If you run a business in Nepal, you have probably heard that electronic billing is now mandatory — and probably also heard three different versions of who it applies to. This is what the rules actually say, and what they mean in practice.
What “electronic billing” means here
Electronic billing is not the same as printing a bill from a computer. Plenty of shops produce a printed invoice from a spreadsheet, and that is not e-billing.
E-billing means issuing invoices from software that the Inland Revenue Department has approved for the purpose. The software controls the invoice format and numbering, prevents bills from being silently deleted, and transmits invoice data to the IRD as the sale happens.
That last part is the Central Billing Monitoring System, or CBMS.
Who must comply
Two different rules are at work here, and they are commonly run together. They answer different questions.
- Turnover decides whether you must move. A business with annual turnover of Rs. 10 crore or more is required to issue its invoices electronically, through approved software. Below that figure, adopting electronic billing is a choice.
- Billing by computer decides how you must do it. This rule is not about size at all. Any business that issues computerised invoices has to do so through IRD-approved software and meet the requirements that come with it, including transmitting to CBMS. There is no informal middle ground where a business bills from a computer but stays outside the system.
So the turnover figure tells you whether e-billing is compulsory. The decision to bill by computer at all — whether the law forced it or you chose it — tells you what you have to do about it.
Thresholds have been revised more than once in recent years, and the direction has consistently been downward, bringing more businesses into scope each time. Confirm the current figure with your accountant or directly with the IRD before making a decision.
Some sectors have their own arrangements. Hospitality has historically been brought in at a lower threshold than general trade, and banks and financial institutions are treated separately given their existing reporting obligations.
What happens when you cross the line
The awkward part is that turnover is measured over a year, so you generally discover you have crossed a threshold after it happened. At that point you need approved software running, your products and parties loaded into it, your opening balances entered, and your invoice numbering continuing correctly from where your old system stopped.
None of that is difficult. All of it takes longer than the notice period feels like it gives you, especially if it lands in the middle of a fiscal year while you are also trying to serve customers.
This is the practical argument for moving early rather than at the deadline: a business that adopts e-billing voluntarily chooses its own timing, migrates in a quiet week, and trains staff without pressure. A business that waits does all of the same work, in a hurry, while non-compliant.
What if you are below the threshold?
You are not required to move. The IRD actively encourages smaller businesses to adopt electronic billing voluntarily, but it remains a choice.
What is not a choice is how you do it once you decide. Billing by computer means using approved software and meeting the same requirements a larger business meets — the turnover figure changes whether you must adopt e-billing, not the standard you are held to once you have.
Most businesses that make the switch early do it for reasons that have nothing to do with tax:
- Stock figures that are actually correct, because every sale updates them.
- A customer ledger that answers “what do they owe us?” in seconds.
- VAT returns assembled from your own records instead of reconstructed at filing time.
- No migration scramble when the threshold eventually reaches you.
The compliance benefit is real, but it tends to be the fourth or fifth reason owners give afterwards.
What to check before choosing software
Whatever you choose, verify these directly rather than taking a sales claim at face value:
- Is it actually IRD-approved? Ask for the registration, and check it.
- Does it support CBMS integration? Approval and CBMS capability are related but not identical. If you are issuing computerised invoices, you need both.
- What is the plan when the internet drops? Some software queues offline and transmits later; cloud software needs a connection but runs from any device, including a phone on mobile data. Ask which design you are buying and whether it suits your location.
- Can it continue your existing invoice numbering? Mid-year migrations depend on this.
- Who fixes it when something breaks during business hours? A local support number matters more than a feature list.
In short
Electronic billing in Nepal is no longer a question of whether, only of when it reaches your business. The thresholds have moved steadily downward, and the work involved in switching does not change based on how urgently you need to do it.
If you are within sight of the threshold, moving now costs the same as moving later — and costs considerably less than moving late.
Lotussoft ERP is IRD-approved billing software with CBMS integration, covering billing and POS, inventory, and accounting in one system. Book a free demo to see what switching would actually involve for your business.