Reverse Invoicing FAQs: Here is Everything You Need to Know About Reverse Invoicing
A simple guide answering common questions about reverse invoicing
You might have heard about Reverse Invoicing maybe in a tax conversation, from your accountant, or while trying to understand eTIMS compliance. And if your first reaction was “Wait… what is Reverse Invoicing?” you’re not alone.
Reverse invoicing sounds technical, but at its core, it solves a very practical business problem
In this article, we break it down through the most frequently asked questions about reverse invoicing right now so you can understand exactly how reverse invoicing works and why it matters for your business.
FAQ 1: What exactly is Reverse Invoicing?
Reverse Invoicing is an eTIMS compliance mechanism where the buyer generates the tax invoice on behalf of the supplier for goods or services received.
Initially, with standard invoicing invoices are issued only by the supplier to the buyer but with Reverse Invoicing, Kenya Revenue Authority(KRA) has handed the consent to the buyer. This ensures that the transaction is captured in the KRA system immediately, regardless of the supplier’s technological capacity.
FAQ 2: Why was Reverse Invoicing Introduced?
Reverse invoicing was introduced to address practical challenges faced by large enterprises working with small businesses, traders, and small-scale farmers, many of whom:
are not financially or technologically savvy
are unable or unwilling to use eTIMS directly
may struggle with formal tax-related documentation
operate informally despite being part of the value chain for larger businesses.
Because these small suppliers often fail to issue compliant invoices, larger taxpayers who purchase from them face challenges when claiming allowable deductions or input tax.
FAQ 3: What do you actually need to get started with Reverse Invoicing?
If you’re thinking about implementing reverse invoicing, there are a couple of important steps to get right first.
You’ll need KRA approval
Before anything goes live, your business has to be vetted by the Kenya Revenue Authority (KRA) and you receive consent to invoice on behalf of all you suppliers.
FAQ 4: Can a Supplier ID be used instead of a PIN in Reverse Invoicing?
At the moment, only a KRA PIN is supported for reverse invoicing.
This means that when generating a reverse invoice, you must input the supplier’s valid PIN.
That said, there is room for improvement: Support for using an ID instead of a PIN may be introduced in the future as the system evolves.
For now, it’s best to ensure that any supplier you’re reverse invoicing has a valid KRA PIN to avoid delays or failed transactions.
FAQ 5: Does DigiTax offer Reverse Invoicing?
Yes, DigiTax supports Reverse Invoicing as part of its eTIMS compliance solution.
We have designed to make the entire process seamless, from invoice creation to supplier verification and submission to KRA. So instead of handling reverse invoicing manually, everything is automated within one system.
What does DigiTax handle for you?
DigiTax’s Reverse Invoicing solution key capabilities include:
• System-to-system integration with ERPs, SAP, and billing platforms
• Automated supplier consent workflows as required by KRA.
• Centralized dashboards for tracking invoices, approvals, and eTIMS submissions
• Real-time reconciliation and reporting for finance and compliance teams
FAQ 6: How much does DigiTax Reverse Invoicing cost?
Pricing for reverse invoicing with DigiTax isn’t a one-size-fits-all.
It typically depends on:
Your business size
Supplier transaction volume - For this we offer Reverse Invoicing to a business transacting with 70+ suppliers.
The level of ERP integration required with your current ERP system (e.g. SAP, Odoo, QuickBooks, ERP Next, Oracle and many others).
What should you really be thinking about?
Instead of just the cost, it’s worth considering the value:
Avoiding penalties from non-compliance
Protecting your VAT claims
Saving time on manual supplier invoice follow-ups
Staying consistently audit-ready
Want exact pricing?
The best way to get accurate pricing is to request a demo or consultation with the DigiTax team, so they can tailor a solution based on your business needs.
FAQ 7: Which sector is DigiTax Reverse Invoicing designed for?
The solution is specifically designed for sectors where enterprise buyers routinely transact with large numbers of small, informal, or rural suppliers.
In the agriculture sector, it enables organizations procuring from smallholder farmers across the country.
In the manufacturing sector, it supports firms managing extensive raw material and service supplier networks.
In the insurance sector, it assists companies managing diverse vendor and service provider payments.
Across the SACCO sector, it empowers cooperatives engaging informal service providers and contractors.
We built this for you, and we are excited to see the compliance confidence it brings to your business.
Our team is ready to walk you through the feature and get you set up. Book a free demo or reach out to us directly: