Implementing an e-invoice system for a business of any size involves several comprehensive steps. This is to ensure a smooth and efficient transition from traditional invoicing methods to a digital platform. 

By 1 Aug 2024, Malaysian companies with a turnover of >RM100 million and above are required to implement e-invoicing fully within their day-to-day operations. For companies with turnovers < RM100 million, this article will help you prepare or kickstart your e-invoice adoption process ahead of schedule.

Use this flowchart below to work out the best options for your business to get started sending e-invoices. 

(If you prefer written instructions, jump ahead for a detailed checklist to guide your process.)

How To Implement E-Invoice After 1 Aug 2024 (Step-by-Step Checklist)

Step 1: Start by Understanding LHDN Requirements

The first step is understanding the legal and regulatory requirements of Inland Revenue Board Malaysia (IRBM). It’s essential to ensure that the e-invoicing solution meets these requirements, such as format standards (e.g., XML, JSON) and submission protocols. Consulting legal experts or industry professionals can help interpret and comply with these regulations, ensuring that your e-invoicing process is legally sound.

Step 2: Nail Down Your Business Goals

Next, evaluate your business needs and objectives. Identify the primary goals for implementing e-invoicing, such as improving efficiency, reducing costs, and ensuring compliance. Conduct a thorough assessment of your current invoicing processes to pinpoint inefficiencies and areas for improvement. Gathering feedback from key stakeholders, including finance, IT, and customer service teams, will provide valuable insights into their pain points and requirements, helping to tailor the solution to your business’s specific needs.

Step 3: Determine the Right E-invoicing Method for Your Company Needs 

Choosing the right e-invoicing solution is a critical step. LHDN offers 2 methods: via the MyInvois portal or APIs (third-party software that can connect to MyInvois). The first method is accessible to all businesses but can only process a limited volume of data, hence more suited for MSMEs. The second method requires time and money invested to acquire the technology and tweak current systems. However, this is ideal for businesses with huge transaction volumes.

Read more: How To Report E-invoices in Malaysia

Conduct market research to identify and evaluate various solutions, comparing features, pricing, and vendor reputation. Look for essential features like multi-format support, compliance, integration capabilities, and scalability. Engage with vendors for product demos and trial periods to test the solution’s functionality. Ensure the solution offers robust security features, complies with relevant regulations, and integrates seamlessly with your existing accounting and ERP systems.

Step 4: Draw Up a Masterplan

Once you have chosen a solution, plan the implementation process. Develop a detailed project plan outlining tasks, timelines, milestones, and responsibilities. Allocate the necessary resources, including budget, personnel, and time. Form a cross-functional project team that includes members from finance, IT, procurement, and customer service, and appoint a project manager to oversee the implementation process and ensure adherence to the project plan.

Read More: Preparing For E-invoicing Launch

Step 5: Existing Systems, Meet The New E-invoicing Solution

Integration of the e-invoicing solution with existing systems is the next step. Work with your IT department to integrate the solution with your accounting, ERP, and POS systems, utilizing APIs or middleware for seamless data exchange. Prepare and migrate existing invoicing data to the new system, ensuring data integrity and accuracy during this process. Customize the e-invoicing solution to match your business processes and requirements by setting up invoice templates, payment terms, and other relevant settings. Configure user roles and access permissions based on your organizational structure to ensure appropriate access controls and data security.

Step 6: Test, Test, and Test Some More

Training and testing are crucial for a successful implementation. Develop comprehensive training programs for all users, including finance staff, IT, and customer service representatives, and provide training materials such as user manuals, video tutorials, and FAQs. Conduct thorough testing of the e-invoicing system, including functional testing, performance testing, and user acceptance testing, to identify and resolve any issues before going live.

Step 7: Pilot Run before Go Live

When going live, start with a pilot run involving a small group of users or a subset of transactions (Sandbox) to ensure everything is working smoothly. Gather feedback from pilot users and make necessary adjustments before full deployment. Once the pilot run is successful, roll out the e-invoicing system across the entire organization, communicating the go-live plan to all stakeholders and providing support channels for any issues that may arise.

Step 8: Always Be Monitoring for Improvements

Monitoring and optimizing the e-invoicing system is an ongoing process. Continuously monitor key performance indicators (KPIs) such as invoice processing time, error rates, and user satisfaction. Quickly address any issues or bottlenecks that arise and regularly review and optimize invoicing processes to enhance efficiency and user experience. Collect and act on user feedback to improve the system continuously.

Step 9: Maintenance is Key

Finally, ensure that the e-invoicing solution remains up-to-date. Keep the software updated with the latest features, security patches, and compliance requirements from the vendor. Perform regular system maintenance to ensure smooth operation and prevent downtime. Provide periodic refresher training sessions to keep users informed about new features and best practices and maintain an updated repository of support resources, including FAQs, troubleshooting guides, and contact information for support.

By following these detailed steps, you can ensure a successful transition to e-invoicing, achieving significant benefits such as improved efficiency, cost savings, and regulatory compliance.

Transition Confidently to E-invoicing

Stay up to date with Bispoint as we navigate this pivotal change towards e-Invoicing in Malaysia together: 

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