Read this before you invest in an expensive IT software for integration to LHDN portal

I’ve helped many businesses implement e-invoicing in Malaysia, and one of the most common questions I receive is whether it’s necessary to invest thousands in a new POS or accounting system to integrate with LHDN’s MyInvois portal.

The answer depends on your business model. In a B2C setting, where requests for e-invoices are rare or non-existent, a costly system upgrade is usually unnecessary. Businesses can submit a monthly consolidated e-invoice report (and any required self-billed e-invoices) manually through the MyInvois portal within seven days after month-end.

However, in a B2B setting, integration is strongly recommended. The volume of invoices is typically higher, and there is often an expectation from your business counterparties to receive e-invoices promptly for payment processing. Any delay in issuing e-invoices may cause corresponding delays in receiving payment.

Among SMEs, it is common for accounting to be outsourced to a freelance bookkeeper or external accountant. Sometimes, records are managed in software owned by the accountant instead of the business. With e-invoicing implementation, this arrangement needs to be reviewed. If you are in B2B, issuing e-invoices regularly becomes critical. Relying solely on an external accountant to manage this may prove inefficient and difficult to coordinate.

It is advisable for the business to invest in an accounting software system under its own control. This allows e-invoices to be issued in-house, while still giving access to your accountant for bookkeeping and closing purposes.

When choosing software, opt for a reputable and locally supported system. You’ll generally choose between cloud-based or on-premise solutions. I recommend cloud-based software for SMEs due to lower upfront costs and the flexibility to allow your outsourced accountant remote access. This is especially important for month-end closing, as physical visits during the first week of the month may not be practical. Larger businesses may still prefer on-premise solutions for customisation or data security reasons.

Technology is only one part of a successful e-invoice rollout. Stay tuned for my next article on the people and SOP factors that also matter.

If you need assistance with e-invoicing implementation, feel free to contact me at vincentwong@4cadvisory.my or WhatsApp +6011-7516-3007.