Introduction
E-invoicing is no longer a strange definition. Despite some discord, e-invoicing is expected to become a mandatory practice in the coming years. According to billentis' statement in the e-invoicing journey 2019-2025, by 2025, "80% of organizations will be forced either by legislation or important trading partners to exchange invoices just in electronic format," (B. Koch, 2019).”
This statement is not redundant. In Malaysia, e-invoicing is officially mandatory from 1 August 2024. All taxpayers with an annual turnover of 100 million MYR (about 21 million USD) are required to use the new model Continuous Transaction Control CTC. Your business needs to send e-invoicing to the tax authority before sending it to customers/partners.
The story of e-invoicing has received a lot of controversy. But there is one thing you must admit: Businesses need to comply with the law to survive. You need to know what level your business is in and find the necessary solutions to optimize the e-invoicing process so that it does not affect business operations much.
The article below will help you understand the current status of your business and important information about e-invoicing solution.
Is Your Enterprise Ready for e-Invoicing?
Before looking to deploy an e-invoicing system professionally, you need to understand what your business has and doesn't have with an e-invoicing process.
Control Financial Capacity
Start by assessing your business on a financial basis to see if it meets the thresholds set by Malaysian government regulations. It includes a thorough review of your business's 2022 financial statements to determine how your turnover levels will fit into an electronic invoicing program.
As an example, if the turnover of your enterprise exceeds 100 million RM, you will need to start using e-invoicing from 1st August 2024. But if it is just over 25 million RM, you can start later, from 1st January 2025. Turnover will also come with mandatory regulations for each norm.
Understanding this helps you plan the timeline and process in detail to comply with the law and avoid last-minute rush.
ERP System Compatibility
Evaluate your current ERP software infrastructure and determine if it can seamlessly integrate with your electronic payment/invoice processing gateway. This involves a consultation process with your IT department or your e-invoicing solution providers in Malaysia to determine upgrades or integration of third-party applications, if necessary.
If your ERP system can automatically create electronic invoices to ensure compliance with regulatory standards, it will save time, reduce errors and not disrupt any current work processes. Otherwise, you will need a certain time and payment source for processing.
Understand the Compliance Requirements Regarding E-invoicing
Each e-invoicing method has specific standards related to format, transmission protocol, or separate principles. Understanding this knowledge is imperative to ensure your e-invoicing clearly meets regulatory standards and is processed correctly by the IRBM portal.
A detailed understanding of the process also helps your business avoid rejection due to legal compliance issues. It's like knowing the rules of the road before you start driving - you don't have to take unnecessary detours to get to your destination.
Knowledge and Experience for Your Employees
Personnel readiness is also a necessary factor for your business to successfully deploy electronic invoices. You need to collect documents and conduct comprehensive training sessions to familiarize your accounting staff with newly updated e-invoicing tools.
Of course, this process will take a lot of time and effort. Therefore, if it is too expensive, you should find a reputable e-invoicing solution provider to thoroughly handle this process, as well as provide in-depth consulting and training for your personnel.
Assess Needs for Automation Services
Depending on the volume of e-invoicing your business can handle, you may also want to consider using automation services. Partnering with an e-invoicing solution provider is a way to optimize this automation process in many aspects like reducing manual effort and increasing e-invoicing operational efficiency.
Of course, you must request thorough advice from providers to determine whether you really need this system, and how it can bring significant benefits to your business.
Preparation before the journey to conquer e-invoicing acts as a must-read checklist before each flight. By ensuring every element is in place, that's when you can confidently start using e-invoicing as a necessary tool to run your business successfully, not just as an obligatory condition.
E-Invoicing Solution: General Services You Must Know
After assessing the readiness level of your business, if you still feel a little anxious and hesitant, or feel a bit overwhelmed while your business is still operating, that's when you should consider an e-invoicing solution. These solutions streamline the e-invoicing process, ensuring efficiency, accuracy and legal compliance.
