Unpacking Implementation

of e-Invoice:
Stage-Wise Insights

Updated as at 15th October 2023

Website: www.wanconnect.com.my
FB:www.facebook.com/waconnectgroup
 About Us
Wanconnect Consulting Group (“Wanconnect”) is
an integrated and independent assurance, tax,
secretarial, advisory, and training development
Company which is established with the
objectives to provide comprehensive
professional consultancy and services to various
leading organizations and fast-growing
businesses.

Our dynamic team is driven to create quality

outcomes and shared value for our clients
enabling them to reach their full potential
through our integrated services model. Beyond
standards and requirements, integrity is the
cornerstone of our philosophy, it defines how we
work and behave in towards the long-term
success of employees, clients and stakeholders.

Our Services
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Taxation
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 Content Table

Overview of e-Invoice
Digitizing Transactions: The Future of Invoice Management 1

The Impact on Business Operations

Streamlining processes and enhancing transparency 2

Implementation Stages on e-Invoicing

From planning to seamless execution of in business operations 3

Challenges & Recommendations on Implementation

Identifying the roadblocks & paving the way forward 4
 1 1

Overview
of –Invoice
E-invoicing in Malaysia is part of the nation's effort to modernize its business processes and
move towards a more digitally integrated economy. It is in line with the Twelfth Malaysia Plan,
where the focus is on strengthening the digital services infrastructure and digitalizing the
administration .

The e-Invoice will enable real-time or near real-time validation and storage of transactions,
catering transactions from:
▪ Business to Business (B2B);
▪ Business to Consumer (B2C); and
▪ Business to Government (B2G)

01. 02.
What is e-Invoice? What does it replace?
A digital representation of Replaces paper or electronic
a transaction between a documents such as invoices,
supplier and a buyer credit notes and debit notes

03. 04.
Information in e-Invoice Format of e-Invoice
e-Invoice contains the e-Invoice is a file created in
same essential information the format as XML or JSON.
as traditional documents PDF, DOC, JPG and etc are not
format of e-Invoice
 The evolution of business operations in the digital age has ushered in a
myriad of technological advancements aimed at streamlining processes and
enhancing efficiency.

Among these innovations, e-invoicing stands out as a transformative tool

that fundamentally alters how businesses manage transactions.

Benefits of
adoption e-
Invoice

01. Increases tax compliance

Top 3
Benefits 02. Automation reduces human errors

03. Streamlining invoicing management

 e-Invoice will be implemented in phases to ensure smooth
transition.

The tentative e-Invoice timeline shall be as followed:

No Revenue (RM) Date

1 More than 100m 1 June 2024**
2 > 50m – 100m 1 January 2025**
3 > 25m – 50m 1 January 2026**
4 All other taxpayers 1 January 2027**
Extracted from e-Invoice Guideline dated 29th September 2023

**Updated
The tabling of Budget 2024 was held on 13th October
2023, and it was announced by Prime Minister Datuk Seri
Implementation Anwar Ibrahim that business whose revenue is more than
RM100 million, the implementation date shall be
Timeline mandatory from 1 August 2024.

The rest of the taxpayers shall be implemented in phases

starting from 1 July 2025.

Increases tax compliance

The annual turnover or revenue for the implementation of
e-Invoice will be determine based on:
▪ Audited Financial Statements for the Financial Year 2022.
▪ Tax Return reported for Year
Automation of Assessment
reduces human2022.
errors

Streamlining invoicing management

 21

The Impact on
Business Operations
e-invoicing implementation carries profound implications for business
operations, reshaping the very fabric of transactional activities and inter-
business communications.

Operational Efficiency Data Analytics

01 Streamlines the invoicing

process, promotes quicker
and reliable transactions
Allow business to harness
the power of big data and
04
provide insighted into sales
trends, customer behavior
and etc

Cost Reduction Environment Benefits

02 Decreased
paper-based
reliance on
resources,
A smaller environmental
footprint – Go ESG!
05
associated costs are reduced Promoted a positive point
or eliminated for a Company’s social
responsibility profile

Enhanced Accuracy Global & Cross Border

03 Automated
reduced
processed
human error,
Simplified cross border
transactions, easier to
06
leading to more accurate send, process and reconcile
reporting the transactions.
 3 1

Implementation
Stages On e-Invoicing
Implementing e-invoicing in business operations is a transformative endeavor that
touches various facets of an organization. To ensure seamless integration and reap
the full benefits of this digital shift, a structured approach is vital.

