Choosing GST invoicing software before the threshold reaches you
The e-invoicing threshold has only ever moved one way. The rule that catches people out is that it follows your highest past turnover, not your current one.
- Author
- Astera Infotech
- Published
- Reading time
- 6 min read
Most small businesses in India pick billing software the way they pick a bank: somebody recommended it, it worked, and nobody has revisited the decision since.
That is usually fine, until one of two things happens. Either the business crosses a turnover threshold and discovers its software cannot do what the law now expects, or it grows enough that invoicing stops being one person's afternoon job and starts being a bottleneck.
Both are worth getting ahead of, and the second is more common than the first.
The threshold rule people get wrong
E-invoicing — generating an invoice through the government portal and getting back an IRN before you send it — applies above a turnover threshold. That threshold has come down repeatedly.
It has been ₹5 crore since August 2023 and may well stay there. But two details catch businesses out, and both are worth knowing whichever side of the line you sit on.
It follows your highest past turnover, not your current one. The test is whether you crossed the threshold in any financial year since 2017–18. Cross it once and the obligation stays, even if this year is quieter. Plenty of owners assume a lean year takes them back out. It does not.
It applies to B2B, exports, SEZ and deemed exports — not B2C. A business selling mostly to consumers may be well above the threshold and still generate very few e-invoices. A small B2B supplier may be below it and generate none at all, but should still expect its larger customers to ask.
There are exemptions — SEZ units, banking and insurance, goods transport agencies, passenger transport, cinema ticketing among them — which apply regardless of turnover.
This is not tax advice. We build business systems; your CA is the person to confirm what applies to you. What we can usefully say is what your software needs to be capable of, and that is a question people answer far too late.
Why this matters even if you are nowhere near ₹5 crore
Two reasons.
The direction of travel has been one-way for six years. Billing software chosen today will plausibly outlive at least one more revision, and migrating invoice history mid-year is genuinely unpleasant.
More immediately: your customers. Larger buyers increasingly want a compliant invoice, a purchase order reference, and correct HSN codes because their own input credit depends on it. Getting this wrong delays your payment, which is a cash-flow problem long before it is a compliance one.
What actually slows a small business down
Compliance is the thing people worry about. It is rarely the thing costing them money. The real losses are duller:
- Invoices going out days after the work finished, because one person raises them all and they are busy.
- No recurring billing, so somebody re-types the same monthly invoice for the same client, and occasionally forgets.
- Nobody knowing what is unpaid without opening a spreadsheet and cross-checking the bank.
- Quotes and invoices living in different tools, so an accepted quote gets retyped as an invoice, with a transcription error every so often.
- Payment reminders that depend on somebody remembering.
Add up the delay those cause across a year and it dwarfs anything the GST portal does to you. Faster invoicing is a cash-flow intervention, not an admin one.
What to look for
Compliance basics. GST-correct invoice formats, HSN and SAC codes, multiple tax rates, CGST/SGST/IGST handled by place of supply, credit and debit notes. E-invoicing and e-way bill support available whether or not you need them today.
Recurring invoices. If any part of your revenue repeats monthly, this pays for the software on its own.
Quote to invoice in one step. No retyping, and the accepted quote stays linked to the invoice it produced.
Payment tracking that is actually visible. What is outstanding, by how long, without assembling it by hand.
Expenses in the same place. Otherwise your profit figure needs a spreadsheet to exist, which means it exists once a quarter instead of continuously.
A real export. Your invoices, customers and payments, in full, whenever you want them. Ask before you migrate, not after.
Something your CA can work with. Ask them what they want to receive before you choose. This one question saves more monthly friction than any feature comparison.
Standalone billing, or part of your operations
Standalone billing tools are cheap, quick and perfectly good if invoicing is the only thing you want to fix.
The argument for something broader is the same one that applies to leave and attendance: the data is connected whether or not your software is. A quote becomes a project, the project has hours and expenses, the expenses affect whether the job made money, and the invoice is where it all lands. Kept in separate tools, someone moves numbers between them and the profit figure is always slightly out of date.
That is why our own AsteraPortal has invoicing, recurring billing, quotations, expenses and tax rates in the same system as projects and payroll rather than as a separate product. Whether that is worth it depends entirely on whether you have the other problems too — if invoicing is genuinely your only pain, buy a billing tool and spend the difference elsewhere.
For genuinely unusual billing — usage-based pricing, complex job costing, an industry format nobody supports — the calculus changes, and we have written about when building is justified.
A reasonable way to switch
- Ask your CA what they need from you first. Then choose.
- Move at a clean break. The start of a financial year or a quarter. Mid-year migrations mean invoice numbering in two places.
- Carry your customer master over carefully. GSTINs, addresses, place of supply, payment terms. Wrong GSTIN, wrong tax, wrong invoice.
- Raise ten real invoices before you commit. Including a credit note and a recurring one.
- Keep the old system readable for a year. Not running — readable. You will need to look something up.
The honest summary
Pick software that already handles e-invoicing whether or not you need it, that does recurring billing if any of your revenue repeats, and that your CA is happy to receive data from. Then judge it on how many days sooner your invoices go out, because that is where the money actually is.
If you would like help working out whether your invoicing is a software problem or a process one, tell us how an invoice gets raised in your business today — the answer is often that nothing needs buying, just moving one step earlier.
- gst
- invoicing
- billing software
- compliance
- small business