eTIMS now supports Reverse Invoicing (RI)
Reverse Invoicing seeks to streamline suppliers eTIMS compliance requirements by enabling your organization to generate invoices on their behalf based on the contractual agreement between each supplier and your organization.
Difference between a normal invoice and a reverse invoice
Normal invoice details
A typical (normal) invoice is generated by the supplier then sent to the buyer, matching a purchase of a good or service.
The invoice may or may not contain customer details of the buyer (eTIMS supports invoices without customer details).
Reverse invoice details
A reverse invoice is still generated by the supplier then sent to the buyer, matching a purchase of a good or service, ONLY that the triggering is done by the buyer.
In short, a reverse invoice is a normal invoice that's triggered by the buyer.
For a normal invoice, a buyer would need to wait for a supplier to generate and share an invoice, while for a reverse invoice, a buyer generates the invoice on behalf of the supplier.
Reverse Invoice considerations
Reverse invoicing is not enabled by default (see section on reverse invoice enablement below) and is highly regulated by the KRA eTIMS team due to the potential risks of fraud due to its nefarious potential use.
Below are the steps required to go live with reverse invoicing:
Demo/Guide
Understand reverse invoicing in DigiTax by reading this guide or requesting a demo from our teamTesting Phase One:
Create a test business
Request for Reverse Invoicing enablement
Create a supplier, reverse invoice, and reverse credit note
Optionally, test the actions in the previous step (2.c.) via API
Commercial proposal
Engage in a commercial conversation with the DigiTax business development team.Meeting with KRA
Our team will initiate a meeting with KRA. We will highlight possible questions you'd expect (including proof of the process you'll use to get consent from suppliers)Testing Phase Two:
Go through the steps in Step 2: Testing Phase One - with your KRA PIN's sandbox credentialsKRA UAT phase
User acceptance testing by the eTIMS teamApproval
Go ahead from KRA for you to generate reverse invoices in production
Reverse Invoice on DigiTax Dashboard
This section is relevant for steps 2, 5, and 6
Prerequisites
Sign up/Log in
Create a Profile
Request for reverse invoice enablement for your business
In our case, we'll use a test/sandbox business.
Once you've created a test business, in the chat request for reverse invoicing enablement. You are welcome to copy the template below:
Hello DigiTax support, please enable reverse invoicing for the business: <KRA_PIN>, <business name> created on <date and time> by email <your email>.
The screenshot below show where you'd source these details:
Once enabled, three additional modules become visible on the business level:
Reverse Invoices
Reverse Credit Notes
Suppliers
Before reverse invoice is enabled.
After reverse invoice is enabled.
Create suppliers
A reverse invoice requires a supplier and you will be the customer (buyer) of the supplier.
A reverse invoice always has a customer (which will be your business).
Supplier details include:
Name
KRA PIN
Email address (optional)
Phone number
Create Reverse Invoice
Reverse Invoice actions
Create Reverse Credit Note
Testing Phase Two
After meeting with the KRA team and them approving your presented use case, they email you credentials that our technical team uses to set your KRA sandbox credentials.
These credentials enable you to generate test reverse invoices with your KRA PIN instead of DigiTax's PIN as was shown in previous steps.