Autosave the Purpose Code for Future Invoices With Skydo
According to a report by PwC, India has emerged as the largest global market for cross-border payments. While it benefits the economy and the business landscape, it also increases the risks of money laundering, tax evasion, and other fraudulent activities.
Therefore, the Reserve Bank of India (RBI) has mandated the use of purpose codes for each foreign inward remittance. Purpose codes or payment codes are unique to each category of services Indian exporters offer to foreign clients. These codes indicate the nature of service provided to the foreign client by the Indian exporter or the purpose of foreign inward remittance.
In the case of incorrect or missing purpose codes, banks may
- Either reject the payment and send it back to the source or
- Keep it on hold until the bank verifies the purpose of the transaction
In either case, your payments get delayed.
Skydo, a modern cross-border payment platform, aims to resolve this issue. It adds the purpose code to the invoices as per your previous input. Thus, it facilitates quicker and seamless payments for exporters and freelancers by mitigating the risk of payment cancellations or delays. This blog discusses Skydo’s autosave purpose code feature in-depth and how it supports the development of a seamless financial ecosystem.
Skydo: Simplifying Purpose Code Allocation
According to Salesforce, business automation helps organizations save 3.6 hours per week, which amounts to 23 extra days yearly. This figure is extremely significant because it enables businesses to boost efficiency and productivity.
Payments and invoicing is one of the major areas where Indian businesses require automation. They spend long hours navigating through the complex cross-border payment landscape. However, Skydo serves as a one-stop solution for all concerns related to cross-border transactions. It automates tedious processes like invoice generation, payment tracking, sending reminders, and even adding purpose codes to invoices.
Therefore, instead of spending time and resources on manual tasks, using Skydo’s comprehensive payment automation features can streamline cross-border transactions.
Steps to Autosave Purpose Code in your Invoice with Skydo
If you cater to several foreign clients and send out invoices regularly, manually entering purpose codes in hundreds of invoices over a long period can be challenging. In fact, there is tremendous scope for potential human errors.
But with Skydo, you can eliminate the manual effort and mitigate risk because it saves the purpose code in its database and prefills it corresponding to the services offered.
Let’s understand the step-by-step process of creating an invoice on Skydo and how the purpose code feature works:
- You can find the complete list of purpose codes for cross-border transactions here on the RBI's website or any other authorized bank's website.
- For all new services you offer to the client, you must manually enter the purpose code for the first time while creating the invoice on the Skydo payment platform.
- Once you add the purpose code for a specific transaction or service, it gets saved in the Skydo payment platform database. When you add the same service next time while creating an invoice, you have to click on the section to add the purpose code, select the appropriate purpose code from the drop-down, and the code is pre-filled to the invoice.
- The next and final step is finalizing the e-invoice and sending it to the customer through Skydo for seamless cross-border transactions.
Realizing Efficiency Gains and Compliance
As explained earlier, wrong purpose codes can cause failure or delays of cross-border transactions because banks flag such transactions, considering them to be made for tax evasion purposes. Consequently, incorrect or missing purpose codes impact business cash flow, making it difficult to perform business operations smoothly and scale.
On the contrary, Skydo adds the purpose code corresponding to the input provided by the service owners. The accuracy helps businesses receive forward inward rendition remittance on time. Thus, it reduces business risk and allows businesses to grow rapidly.
Moreover, accurate purpose codes through Skydo also help businesses adhere to regulatory compliances, reducing the risk of hefty penalties. It also enables businesses to contribute to a smoother global financial ecosystem by facilitating seamless cross-border transactions.
Purpose codes issued by the RBI are important for a stable financial ecosystem in the country because these codes enable authorized banks and other regulatory authorities to monitor the flow of foreign funds in India. It helps detect and prevent fraudulent cross-border payment transactions.
Moreover, using the correct purpose code empowers businesses to receive foreign inward remittances with minimum hassle, thus promoting a consistent cash flow, which helps businesses scale effortlessly.
However, manually adding the correct purpose codes is inconvenient and increases non-compliance risk because of errors. Automated purpose code generation by Skydo helps businesses overcome these challenges and focus on core business activities.
Join the Skydo payment platform today to experience seamless cross-border transactions and mitigate financial and non-compliance risks!