Wholesale and distribution businesses operate with high transaction volumes, tight margins, and long credit cycles, often while managing inventory, logistics, and multiple supplier relationships at the same time. With the Inland Revenue Board of Malaysia (IRBM) enforcing mandatory e-invoicing, compliance expectations are rising and invoicing accuracy is under greater scrutiny. Unlike many service-based sectors, wholesalers face a higher operational impact due to frequent B2B transactions, complex billing structures, and common adjustments such as deposits, credit terms, and returns. In this blog, we explain how e-invoicing applies to wholesale and distribution businesses in Malaysia, the key transaction scenarios involved, and how to prepare for compliance without putting additional strain on cash flow or daily operations.
Key Takeaways
Mandatory Compliance
All wholesale and distribution transactions must be supported by e-invoices via IRBM’s MyInvois platform.
Key Transactions Covered
Includes B2B sales, deposits, credit terms, delivery fees, returns, and expense invoices.
Preparation Steps
Audit workflows, assess portal/API suitability, document procedures, assign roles, and test e-invoicing early.
Cash Flow Consideration
E-invoicing does not accelerate payments—plan working capital and forecast cash flow post-implementation.
Government Support
Microloans, grants, automation funding, and tax deductions can offset implementation costs for SMEs.
Malaysia’s Mandatory E-Invoicing Framework
What e-invoicing means under IRBM
Under the Inland Revenue Board of Malaysia (IRBM), E-invoicing refers to the digital issuance, validation, and submission of invoices in a structured format. Each invoice must be transmitted to IRBM for validation before it is considered compliant. This applies to both income and expense transactions, creating a standardised and traceable invoicing process for tax reporting and audit purposes.
MyInvois is the official platform used to submit and validate e-invoices with IRBM. Businesses can issue e-invoices either through the MyInvois Portal or via system integration using the (IRBM)’s MyInvois system. For wholesale and distribution businesses with high transaction volumes, system integration is often more practical, as manual submission can be time-consuming and prone to errors.
Implementation timeline and key phases
Malaysia’s e-invoicing rollout follows a phased approach. Businesses with annual revenue above RM100 million were required to comply in the earlier phases. From 1 July 2025, mandatory e-invoicing is expected to apply broadly to businesses, including small and medium-sized wholesalers and distributors, subject to IRBM’s final implementation thresholds and enforcement guidelines. This timeline gives businesses a limited window to review systems, update processes, and train staff before full enforcement.
Applicability to wholesale and distribution businesses
E-invoicing applies to all wholesale and distribution activities, regardless of industry or customer type. Whether you supply FMCG, food products, industrial materials, or consumer goods, every sale, purchase, and expense must be supported by a valid e-invoice. Even if your customers are mainly retailers or restaurants, your business is still required to comply with IRBM’s e-invoicing framework for every transaction.
Read: Malaysia E-Invoicing System: What Businesses Need to Know
Who Must Comply in the Wholesale and Distribution Sector
Malaysia’s mandatory e-invoicing requirements apply broadly across the wholesale and distribution supply chain. If your business issues invoices for goods or related services, compliance with IRBM’s e-invoicing framework is required.
1. FMCG and consumer goods wholesalers
Wholesalers supplying fast-moving consumer goods, household items, and general merchandise must issue e-invoices for every B2B sale. This includes bulk orders to retailers, resellers, and corporate buyers, as well as charges for delivery, packaging, or handling services.
2. Food and beverage distributors
Food and beverage distributors, including those supplying restaurants, cafés, hotels, and catering businesses, are fully covered under the e-invoicing mandate. Even where transactions are frequent and low-margin, each sale, deposit, or credit transaction must be supported by a validated e-invoice.
3. Import-export and trading companies
Import-export businesses and trading companies involved in cross-border supply chains are also required to comply. This includes local invoicing for imported goods, resale transactions, and supporting expense invoices such as freight, warehousing, and customs-related services.
4. Logistics, fulfilment, and bulk packaging providers
Businesses providing logistics, fulfilment, storage, or bulk packaging services must issue e-invoices for service charges billed to wholesalers or distributors. These invoices form part of the compliance chain and must meet IRBM’s validation requirements.
5. Clarification on B2B focus and retailer clients
E-invoicing obligations are based on the issuing business, not the size or type of customer. Even if your clients are mainly retailers, restaurants, or small businesses, you are still required to issue e-invoices for every transaction. The B2B nature of wholesale operations does not reduce or exempt your compliance responsibilities under IRBM rules.
Wholesale Transactions That Require E-Invoices
Under IRBM rules, wholesale and distribution businesses must issue e-invoices for both income and expense transactions. This applies regardless of payment timing, transaction size, or customer type. Proper classification and timely issuance are essential to remain compliant.
