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Clear's journey to conquer e-invoicing

How Clear built an enterprise-grade product with complex integrations and world-class performance for one of India’s biggest compliance changes in recent times For most Indians, 1st October 2020 was

2 months ago

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How Clear built an enterprise-grade product with complex integrations and world-class performance for one of India’s biggest compliance changes in recent times

For most Indians, 1st October 2020 was an ordinary day: the country in partial lockdown, people working from home, vaccination still a while away and the economy fighting to stay afloat. For a small team of passionate techies at Clear, the midnight of October 1 was indeed extraordinary. Because it’s the day we built and launched the software that would power one of India’s biggest compliance transformations.

For the uninitiated, e-invoicing is the law that mandates every B2B invoice to be electronically authenticated by the GST Network (GSTN) in real-time. This means that businesses need to upload their invoices, have them validated and e-way bill generated — entirely electronically — before the goods can leave the warehouse!

This is unprecedented in compliance law for two reasons. Compliance is almost always a consequence that happens post-facto, not a hindrance to conducting the business itself. For instance, if you make a wrong entry, you can still sell the product and adjust/pay a fine later. That’s not possible with e-invoicing. In fact, without proper authentication, you can’t even get the product to the market. E-invoicing makes compliance a prerequisite.

Moreover, it necessitates complete digitisation. Businesses can no longer scribble on sheets of paper and fix the books later. They need to submit accurate information across hundreds of fields in advance. This is a paradigm shift in not just compliance, but also business operations itself.

To be fair, e-invoicing has been a long-time coming. For years, there have been whispers in all corners. For years, there have also been false starts and postponements. Add to it the global pandemic, few expected the e-invoicing law to actually come into force.

But this time, the government was determined. It announced the first phase, making it mandatory for taxpayers with a turnover of Rs. 500+ crore to follow e-invoicing. Soon, this would become the norm for every business. Overnight, every business would need to equip themselves with advanced technology — with complex integrations and real-time processing capability — to just keep the lights on. The tech un-savvy small and medium enterprises (SMEs), who did everything on paper ledgers would need to go digital. The somewhat tech-savvy business that ran everything on spreadsheets or non-standard custom software would need more horsepower. In fact, even enterprises that use expensive ERP systems need to update.

To embrace e-invoicing successfully, businesses need only one thing: Robust purpose-built technology. We, at Clear, began building it.

What it takes to build complex compliance tech

Our journey, however, began long before 01 October 2020. It’s tempting to say that we started almost 10 years ago, when we began with the mission to “make it easy for Indians to file their taxes, every year.” But our e-invoicing journey started a little later.

In 2019, when the news around e-invoicing was in the air, Clear set up a small team of product owners, chartered accountants and developers. We did extensive research — met the officials at the NIC in Bangalore to understand the landscape. We spoke to enterprises, who were already customers using our GST solution, to gain a sense of the market. We experimented with the APIs that the government opened up. We put together a pilot and took it to the market for validation. We demo-ed it to CFOs and business leaders. We collected feedback. Our agile and dynamic development teams optimised the product, getting it ready for launch.

At 12 am on the first of October 2020, with 700+ integrations across dozens of third-party ecosystems, various ERPs and government APIs, we took ClearTax e-invoicing live.

In retrospect, building our e-invoicing product was an endeavour unlike any other. In the middle of a raging pandemic, our customers were not only getting used to our product but they were also getting acquainted with the e-invoicing law itself. In essence, we were building a boat to carry someone who is seeing the sea for the first time.

So, we got all hands on deck to ensure an impeccably smooth transition for our customers.

In parallel, our engineering teams began working on improving the product and strengthening it for scale. We reimagined the user experience to make sure that every customer can perform every task they need — from registration to filing — right from within the ClearTax e-invoicing app. We upgraded the tech stack too for lightning-fast performance.

We achieved all this with no disruption to the customer at all. ClearTax e-invoicing 2.0 was completely backward compatible. No one was re-onboard. While we pulled the boat from under their feet and replaced it with a new one, no one faced any trouble.

8 milliseconds response time

5000+ IRNs per minute

1 lakh e-invoices/e-way bills at a time

200,000 document downloads in one go

99.2% P0 functionality success rate

55.3 customer NPS score

The e-invoicing product is an important milestone in Clear’s journey. While we began as a customer tax filing company, our GST solution established us as a strong B2B fintech player. The e-invoicing product goes one step further to strengthen our position. Over 3,500 customers, including Fortune 500 companies, trust us today. We are processing about 10 per cent of India’s B2B invoices, with over $300 billion trade value.

What’s in store ahead for Clear

Not just that, while building e-invoicing, we also transformed ourselves into a fundamentally more agile, product-driven technology company. We performed architecture reviews more carefully. We evaluated performance-cost trade-offs more comprehensively. We set up processes for how systems need to be built. We brought together enough resources to build anything that’s used by more than one team, accelerating reusability. We recreated the platform team.

We also set for ourselves high standards for engineering KPIs and aligned them clearly to business goals. This improved our quality standards. Today, even if there is a P4 bug, the product doesn’t go into production. This empowered our QA and CA teams to contribute proactively to the product. For the first time in the history of Clear, we completely sunset the first version of our e-invoicing product, migrating every single customer to the new and improved version.

As a software product and as a technology company, e-invoicing takes us one step further in our mission of building India’s largest B2B business network to solve for use cases across procurement, invoicing, payments, collections and more. E-invoicing will also power our global ambitions, catapulting us to the next level in our journey.

Sujaini Biswas

Published 2 months ago