E-invoicing is a generic term which describes electronic trading of invoices between the enterprises. This technology has found its way into Malaysia and it offers low costs, higher efficiency, and environmental safety.
In this article, we will discuss everything you need to know about e-Invoicing in Malaysia, including:
- What is e-Invoicing?
- Benefits of e-Invoicing
- How to implement e-Invoicing
- The latest guidelines about e-invoicing in Malaysia
- What is e-Invoicing?
An example of this is e-Invoicing, or the electronic exchange of invoices between firms. Management team should be made aware of its benefits. This is a paperless procedure through which companies can exchange invoices electronically, normally on a secure Internet site.
e-Invoices may be delivered as PDFs, XMLs or JSONs. Just like a traditional paper invoice, this has some information such as invoice number, date, supplier, customer details, and items & services provided.
Benefits of e-Invoicing
There are many benefits to using e-Invoicing, including:
- Reduced costs: E-invoicing could help companies in many ways to bring down their costs. It is a good case study as it avoids the wastage incurred in printing, mailing & storing paper invoices. It may also help reduce invoice errors leading to time and cost savings for businesses.
- Improved efficiency: E-invoicing is thus a viable method of enhancing business efficiency. It could also reduce the time required for invoice processing. Improved communication may also facilitate business, supplier and customer relations.
- Reduced environmental impact: The implication is that e-invoicing can help firms eliminate paper invoice thereby lowering their environmental footprint.
Here is a more detailed step-by-step guide to implementing e-Invoicing in Malaysia
- Choose an e-Invoicing solution provider. Make sure you compare different e-Invoicing solution providers before picking one that best fits to your demands and budget. Sign up with FastLane, Xero’s Platinum Service Provider for eInvoicing, to simplify and accelerate your invoicing workflow.
- Contact the e-Invoicing solution provider. After selecting an e-invoicing solution provider, you should contact them for consultation and beginning of the implementation.
- Register with the IRB. To send e-invoices, you must first register with the IRB. You can do so through online registration, or by sending in a form by post.
- Configure the e-Invoicing solution. You’ll be glad to know that the e-Invoicing solution provider will come to your aid in configuring the solution to your specific needs. Such processes may involve creating invoice templates, defining workflow approvals for invoices, and integration with the IRB’s E-invoicing system.
- Test the e-Invoicing solution. After deployment of the e-invoicing solution, test it to confirm its effective functioning as specified.
- Extend an invitation to suppliers and customers to use e-Invoicing. Notify your suppliers and customers to switch to e-invoicing by sending them an invitation email.
- Start sending and receiving e-Invoices. After you get a nod from your customers and suppliers to switch from traditional paper invoices to electronic ones, you can start sending and receiving electronic messages.
Tips for implementing e-Invoicing successfully
- Start planning early. It takes time to implement e-Invoice so preparations begin way before.
- Talk to your suppliers and customers. Inform your suppliers and customers on how you intend to move to e-Invoicing by also educating them on how they can support such efforts.
- Train your staff. The provision of e-Invoicing training to your staff is a must.
- Test the e-Invoicing solution thoroughly. Before you begin sending or receiving e-invoices, thoroughly scrutinize the e-invoicing solution to ensure its functionality.
Latest regulations on e-Invoicing in Malaysia
There are few regulations regarding e-Invoicing from the Malaysian government. E-Invoicing regulations are made to improve the uptake of e-Invoices and enhance security and reliability.
On this note, one of the major regulations in Malaysia is for business enterprises to first be registered with the Malaysian Inland Revenue Board (IRB), before they will be allowed to issue-out e-Invoice. This registration is carried out with the aim of ensuring that businesses in Malaysia comply with the tax laws.
The second crucial rule requires the e-Invoice to be in a structured form. The structured format is referred to as Peppol BIS Billing 3.0. The format is designed to facilitate electronic invoicing with other e-Invoicing systems.
E-invoicing is a paperless technology used for sending and receipt of invoices between businesses. On the one hand, it has various advantages such as lowered cost, increased productivity, and less environmental hazard.
There are several policies concerning e-Invoicing that the Malaysian government has put in place. The regulations are meant to enhance the use of e-Invoices and provide the public with secure and trustworthy invoices. Need assistance with e-invoicing enrollment, feel free to reach out to FastLane. We’re here to help!