Finance leaders urged to prepare early for Malaysia e-invoicing
Malaysia's phased e-invoicing mandate is prompting businesses to clarify compliance steps and potential operational impacts as new regulations continue their scheduled implementation.
As businesses across Malaysia adapt to evolving tax regulations, the shift towards e-invoicing is a central focus for finance leaders aiming to ensure full compliance and minimise potential risks. The government's move to electronic invoicing via the MyInvois platform is designed to strengthen tax systems, align with international best practices, and offer greater digitalisation in financial processes.
Lily Yong, Managing Director at InTune Outsourcing, explained the challenge many businesses face:
"E-invoicing is designed to improve compliance and operational efficiency. For many finance teams, the immediate challenge has been understanding the regulation and implementing systems that meet the deadlines without disrupting workflows. Our goal is to provide actionable insights so CFOs can ensure compliance while supporting strategic business operations."
Yong helped answer common questions among chief financial officers (CFOs) and their teams. E-invoicing, according to her, refers to the issuing and receiving of invoices electronically through the government's MyInvois platform. The initiative aims to boost tax compliance, reduce incidents of fraud, and help Malaysia adopt global standards, such as Peppol.
The phased approach to compliance means that businesses are not all required to switch over immediately; however, Yong advised that early preparation is crucial. "No, compliance is phased based on annual turnover. However, finance teams should start preparation now to avoid penalties and operational disruptions," she said.
Key compliance actions
Yong outlined several steps that CFOs should take without delay: "Determine which compliance phase applies; ensure invoices include all mandatory data (buyer/seller info, itemised details, tax codes, IRN); choose a provider integrating with the MyInvois portal; update processes, train finance teams, and test systems early; maintain secure storage of validated e-invoices."
The risks for failing to comply are significant. Penalties for non-compliance can include fines ranging from MYR RM200 to RM20,000 per infraction or imprisonment for up to six months, or both. There are also broader impacts to consider, including reputational harm, delayed cash flows, and potential strain on supplier relationships. "Penalties, reputational damage, delayed cash flow, and strained supplier relationships. Non-compliance can lead to fines between RM200-RM20,000 per instance, or imprisonment of up to six months, or both," Yong noted.
Value of early adoption
Despite the challenges, Yong stressed that there are tangible benefits for organisations that proactively embrace the e-invoicing system. These include more operational efficiency, improved cash flow management, cost savings, and readiness for audits. "Operational efficiencies, better cash flow management, cost savings, and stronger audit readiness. Early adoption enables smoother integration with existing workflows and proactive risk management," she said.
Addressing some common misconceptions, Yong clarified that e-invoicing does not solely apply to sales invoices: "It only affects sales invoices → False, expenses are included too. It only affects finance teams → False, operational teams are impacted as well. Software alone is enough → False, process and people readiness are critical."
Advice for CFOs
For CFOs feeling overwhelmed by the regulatory changes and technology requirements, Yong suggested practical steps that can make the process more manageable. "Engage software vendors and accountants early, review internal processes, and leverage available government support. Proactive planning reduces risk and ensures a smooth transition," she said.
Technology's role in compliance
Intuit QuickBooks is among the software providers involved in the sector's transition. According to the company, "Intuit QuickBooks Online automates e-invoicing from creation to submission to LHDN, supporting standard and consolidated e-invoices, with self-billed e-invoicing rolling out soon. The platform ensures compliance while giving finance teams full visibility and control over invoicing operations."
As Malaysia's regulatory deadlines continue to approach for more businesses, finance leaders are encouraged to act now, prioritising both system integration and employee readiness to ensure smooth compliance and ongoing operational stability.