Some familiar services related to e-invoicing solution:
Automatically Create Invoices
The e-invoicing solution includes the ability to automatically generate e-invoicing based on data from the ERP system. This automation reduces manual entry errors and saves significant time.
Instead of spending hours entering details of each item in an invoice, the relevant department in your business can reduce the implementation time to just 15 minutes (still ensuring the information fields are accurate). Business decisions will also be made better and more comprehensively instead of just focusing on repetitive data entry.
Authenticate E-Invoicing
One of the important e-invoicing solutions is invoice authentication. This process includes verifying all required fields which are complete and formatted correctly. They have undergone extensive testing and ensure compliance with tax regulations.
For example, the system can automatically validate VAT-related calculations and check that customer information matches your records. It prevents rejections and delays in processing time.
Data Integration
E-invoicing solution also ensures seamless data integration with financial systems for effective processes. It helps data streams communicate with each other smoothly and are synchronized across all your systems.
Once a sales transaction is recorded in your ERP system, for instance, the corresponding invoice can be created, validated and sent automatically without any manual intervention. It maintains consistency and accuracy throughout your financial data.
Electronic Delivery
You can also send e-invoicing directly through secure electronic means such as customer portal or email, with an e-invoicing solution.
This service completely eliminates the need to send paper mail (in cases where it is not absolutely necessary), helping to reduce postage costs and delivery times. Instead of waiting for days to send the letter and even risking it being lost, you can simply send the e-invoicing to the customer's email box (after being authenticated by the competent authority), making it available for instant payment and review.
Real-time Tracking
E-invoicing solution includes real-time visibility of invoice processing status. This capability helps you manage cash flow more effectively with detailed information such as which invoices have been sent, received, viewed and paid.
Proactive monitoring thanks to automatic notifications allows you to closely control invoice status and take timely measures if necessary.
Storage and Retrieval
E-invoicing solution allows you to easily store e-invoicing and retrieve them quickly. It ensures all invoices are stored in a centralized and easily accessible location.
If you need to retrieve unusual invoices to audit or resolve a dispute, you can quickly search the archive by invoice number, date, or customer name. Your e-invoicing will appear instantly, helping you have all the necessary documents at your fingertips.
Analysis and Reporting
Detailed analytics and reporting capabilities help you identify trends, measure performance and optimize efficiency in the e-invoicing process. Using an e-invoicing solution, you can analyze the average time to pay invoices, identify customers who frequently pay late, or monitor the overall efficiency of your invoicing process.
Having a comprehensive and holistic view of your e-invoicing setup and operations allows you to make appropriate improvements based on data. The processing process, therefore, also becomes faster and more efficient than ever.
Customer Support
When choosing to use an e-invoicing solution, you will have more peace of mind in case you encounter technical difficulties, need help with integration, or have questions about specific functions.
The customer support of reputable e-invoicing solution providers always ensures timely support, helping the e-invoicing process always go smoothly and without suddenly dangerous incidents.
Important Features for e-Invoicing Solution Providers
To choose a best suited e-invoicing solution provider, you need to clearly understand the criteria to truly cooperate with a matching partner in all aspects. It will help you quickly streamline the e-invoicing process.
Ability of Extension
This criterion is especially important for growing businesses. E-invoicing solution providers in Malaysia should be capable of handling your current e-invoicing volume and easily scale as your business expands. Providers need to propose appropriate and practically implementable solutions related to e-invoicing without affecting the overall performance of the business.
A wardrobe can be expanded as you have more clothes - it's a problem you need to find the answer to from the beginning with your e-invoicing provider. You should look for partners who can grow alongside you.
Reputation and Experience
When choosing an e-invoicing solution provider, you should really care about their reputation and experience. Choose companies with a proven track record in consulting and successfully implementing e-invoicing in other businesses, of the same size or in the same industry.
Once they have a lot of experience, they will easily answer and handle challenges similar to your business case. The process will get much quicker and easier from here.