1. Income Transactions
B2B product sales
All product sales to retailers, resellers, and corporate buyers must be supported by an e-invoice. This includes bulk orders, recurring supply contracts, and one-off transactions across all wholesale categories.
Delivery, handling, and service charges
Any additional charges billed to customers, such as delivery fees, packing services, or storage costs, must be included in the e-invoice. These charges should be itemised clearly to reflect the full value of the transaction.
Credit sales and instalment arrangements
For sales offered on credit terms or instalment plans, the e-invoice must be issued at the point of sale. The timing of payment does not affect the obligation to issue a validated e-invoice.
Deposits and pre-orders
Where customers pay a deposit or place a pre-order, an e-invoice is required for the amount received. A separate e-invoice must then be issued for the remaining balance once the transaction is completed.
2. Expense Transactions
Inventory purchases from manufacturers
Purchases of goods from manufacturers or suppliers must be supported by valid e-invoices. These expense e-invoices form part of your compliance records and are critical for accurate reporting.
Freight, warehousing, and logistics fees
Charges related to transportation, storage, and distribution services must be documented with e-invoices. This includes local freight, third-party logistics providers, and warehousing services.
Equipment leasing and maintenance
Leasing costs for machinery, vehicles, or equipment, as well as maintenance and repair services, require e-invoices issued by the service provider.
Utilities, payroll, insurance, and subscriptions
Utilities, insurance premiums, and software subscriptions must be supported by compliant e-invoices where applicable. Staff-related costs, including payroll, should follow IRBM’s applicable reporting and documentation requirements rather than standard e-invoicing.
How E-Invoicing Applies to Common Wholesale Scenarios
Wholesale and distribution businesses often deal with complex transaction structures. Under IRBM rules, e-invoicing must reflect the commercial reality of each transaction while meeting strict validation requirements.
Bulk orders and split deliveries
For large bulk orders, an e-invoice must be issued once the sale is confirmed. This applies even if the goods are delivered in multiple batches. Where deliveries are split, businesses must ensure the original e-invoice accurately reflects the agreed transaction value and any subsequent adjustments are properly documented.
Deposit-based and pre-order sales
When customers place pre-orders or pay deposits before full delivery, e-invoicing applies at each stage. An e-invoice is required for the deposit received, followed by a separate e-invoice for the remaining balance once the order is fulfilled. Clear tracking is important to avoid duplication or under-reporting.
Credit term sales and invoicing timing
For sales offered on 30 to 90-day credit terms, the e-invoice must still be issued at the point of sale. Payment timing does not change the invoicing obligation. This means wholesalers must recognise the transaction early, even though cash may only be received much later.
Itemisation of delivery and handling fees
Any delivery, packing, storage, or handling charges added to a sale must be itemised clearly in the e-invoice. Proper itemisation supports accurate reporting and reduces the risk of queries during audits or reviews by IRBM.
Returned goods, refunds, and credit note issuance
When goods are returned or prices are adjusted, a credit note e-invoice must be issued to reflect the change. This ensures the original transaction is corrected in a compliant manner and that financial records remain accurate and traceable.
Read: Malaysia E-Invoicing System: What Businesses Need to Know
Practical Steps to Prepare for E-Invoicing Compliance
Early preparation helps wholesale and distribution businesses reduce disruption and avoid compliance gaps when e-invoicing becomes mandatory. The steps below focus on practical actions that support accuracy, efficiency, and audit readiness.
1. Reviewing current accounting and invoicing workflows
Start by mapping your existing invoicing process from sales order to payment collection. Identify where invoices are created, approved, and recorded. Pay close attention to manual steps, duplicate data entry, and offline processes, as these areas carry higher risk once e-invoicing validation is required by IRBM.
2. Assessing MyInvois API or portal suitability
Evaluate whether your transaction volume is better suited to the MyInvois Portal or API integration. Businesses with high daily B2B transactions usually benefit from API integration to automate submission and validation. Smaller wholesalers or those with lower volume may start with the portal while planning for system upgrades later.
3. Setting procedures for deposits, returns, and adjustments
Document clear procedures for common wholesale scenarios such as deposits, partial deliveries, returns, and price adjustments. Each scenario must follow IRBM requirements, including issuing separate e-invoices or credit note e-invoices where applicable. Standardising these steps helps prevent errors and inconsistent reporting.
4. Assigning compliance roles internally
Define who is responsible for issuing e-invoices, monitoring validation status, and handling corrections. Clear role assignment between sales, operations, and finance teams reduces confusion and ensures accountability. This is especially important for businesses managing credit terms and high transaction volumes.
5. Testing e-invoicing before mandatory deadlines
Begin testing e-invoicing processes as early as possible. Trial submissions through the MyInvois Portal or test environment help identify system issues, data gaps, and workflow bottlenecks. Early testing allows time for adjustments before enforcement deadlines, reducing last-minute compliance pressure.
