is used for all transactions and complies with IRD reporting standards.

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Choosing the Right E-Billing Software in Nepal

When choosing the right e-billing software in Nepal, several factors should be considered to ensure it aligns with your business needs, regulatory requirements, and financial goals. Here are key points to consider:

1. Compliance with Nepalese Tax Laws

• VAT and E-Billing: Ensure that the software supports VAT (Value Added Tax) and E-Billing compliance. It should automatically generate tax-compliant invoices that include proper tax calculations and reporting.

2. Integration Capabilities

• Compliment: Verify that the software complies with the latest regulations set by the Inland Revenue Department (IRD) of Nepal, E-Billing requirements, reporting requirements, and CBMS integration.

3. Security

• Data Protection: Ensure that the software uses encryption and follows best practices for securing sensitive data, such as customer payment details.
• User Access Control: The ability to manage user roles and permissions is crucial, especially if multiple people are involved in billing or accounting functions.

4. Cloud-Based vs. On-Premise

• Cloud-Based Solutions: Cloud solutions are popular due to their accessibility from anywhere, automatic updates, and reduced infrastructure costs. Make sure the cloud-based system is hosted on secure servers.
• On-Premise Solutions: If you need more control over your data or have specific security concerns, an on-premise solution might be more suitable.

5. Reporting and Analytics

• Comprehensive Reports: The software should generate detailed reports, including sales summaries, customer payment histories, tax calculations, and other financial data, to help you make informed business decisions.
• Real-Time Tracking: Look for software that offers real-time tracking of unpaid or overdue invoices to streamline collections.

6. Scalability

• Mutual growth: As your business grows, the software should be able to scale accordingly, whether by adding more users, handling larger volumes of invoices, or accommodating new business needs.

7. Customer Support

• Local Support: Consider software providers that offer local customer support to address issues quickly.
• Training and Resources: The availability of training materials, online tutorials, and a help desk can be critical for smooth operation.

8. Cost and Pricing Model

• Affordable Pricing: Evaluate the software's pricing structure. Many e-billing software options offer tiered pricing, so choose one that fits your budget.
• Free Trial: Look for software that offers a free trial to test its features before committing to a long-term contract.

9. Mobile Accessibility

• Mobile App or Mobile-Friendly: A mobile-friendly platform or dedicated mobile app will allow you to generate and track invoices on the go, especially useful for businesses with field agents or remote teams.

By considering these factors, you can select e-billing software that is secure, user-friendly, and compliant with Nepal's regulations, helping to streamline your billing processes and improve customer satisfaction.

Adopting E-Billing and obtaining IRD approval is not just about compliance; it’s a step towards modernizing your business operations and enhancing efficiency. With systems like CBMS in place, businesses can ensure transparency, reduce errors, and build trust with their customers.

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If you’re looking for an IRD-approved E-Billing software that’s reliable, secure, and user-friendly, you should give Tigg a try. Contact us today or visit our website to learn more and take your first step toward hassle-free E-Billing!

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