A Guide to Electronic Invoice System BIR Philippines in 2024

The BIR EIS is a major change in the dynamics of business accounting operations in the Philippines in 2024. Bakit nangyayari ito? The passage of Republic Act No. 10963, or TRAIN Law, significantly impacted the implementation of tax compliance for businesses in the Philippines.

The TRAIN Law by the Philippine government marked the beginning of the transition of the tax collection system from paper-based to electronic-based. In this regard, the use of the BIR EIS system increased rapidly to support the growth of Philippine businesses in the era of modernization.

To help businesses stay ahead of evolving tax regulations, HashMicro’s E-Invoicing Software offers an automated, seamless solution that ensures compliance with the BIR EIS system. With real-time updates and secure integration, businesses can streamline tax filings and invoicing, ensuring both accuracy and efficiency.

Ano ang ibig sabihin ng BIR EIS, at paano ito naiiba sa BIR CAS? This article will explain everything for you. Read on to learn about the BIR EIS system, compliant with Philippine government regulations and approved by thousands of Southeast Asian businesses.

What is BIR EIS?

BIR EIS (Bureau of Internal Revenue Electronic Invoicing System) is an electronic invoicing system the Philippine government requires. It automates creating and submitting e-invoices and receipts for businesses, ensuring compliance with tax regulations.

The system is designed to streamline tax reporting and improve transparency, helping companies manage their invoicing and tax documentation more efficiently. It is especially beneficial for companies engaged in significant transactions or those required to follow specific tax regulations.

What are the BIR EIS Compliance Requirements?

Following the BIR EIS (Electronic Invoicing System) compliance requirements is important in helping businesses transition smoothly. The system requires businesses to meet specific technical and procedural standards, including:

1. Electronic Invoices and Receipts: Businesses must create invoices and receipts in electronic format, specifically using JSON (JavaScript Object Notation). This lightweight format ensures a consistent way of transmitting and processing data.
2. Submitting to the BIR: All electronic invoices and receipts must be sent to the BIR. This is done by submitting invoice data through the EIS using a web service or an API (Application Programming Interface), ensuring a secure and direct data transfer to the BIR.
3. Data Security and Storage: Businesses must protect the integrity and safety of their electronic data. As the BIR guidelines outline, they must implement strong data protection measures and securely store their records for the required period.

Following these requirements shows a business’s commitment to using modern practices and technology. By meeting these standards, businesses can enjoy benefits like more accurate data, quicker processing, and better security for financial transactions.

The Differences Between BIR CAS vs BIR EIS

Before comparing BIR CAS (Computerized Accounting System) and EIS (Electronic Invoicing System), it’s essential to understand their distinct roles. While both systems enhance financial management, they serve different purposes. Here’s a simplified comparison to help you determine which best suits your business needs.

Benefits of Using BIR EIS Through Software

Using BIR EIS through software provides several benefits:

1. Automated tax compliance: Ensures businesses comply with government electronic invoicing and reporting regulations.
2. Improved accuracy: Reduces manual errors in invoicing, leading to accurate tax reporting.
3. Efficiency: Speeds up the process of invoice generation and submission.
4. Transparency: Enhances record-keeping, ensuring that all transactions are traceable and compliant.
5. Cost savings: Minimizes paperwork and administrative overheads related to tax filing.

To fully benefit from BIR EIS, you must carefully digitize your processes using reliable accounting and billing software. However, implementing this software involves costs. To discover how much you need to invest, explore the billing software pricing schemes below and choose the one that best fits your business needs.

Why is the BIR Electronic Invoicing System Important?

The BIR invoice is essential for businesses in the Philippines to comply with tax regulations. Here are the main reasons why BIR EIS is necessary:

• Prevents fraud: Reduces opportunities for tax evasion and fraudulent invoicing practices.
• Enhances trade competitiveness: Helps businesses adapt to global standards, improving competitiveness in international markets.
• Encourages digital transformation: Drives businesses toward more efficient, tech-driven operations, promoting overall innovation.
• Simplifies cross-border transactions: Businesses can manage international transactions more easily by using standardized e-invoices, which can only be generated with BIR-accredited POS.
• Improves cash flow management: With faster invoice processing, businesses can manage cash flow more effectively.
• Reduces administrative burden: Minimizes the need for manual handling of invoices, allowing staff to focus on core business activities.

Also read: A Guide Inventory List BIR Submission in Philippines 2024

How does the Electronic System Work in the Phillippines

The Electronic Invoicing System BIR (EIS) in the Philippines is a tax reporting tool that sends invoice data to the Bureau of Internal Revenue (BIR) after it’s issued to clients. Developed with KOICA’s support, the system follows a “Continuous Transaction Control” model, similar to South Korea’s approach.

The BIR EIS applies to all sales invoices, receipts, debit/credit notes, BIR eSales, and related accounting documents. To ensure timely and standardized data exchange, these documents must be submitted to the BIR within three days via an API in JSON format.