Managing Cash Flow During the E-Invoicing Transition
While e-invoicing improves transparency and compliance, it does not change the commercial realities of wholesale operations. Managing cash flow remains a critical priority during and after the transition.
Why e-invoicing does not solve payment delays
E-invoicing ensures invoices are issued, validated, and reported accurately to IRBM. However, it does not accelerate customer payment behaviour. Wholesalers offering 30 to 90-day credit terms will still face the same collection timelines. In some cases, clearer reporting may highlight delays more visibly, but the underlying cash gap remains.
Working capital strain from stock, freight, and payroll
Wholesale businesses must continue funding inventory purchases, freight costs, and payroll upfront. With e-invoicing, expenses are recorded and validated promptly, increasing short-term visibility of cash outflows. Without sufficient working capital buffers, businesses may feel additional pressure during peak ordering or seasonal demand periods.
Importance of cash flow forecasting post-implementation
After e-invoicing goes live, accurate cash flow forecasting becomes more important. Real-time visibility of receivables and payables allows management to anticipate shortfalls earlier and plan funding needs. Regular forecasting helps wholesalers align stock purchases, logistics spending, and staffing costs with expected cash inflows, supporting smoother operations under the new compliance framework.
Government Support and Budget 2025 Incentives
To help SMEs manage the cost and complexity of e-invoicing adoption, the Malaysian government has introduced targeted support measures under Budget 2025. These incentives are designed to ease financial pressure while encouraging faster digital adoption.
Microloans and SME financing programmes
SMEs can access RM3.2 billion in microloans through agencies such as TEKUN and BSN. These facilities help wholesalers cover short-term cash needs, including system upgrades, staff training, and initial compliance costs linked to e-invoicing.
Matching grants for digital and software upgrades
A RM50 million matching grant programme is available to support investments in accounting software, invoicing systems, and digital tools. This is particularly relevant for wholesalers upgrading legacy systems to integrate with IRBM’s MyInvois platform.
Automation and digitalisation funding
Bank Negara Malaysia has allocated RM3.8 billion to support automation and digitalisation initiatives. Wholesale businesses can use this funding to improve inventory management, accounting workflows, and system integration related to e-invoicing compliance.
Tax deductions related to ESG and compliance advisory
Businesses may claim tax deductions of up to RM50,000 per year from YA 2024 to YA 2027 for ESG-related consulting, including compliance and e-invoicing advisory services. This helps offset professional fees incurred during the transition.
How incentives can offset transition costs
When used together, grants, loans, and tax incentives can significantly reduce the financial burden of e-invoicing implementation. Combined with private financing options, these measures allow wholesalers to stay compliant without disrupting cash flow or daily operations.
Common Compliance Mistakes to Avoid
As Malaysia’s e-invoicing requirements take effect, wholesale and distribution businesses must pay close attention to execution. Many compliance issues arise not from system failures, but from process gaps and operational habits carried over from manual invoicing.
Late or incorrect e-invoice issuance
E-invoices must be issued at the correct point of sale, even for credit term transactions. Delays, backdated invoices, or incorrect invoice data can lead to non-compliance and increase the risk of IRBM queries or penalties.
Poor handling of credit notes and adjustments
Returned goods, pricing disputes, and partial refunds require proper credit note issuance through the e-invoicing system. Failing to issue credit notes correctly or on time can cause mismatches between sales records and tax reporting.
Incomplete itemisation of service charges
Delivery fees, handling charges, packing, or storage services must be clearly itemised in the e-invoice. Bundling these charges without proper breakdown may result in validation issues or inaccurate reporting.
Overreliance on manual processes
Manual submission through the MyInvois portal may be manageable for low volumes, but it increases the risk of human error for wholesalers handling frequent transactions. As volumes grow, manual processes become inefficient and difficult to control.
Lack of audit trail and documentation
IRBM expects businesses to maintain clear records supporting each e-invoice. Missing documentation, weak internal controls, or inconsistent record-keeping can create compliance gaps during audits or reviews.
Read: Xero Malaysia Guide to e-Invoicing and Peppol Compliance
Conclusion
E-invoicing in Malaysia is not a short-term compliance exercise, but a long-term structural change that affects how wholesale and distribution businesses manage sales, reporting, and cash flow. From high transaction volumes and credit terms to system readiness and internal controls, wholesalers face unique operational pressures under the MyInvois framework. Early preparation is critical to avoid last-minute disruptions, reduce compliance risks, and maintain business continuity. With the right processes, systems, and planning in place, wholesalers can stay compliant while protecting cash flow and supporting scalable growth.
How FastLane Group Can Help
FastLane Group supports wholesale and distribution businesses at every stage of the e-invoicing transition. Our team helps you assess systems and establish clear internal controls in line with IRBM requirements. If you want to implement an e-invoicing process in your company, contact us today for a consultation!
