Common e-Invoicing Mistakes to Avoid for Businesses in Malaysia

As Malaysia advances toward a digital economy, the adoption of e-Invoicing has become essential for businesses. As we step into 2025, Phase 2 of e-Invoicing is set to roll out in Malaysia, bringing more businesses into the fold. This transition, mandated by the Inland Revenue Board of Malaysia (IRBM), aims to enhance tax administration efficiency and streamline business transactions. However, as companies embrace this digital shift, several common e-Invoicing mistakes can impede the effectiveness of systems.

Understanding Malaysia’s e-Invoicing Landscape

The IRBM has introduced a phased implementation of e-Invoicing, requiring businesses to transmit invoices through the MyInvois portal or via an API using a Tax Identification Number (TIN). This system is designed to reduce manual errors, expedite payment cycles, and improve record-keeping. Nonetheless, businesses must be vigilant to avoid common pitfalls during this transition.

Common e-Invoicing Mistakes and How to Avoid Them

1. Inaccurate Invoice Data Errors such as incorrect pricing, tax calculations, or missing mandatory fields can lead to invoice rejections by the IRBM’s system. These inaccuracies not only delay payments but also damage business relationships. Solution: Implement robust data validation processes to ensure all invoice information is accurate and complete before submission. Regularly train staff on the importance of data accuracy in e-Invoicing.
2. Non-Compliance with IRBM Requirements Failing to adhere to the specific formatting and data requirements set by the IRBM can result in non-compliance penalties. Each e-Invoice must meet the prescribed XML or JSON formats and include all necessary information. Solution: Familiarize your team with the IRBM’s e-Invoicing guidelines and ensure your e-Invoicing software like IRIS MyeInvois complies with these standards. Regular consultations with tax professionals can also help maintain compliance.
3. Choosing Inadequate e-Invoicing Software Selecting software that lacks necessary features or fails to integrate with existing financial systems can lead to operational inefficiencies and increased error rates. Solution: Conduct thorough research to select e-Invoicing solution like IRIS MyeInvois that aligns with your business needs, supports required formats, and integrates seamlessly with your current systems. Consider solutions that offer automation and compliance features to streamline the invoicing process.
4. Ignoring User Experience Overlooking the ease with which user can interact with your e-Invoicing system may lead to delay in adoption of the e-Invoicing process. Solution: Choose user-friendly e-Invoicing solutions like IRIS MyeInvois that simplify the process for users, such as systems that provide multiple options and modes for e-Invoice generation so you can use it as per your business needs.
5. Lack of System Integration e-Invoicing systems that do not integrate with existing enterprise resource planning (ERP) or accounting systems can cause data silos and manual processing errors. Solution: Ensure your e-Invoicing solution just as IRIS MyeInvois integrates smoothly with your current business systems to facilitate automatic data synchronization and reduce manual intervention.
6. Inadequate Staff Training Without proper training, employees may struggle to adapt to the new e-Invoicing system, leading to errors and decreased productivity. Solution: Invest in comprehensive training programs to equip your staff with the necessary skills to effectively use the e-Invoicing system and understand compliance requirements.
7. Delays in Adopting e-Invoicing Systems Delayed implementation can leave businesses scrambling to meet compliance deadlines, increasing the likelihood of errors and penalties. Solution: Start early by evaluating and onboarding an e-Invoicing solution. This ensures adequate time for testing and integration, minimizing disruption to operations.
8. Failure to Monitor Invoice Status Once invoices are sent, businesses often neglect to track their status, such as acknowledgment from the IRBM or client confirmations. This can lead to payment delays and unresolved discrepancies. Solution: Use an e-Invoicing software like IRIS MyeInvois with built-in tracking and reporting features. Regularly review the status of submitted invoices and promptly address any issues flagged by the system.
9. Ignoring Cybersecurity Measures With the digitalization of invoices, the risk of data breaches increases. Businesses that do not implement strong cybersecurity protocols may expose sensitive information to unauthorized access. Solution: Employ robust security measures, such as data encryption, multi-factor authentication, and secure cloud storage. Regularly update software to address vulnerabilities. IRIS MyeInvois is a secure and robust solution for all your security needs.
10. Overlooking Updates to Regulatory Requirements e-Invoicing regulations can evolve over time, and failure to stay updated may result in non-compliance, penalties, or operational inefficiencies. Solution: Designate a team to monitor regulatory updates from the IRBM. Partnering with tax and compliance experts or subscribing to regulatory newsletters can help you stay informed. At IRIS MyeInvois, we keep a close tab on latest changes by IRBM for example – new validations or any new APIs that are released. So, with all the new regulatory changes, we duly update our systems so that our users are up to date and have a seamless e-Invoicing experience.

Conclusion

Transitioning to e-Invoicing presents Malaysian businesses with an opportunity to enhance operational efficiency and comply with regulatory mandates. By being aware of and proactively addressing common e-Invoicing mistakes—such as ensuring data accuracy, complying with IRBM requirements, selecting appropriate software, considering customer experience, integrating systems, and training staff—businesses can navigate the e-Invoicing in Malaysia landscape successfully and reap the benefits of digital invoicing.

How IRIS MyeInvois can help you with e-Invoicing?

IRIS MyeInvois is a one-stop e-Invoice management solution for all business e-Invoicing needs. The solution is designed to help businesses with streamlining the invoicing processes, without the hassle of massive changes to the current system setup. The IRIS MyeInvois solution seamlessly integrates with any ERP/billing system using APIs or SFTP to minimize disruptions, prepare e-invoices, share e-invoices, manage notifications, and maintain compliance with government mandates. Users can also choose to go for bulk-uploads (.csv or .json) on the portal and use the inbuilt transformation tool to convert invoice data from their format to LHDN format (.xml or .json), pre-validate the data before submission, or calculate missing values. Additionally, users do not have to worry about the throttling or submission related limitations set by LHDN on the MyInvois portal. The users can further choose to raise Manual e-Invoices on the IRIS MyeInvois portal, if needed. The businesses can also add multiple entities (TINs), Point of Business, and Users under the same umbrella subscription and work according to the organizational hierarchy with multiple levels of user management and secure access to the portal for all registered users under the full organization, selected business entities, or selected branches (PoBs), based on their roles and responsibilities. IRIS MyeInvois is also PEPPOL-ready and hence, it provides a future-proof way for businesses to benefit from the digitization of invoicing and share invoices internationally using the PEPPOL network. Businesses can also instantaneously share documents to all customers/vendors through the e-mail feature on IRIS MyeInvois portal, regardless of their availability on IRIS MyeInvois, the PEPPOL network, or consideration under e-Invoicing mandates.