Each invoice requires key details like document number, issue date, Unique Identification Number, and seller and buyer information. A JSON Web Signature (JWS) is applied to verify authenticity before the BIR validates each submission, either accepting or rejecting it.

How to Achieve EIS Compliance?

To comply with the BIR EIS, businesses must follow a series of steps in an organized manner. Here’s an overview of the process:

Registration and System Setup

• Register on the BIR EIS portal.
• Set up the necessary software and systems to handle electronic invoicing and receipts.
• Make sure the company’s systems meet the BIR’s technical requirements.

Integration and Testing

• Integrate the EIS with your current accounting or ERP systems.
• Test everything thoroughly to ensure the systems work properly and meet BIR standards.

Training and Adaptation

• Train your staff on the new systems and procedures.
• Adjust internal processes to fit the new electronic invoicing and receipting methods.

Ongoing Compliance and Updates

• Stay updated on any changes in EIS requirements.
• Regularly review and update systems to stay compliant.

Each step is important for a smooth transition to the EIS. Businesses should approach this process carefully, anticipating any challenges and planning ahead. Getting expert help, especially for system integration and data security, is also a good idea to ensure all compliance requirements are fully met.

How to Choose the Best BIR EIS Software in the Philippines

Choosing the right BIR EIS software in the Philippines is crucial for businesses to meet regulatory requirements and streamline their tax reporting processes. The right electronic invoicing system BIR solution ensures compliance, simplifies invoicing, and enables accurate record-keeping, all while reducing manual effort.

Businesses can efficiently manage their invoicing and focus on growth by selecting a system aligned with BIR standards. Here are key points on how to choose the best BIR EIS software in the Philippines:

1. Ensure it complies with the Philippines’ BIR regulations for electronic invoicing.
2. Opt for software that integrates well with your current systems.
3. Choose a user-friendly platform to reduce training time.
4. Look for scalability to accommodate business growth.
5. Ensure strong customer support for troubleshooting.
6. Prioritize software with robust security features.
7. Consider transparent pricing without hidden fees.
8. Select a vendor with a solid reputation.
9. Ensure customization to suit business needs.
10. Look for advanced reporting and analytics tools.

Implement Your BIR EIS with Ease Using HashMicro’s Billing Software

Business people, alam mo ba na billing software ay lubos na inirerekomenda upang suportahan ang digitization ng BIR EIS? Therefore, let’s get acquainted with HashMicro, the best accounting software in the Philippines.

HashMicro’s accounting software provides an ideal solution for billing invoices for BIR EIS compliance. With over 1,750 clients across Southeast Asia, it has extensive customization options, free demos, user-friendly UI, and no extra costs for adding users.

Some of HasMicro’s accounting software features are like:

• Tax & discount management: With HashMicro’s e-Invoicing Software, you can automatically calculate taxes and discounts for specific invoices.
• Online payment management: Allow customers to make payments through an online payment gateway. Send receipts through the same portal.
• Invoice generation: Create invoices with personalized templates for different clients. Print them in PDF or send them directly via email.
• Credit limit management: Our system makes it easier for you to set different credit limits for each client based on the price of your product/service.
• Invoice approval & validation: The system allows you to process approvals and validate each invoice with a special price or discount.
• Real-time invoice reporting: Our robust e-Invoicing System lets you figure out the age of your invoices & quickly find unpaid invoices to determine your total income.

Conclusion

In conclusion, BIR EIS is crucial for businesses in the Philippines to ensure efficient tax compliance through automated invoicing and reporting. Having the best invoicing software in the Philippines, such as HashMicro’s accounting software, makes this process smoother and more accurate.

To make sure your business stays compliant while optimizing financial operations, try HashMicro’s accounting software today. Sign up for a free demo to experience its user-friendly interface, extensive customization, and added value without extra user costs.

FAQ About BIR EIS

• Does BIR accept an e-invoice?

  BIR accept e-invoices. All electronic receipts submitted to the BIR must be in JavaScript Object Notation (JSON) format. Businesses can upload their e-invoices through the Electronic Sales Reporting System (eSRS) portal. This web-based platform allows for the secure transmission of e-invoice data directly to the BIR.

• Who is required to use EIS?

  The Philippines is advancing the implementation of its new e-invoicing system (EIS). As of July 1, 2022, electronic invoicing has been required for the 100 largest taxpayers in the nation.

• What is the BIR regulation about invoicing requirements?

  The invoice must include the necessary details of both the seller and the buyer. It should also provide transaction specifics, such as the quantity, unit cost, description or nature of the service, and the applicable VAT rate/amount or exemption, in accordance with Section 6(B) of RR 7-2024.

• What is the penalty for no official receipt of BIR?

  The BIR imposes a penalty ranging from PHP 1,000 to PHP 50,000 and imprisonment for two to four years, as specified under Section 264(a) of the Tax Code.

• How does BIR detect tax evasion?

  The BIR can review essential documents, like articles of incorporation and annual financial statements, which are key to investigating or auditing corporate tax fraud.