Key Stages in
implementation
1. Planning Stage
Understanding of new
workflow and set clear
objectives for the shift

2. Implementation Stage
Pilot testing on a smalls scale to test its
effectiveness,. Training & onboarding
for staffs to familiarize with the new
workflow

3. Post- Implementation Stage

Identify challenges and make
necessary adjustments for
areas of improvements.
 41

Challenges &
Recommendations
While the adoption of e-invoicing promises streamlined operations, its implementation
is not without challenges. As businesses embark on this journey, it's essential to
anticipate potential pitfalls and arm themselves with solutions that ensure a smooth
transition to e-invoicing.

01 Additional Cost on Software Upgrades

With the use of Application Programming Interface (API) to create linkage
from the accounting software to Inland Revenue Board’s e-invoicing
transmissions, a system upgrade is generally required to meet the
requirements under e-invoicing.

Businesses should allocate funds for software upgrades to maintain

efficiency, security, and competitiveness and investing in software upgrades
ensures that businesses can leverage the latest features, maintain
compatibility with other systems.

02 Readiness of the Employer and the Employees

Employer and Employees might be accustomed to traditional invoicing methods and
might resist transitioning to a digital system and inadequate or inconsistent training
programs can lead to employees not using the system optimally or making errors.

Engage in dialogues with employees, addressing their concerns and clarifying the
reasons and benefits of the transition and Offer comprehensive training sessions,
workshops, and hands-on tutorials to equip employees with the necessary skills.
03 Backup Plan and Operation System Workflow
Businesses will have to determine which mechanism they will be adopting, i.e.
myInvois vs API. In case of a system failure, quick shifting of mechanism critical

Challenges &
to maintain business continuity.

Businesses is recommended to periodically test backup solutions to ensure

Recommendations
they work as expected. This includes restoring data from a backup to verify
data integrity and the restoration process. Establish a dedicated team
responsible for data recovery in emergencies and the team should be trained
to handle data shifting efficiently to ensure minimal downtime.

04 Compliance of Format in Accounting Software/Systems

There are a minimum of 51 fields in the requirement of a format that is set for e-
Invoicing. Existing accounting software might not seamlessly integrate with the new e-
invoicing system due to format discrepancies. Employees might require extensive
training to understand and adapt to the new e-invoice format.

Businesses are to regularly monitor industry and governmental updates on e-invoicing

standards and engage with e-invoicing experts or consultants to ensure the chosen
software meets the required standards. Businesses are encouraged to invest in flexible
accounting software that allows easy customization to adapt to various e-invoice
formats.
 05 Identify Your Customers
Businesses are to identify your customers, i.e. Business vs
Consumers. The requirement under e-invoicing is that

Challenges &
transactions to consumers can be exempted from issuing an
e-invoicing.

Recommendations
Businesses are to ensure that the policies set by the
businesses are compatible with the expectation of its
customers, i.e. whether customers as consumers would
prefer the issuance of e-Invoice.

06 Request of e-Invoice from Return Customers

Generally, consumers do not require an e-Invoice as a proof

of expense for a tax deduction or to claim tax relief. However,
circumstances may occur when consumer required an e-
Invoice and may request the issuance of an e-Invoice after
stepping out from a closed sale.

Businesses are to set a Standard Operating Procedures (SOP)

on how return customer can request an e-Invoice after
leaving the store/shop, example requesting via email, mobile
apps or directly from the service counter.
 07 Reconciliation of e-Invoices

Errors in data entry or automated data extraction can lead to

discrepancies between e-invoices and accounting records. With a
significant number of e-invoices to reconcile, manual reconciliation
becomes time-consuming and error-prone.