Customer Support and Training
Strong customer support and comprehensive training programs are essential for a smooth transition to e-invoice. Make sure your e-invoicing solution providers offer rich training resources, including webinars, tutorials, and on-site training sessions.
Additionally, their customer care should always be available to resolve any issues and queries.
The provider should always be a personal coach who not only helps you get started but is also available to offer advice whenever you need it, ensuring you stay on track on the e-invoicing journey.
Compliance and Regulatory Support
Compliance with local and international regulations is an important aspect of e-invoicing. Your providers should provide solutions that comply with the latest sanctions, including tax laws and regulations related to data protection.
They should also handle regularly updated information to ensure ongoing compliance, as legal advice prevents any potential problems related to e-invoicing.
Top 5 Best e-Invoicing Solution Providers in Malaysia
Let’s take a look at the top 5 e-invoicing solution providers in Malaysia, which are chosen based on the experience of our experts and also the customers’ feedback. This list helps you speed up the process of choosing the right provider.
A1 Consulting
A1 Consulting is a trusted partner of Odoo ERP - comprehensive ERP management software with many available features, including e-invoicing. By providing complete services related to Odoo services in general and operational solutions related to e-invoicing in particular, A1 Consulting always ensures that your transition to e-invoicing will go smoothly.
Including key services closely related to Odoo ERP: Go Invoicing Now (optimize LHDN-compliant e-invoices issuance process), Integrate Easily (seamlessly integrate with Malaysian accounting software like SQL, UBS or AutoCount) and full ERP system (a comprehensive ERP solution), A1 Consulting ensures to simplify the business's e-invoicing release journey, fully complying with LHDN requirements.
ClearTax
ClearTax is one of the highly rated e-invoicing solution providers in Malaysia. This company provides comprehensive support as a middleware to seamlessly connect your ERP/POS system to IRBM cloud, ensuring 100% IRBM compliance.
Key features of ClearTax include dedicated account management, data validation with a 99.99% success rate, rapid ERP integration within 4-6 weeks, and maximum data retention for 7 years. Some of ClearTax's value-added services in e-invoicing solution include error reporting, QR code generation, and using SMS and WhatsApp to send B2C invoices.
Esker
Esker offers special e-invoicing solutions that ensure lower costs and faster payments. Their platform provides interoperability with any system, flexibility for customers, and global regulatory compliance across more than 60 countries. Esker's outstanding expertise in e-invoicing helps businesses in Malaysia send and receive e-invoicing effectively, overcome challenges and quickly achieve success on a global scale.
BDO Malaysia
BOD Malaysia provides many comprehensive services, helping businesses deploy e-invoices quickly. Their services include gap analysis to evaluate current invoicing procedures, overall process management to ensure timely implementation with accounting software vendors, and assessment of system readiness to comply with IRBM requirements.
BDO Malaysia's improvement and processing of e-invoicing helps reduce costs and ensure reliability, which has been proven from 2020 to present.
ipay88
ipay88 offers game-changing e-invoicing solutions that transform financial processing by improving efficiency, accuracy and cost savings. Multiple payment options are also provided by ipay88, which enhances customer experience with secure and hassle-free payment methods.
With advanced fraud mitigation technology, merchant protection and dedicated support, ipay88 helps Malaysian businesses focus on growth of e-invoicing, while benefiting from our partners' outstanding marketing campaigns and their payment.
Final Thoughts
E-invoicing solution is the method chosen by many Malaysian business owners, especially when the earliest time to deploy e-invoicing is early August 2024. This is a process that can take quite a while to become familiar, but it certainly plays an important role in business operations as well as gradually pushing core activities onto the path of effective digital transformation.
With the above content, we hope you have somewhat had an overall view of e-invoicing solutions as well as an image of high-qualified providers in Malaysia. If you have any other questions, don't hesitate to get in touch with us, A1 Consulting. As a trusted Odoo partner, we are ready to consult and help you step firmly on the path of e-invoicing development.
