Ultimate Guide about Invoicing for Small Businesses | TranZact

Sep 20, 2021 in Documents



As soon as a probable business owner thinks about starting a business, the documentation part comes to in-process first. That he has to present his whole idea of a startup plan to others in some sort of format. And after that, he has to go for licensing and other legal work, which also requires documentation in every step. Further, when the business starts, there is another need for documentation, that's the Invoicing part that will go on till the end. Like for every sale, there will be Cash Invoices, Tax Invoices, and Proforma Invoices that will require a proper bill format to give the organization a standardized outlook.

That's when the small business owner worries a lot. They need help with their Invoicing needs and require knowledge about the bill formats and other document formats. What needs to be present in these documents.

And for that problem, we are providing the solution to the small business owners in this article. So let us read further to get the answers to your questions.

What is Tax Invoice?

The term tax invoice is not a new term for businesses. Every business owner knows about tax invoices. A tax invoice is like any other invoice or bill which the seller sends to the buyer when a sale transaction happens. The sellers need to be registered in GST to send this invoice as it includes the indirect tax (GST) on the product sold. And that's why the name Tax Invoice.

Tax Invoice Format

Tax Invoice Format

Read More about - What is GST Invoice & GST E-Invoicing-5 Problems SMEs face?

What is Cash Invoice?

Cash Invoice is also the same as other invoices. The thing that separates it from other invoices is that it gets prepared only when there is an immediate exchange of payment between buyer and seller for the products. And it gets implied for both tax invoices as per GST requirements and for ordinary invoices that are non-compliant with GST.

Cash Invoice Format

Cash Invoice Format

What is Proforma Invoice?

Proforma Invoice is a little different from regular invoices but, both GST-registered and non-registered businesses need it. It's a document that the seller prepares to provide the buyer an estimate about the total cost of products before supplying them. This invoice gives information to buyers about any commissions, applicable taxes, the weight of the shipment, shipping costs, etc. It serves as a document showing the supplier's commitment to the buyer about providing the products at a specific price.

Proforma Invoice format

Proforma Invoice Format

How to prepare an invoice in GST Composition Scheme?

In 2017, the Government of India launched the Goods And Services Tax (GST) system for Indian Taxpayers' betterment. As the earlier Indirect Tax regime was a little bit tough for the taxpayers to operate with it. And since GST's commencement in 2017, the GST Council and the Government taking many steps to make this tax regime burden-free for taxpayers. The Government, for small businesses, introduced the Composition Scheme for providing them relief. The Government's this plan helped lots of small businesses, and many opted for this scheme. After that, there are a lot of queries about how to prepare the invoices as per the GST Composition scheme.

So in the composition scheme, the Bill of Supply gets used in the place of tax invoice. And the details that need to be present in the Bill of Supply are -

  1. Name and address of the Composition Dealer.
  2. GSTIN of the Composition Dealer.
  3. Consecutive Serial Number containing only alphabets and/or numerals unique for a financial year.
  4. Date of the issue of Bill of Supply.
  5. Name and address of the recipient.
  6. GSTIN of the recipient if the recipient is a registered party.
  7. HSN code of the goods.
  8. SAC code of the services.
  9. Description of the goods.
  10. Description of the services.
  11. Value of the goods/ services.
  12. Discount/ abatement taken.
  13. Signature/ Digital Signature of the supplier or his authorized representative.
 Bill of Supply Format

Bill of Supply Format

These are the details that every Bill of Supply must-have. And for the particular Cash Bill of Supply, it can have all the information, can follow the Cash Invoice format.

How TranZact helps SMEs in all Invoicing Needs?

TranZact is a zero-effort digital transformation tool and platform for SMEs to digitize business processes right, from customer inquiry to dispatch. It provides GST services that help SMEs in their GST invoicing problems. TranZact takes care of all the documentation processes of the organization. It helps businesses in the preparation of Purchase orders, Quotations, RFQs, Order Confirmation, Tax & Cash Invoices, Ad-Hoc Invoices, Sales & Purchase Returns, and many other documents. Through its automated documentation process, communication channels form up. Further, it makes inter-department communication easier and error-free.

TranZact helps its customers in providing the best standard invoice/bill formats for their daily usage. And the users can add more fields of information in the invoices as per their needs.

TranZact helps its customers in providing the best standard invoice/bill formats for their daily usage. And the users can add more fields of information in the invoices as per their needs. Also, TranZact provides features like sorting goods out as per their Batch or Lot numbers or Barcodes, and these details are also present in the invoices. But they should go only for the best software as it's very essential for their success and growth.


TranZact is a team of IIT & IIM graduates who have developed a GST compliant, cloud-based, inventory management software for SME manufacturers. It digitizes your entire business operations, right from customer inquiry to dispatch. This also streamlines your Inventory, Purchase, Sales & Quotation management processes in a hassle-free user-friendly manner. The software is free to signup and gets implemented within a week.