Businesses are to invest in tools that automatically match e-invoices

with corresponding accounting entries, flagging any discrepancies.
Businesses are to conduct periodic internal audits to identify and
rectify reconciliation discrepancies promptly. It is important to
ensure staff members involved in invoicing are well-trained and
aware of the importance of accurate data entry.

08 Self-Billed Invoices

In a self-billed invoice arrangement, the buyer issues the invoice instead of the
seller. This can lead to confusion over roles and responsibilities. Errors may arise if
the buyer's data does not match the seller's records, leading to disputes. With the
buyer generating invoices, the reconciliation process may become complicated,
especially if discrepancies arise.

Business owners are to clearly define the roles and responsibilities of both parties
in the self-billing agreement and stablish written agreements specifying the terms,
periodic review mechanisms, and criteria for the generation of invoices. The
Finance Department team are to regularly reconcile data between the buyer and
seller to ensure accuracy.
09 Employees’ Benefits and Claims
Employee may be provided with Employee’s benefits by his/her Employer or there
might be circumstances whereby Employee makes payment on behalf of his/her
Employer and reimburse the expenses claim subsequently.

Although IRB gives a concession that an e-Invoice may not be required as a proof of
expense, it is however required from IRB that the Employer should include the
benefits and reimbursement in its Company policy.

Employer is recommended to review its policies and to ensure that it is updated

accordingly to smoothen the process of claims and to support a normal invoice can
act as a proof of expense.

10 Communication with Stakeholders

Businesses are to identify all relevant external parties e.g. Software dealer,
suppliers, customers, auditor, tax agent and etc that are impacted by the e-
invoicing transition or changes.

It is recommended to send an introductory communication (like an official letter or

email) informing them about the transition or changes in the e-invoicing system to
provide stakeholders with ample time to adapt and prepare.

Regular communication in addition can fosters a collaborative relationship and can

help in preemptively addressing concerns with the related stakeholders.
 E-invoicing, an integral component of the digital
transformation journey, promises to reshape the way
businesses handle financial transactions. Additionally, the
environmental benefits of transitioning to paperless
transactions can't be overlooked.

Yet, while the advantages are numerous, successful e-

invoicing implementation requires meticulous planning,
Organizations must prioritize ensuring compliance with
regional and international standards, while also
safeguarding data privacy and security.

Collaborating with external parties, such as tax agents and

Summary auditors, further accentuates the importance of effective
communication and training.

In conclusion, e-invoicing stands as a testament to the

ever-evolving business landscape, driven by technological
advancements. Companies willing to embrace this change
and navigate its complexities are poised to not only
streamline their financial operations but also achieve a
competitive edge in the modern business era.

If you require assistance in the implementation of e-

Invoicing or consultation to e-Invoicing matters, please
contact Ms. Cynthia Tan at einvoice@wanconnect.com.my

Contact us
Address: Level 23A-02 &
23A-03, Q Sentral,
Kuala Lumpur
Phone : 03-2276 6226
SQL Support : 017-335 6279

Email:
admin@wanconnect.com.my
 Meet Our Team

Ms. Yap Wan Ching

Founder of Wanconnect Consulting Group
Chartered Accountant (CA), Malaysia Institute of Accountants (MIA)
Licensed Auditor

Mr. Liew Chee Keong

Co-Founder of Wanconnect Consulting Group
Chartered Accountant (CA), Malaysia Institute of Accountants (MIA)
Licensed Auditor

Mr. Yap Yau Loong

Chartered Accountant (CA), Malaysia Institute of Accountants (MIA)
Licensed Auditor

Ms. Zovy Yap

Chartered Accountant (CA), Malaysia Institute of Accountants (MIA)
Audit Director

Ms. Cynthia Tan

Chartered Accountant (CA), Malaysia Institute of Accountants (MIA)
Licensed Tax Agent
DISCLAIMER
All views and opinions expressed in this document either in writing or verbally are those of personal
interpretation in accordance with the relevant law and regulations and they do not in any way
reflect the official view of the relevant taxation authorities in Malaysia.

This document has been created for the purpose of sharing information, and any recommendation
and additional materials have been provided as an “as in” basis without warranty, implied or
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