B2B e-invoicing in Malaysia and benefits of a streamlined invoicing process

 

What is B2B e-invoicing in Malaysia?

B2B e-invoicing involves businesses electronically exchanging invoices, which, while not straightforward to grasp, is highly efficient and streamlines business processes. India has seamlessly integrated GST e-invoicing and Malaysia has recently followed suit, demonstrating trust in this approach.

In Malaysia, B2B e-invoicing involves using electronic formats like PDFs or XML files. These digital formats replace the paper-based traditional methods of sending invoices. This is an integral part of Malaysia’s digital transformation, which aims to improve productivity and solve administrative problems in invoicing. For instance, small and medium-sized enterprises (SMEs) that deal with a large number of invoices can significantly benefit from this digital transformation.

The process of B2B e-invoicing in Malaysia includes the following steps:

Step 1: Provide a detailed list of every item, along with the costs and quantities for each. Add the taxes. In Malaysia, each invoice must include a detailed explanation of the goods or services involved, the price, the date and time, and any other pertinent details. A valid electronic invoice must have 53 required fields, including the seller’s and buyer’s information.

Step 2. Invoices and related documents can be sent electronically via email or a portal.

Step 3. It is the buyer’s responsibility to check the accuracy of the order before making a payment.

Step 4. After the buyer has checked and scheduled payment, the payment will be made.

Step 5. Buyers have the option of paying electronically through their bank accounts.

Step 6. During the payment process, the seller makes sure that the payment received is the same as the invoiced amount.

Step 7. Maintaining financial records and reporting any monetary transactions. Invoices must be kept by both the buyer and seller for seven years after a transaction. Complyrobo helps maintain records accurately and with quick searchable options.

B2B e-invoicing in Malaysia has brought its economy some much-needed solutions and benefits.

B2B e-invoicing in Malaysia has introduced solutions and benefits that streamline the invoicing process for businesses. These solutions and benefits increase efficiency, accuracy, and cost-effectiveness in the management of invoices. Malaysia has seen some below-listed solutions and benefits after introducing B2B e-invoicing:

Solutions

1. Create Invoices

With the help of customizable templates, businesses can easily create professional invoices in a short amount of time. The data entry can also be automated, and options can be added, such as items, tax, discounts, and payment terms, in addition to the data entry.

2. Deliver electronically

Invoices can be sent via email, website portals, FTP, and EDI, as well as other methods.

3. Real-Time Tracking

Keep track of invoice delivery, view, and payment. This will help with cash flow, follow-ups, and other tasks.

4. Integration

Reduce the amount of manual work involved in accounting and ERP systems by integrating invoice data into them.

5. Payment Processing

Provide your customers with the option to pay for their invoices with a credit card or an electronic wallet.

6. Compliance Tools

Make sure that invoices are compliant with regulations and that they contain all the necessary information.

7. Storage and archiving

For audits and reports, it is very easy to access old invoices because they are easily accessible.

8. Self-Service Portals

Suppliers can submit invoices online, whereas customers can review them, approve them, and then pay the invoice.

9. Reporting

Gain insights into invoicing patterns, payment cycles, and outstanding balances for improved financial performance.

10. Security

Follow data protection laws and use robust tools to protect sensitive information, such as passwords, locks, and rules.

Benefits

1. Track invoices in real-time:
With e-invoicing, suppliers can instantly track invoices. Businesses can also obtain input tax credits (ITC) faster. Input tax credit is a mechanism where the tax paid on inputs is reduced from the tax payable on outputs. This means that businesses can claim a credit for the tax paid on their purchases, which can significantly reduce their tax liability.

2. One-time reporting of B2B invoices
Taxpayers only need to submit B2B invoices once in B2B e-invoicing. The E-Invoice Registration Portal for Malaysia, i.e., MyInvois, a key component of the B2B e-invoicing process, verifies invoices and assigns a reference number. This portal is designed to streamline the invoicing process and ensure the accuracy and authenticity of invoices.

3. Buyers and sellers get help
Submit the tax invoice to the Malaysian tax authorities for clearance and verification. The tax authorities will check the invoice and provide a QR code in real-time to both the buyer and seller.

4. QR Code Functionality
Before sending the invoice to the customer, the supplier must include a QR code in the invoice. By attaching a digital signature to an invoice using a hyperlink, the recipient can confirm that the invoice complies with new invoicing laws. QR codes are used on B2B E Invoices to calculate ITCs. A PDF copy of the invoice is also available.

5. Fraud Reduction
Real-time invoice information enables tax authorities to detect fraud quickly.

6. Data entry errors are reduced
The easiest way to send the invoice is through MyInvois or the PEPPOL Network. Complyrobo is an accredited PEPPOL service company that can help you ensure your documents meet the requirements. This automation step can reduce data entry errors to zero.

7. Inter-operability
The invoice should be formatted in XML or JSON to make it easier to send. MyInvois requires you to manually enter invoice data, as opposed to the API, which automates the process. B2B e-invoicing is made more accessible with the standard electronic invoice formats that work with various software systems.

8. Combating Tax Evasion
Pre-made formats of B2B e-invoices ensure absolute claims by making it more difficult to falsify business invoices. Tax officials can better track fake claims

What is the B2B e-invoicing model, and how can Malaysian businesses make the most of it?

Malaysia is all set for B2B E-invoicing, and it is now the responsibility of businesses to make the most out of it. There are several options and models that a business can use to adopt B2B e-invoicing in its everyday operations. A much-required B2B e-invoicing software like Complyrobo is the way to go and below are some adoption models you can refer to:

Direct Integration: This involves integrating the e-invoicing system into your accounting system, which allows for automatic invoice generation. This integration can be done through a series of steps, which ensures a seamless and efficient process.

Web-based portal: Use the e-invoicing features in accounting systems to automate billing.

Electronic Data Interchange, or EDI: You can use the standard EDI format to exchange invoices. But it requires a specific infrastructure.

Third-Party Platform: Outsource electronic invoicing to providers for flexible, scalable, and compliant options.

Hybrid Model: Combine elements from different models for specific needs to improve B2B E-invoicing compliance.

Cash Flow Management through B2B E-Invoicing in Malaysia

E-invoices allow companies and taxpayers to handle and approve them quickly. These speed and automation features reduce the errors in billing and calculations that often lead to disputes. Businesses can easily access their income. This improves management and cash flow. Here are some of the key points:

1. Financial planning: Businesses create budgets and projections to determine their future cash needs.

2. Invoicing: Electronic billing systems and efficient invoicing techniques help manage cash flow.

3. Spending Control: Prioritizing and negotiating the best deals will help you save money.

4. Credit Control: You can minimize late payments by managing your credit limits and setting up clear payment terms.

5. Inventory Management: Keeping track of stock levels helps to prevent money from being wasted on unsold items.

6. Accounts Receivable and Payable: Prompt payments and favorable payment terms for maintaining liquidity.

7. Working capital: A balance between assets, liabilities, and cash is needed to operate.

8. Financing: Businesses can improve their cash flow by exploring credit lines and loans.

9. Tax Management: An effective plan can minimize your tax liability while maximizing your cash flow.

10. By regularly reviewing financial metrics, you can spot issues early.

B2B e-invoicing in Malaysia offers a comprehensive range of benefits, including increased efficiency, cost savings, faster payments, and improved cash flow management. These solutions can streamline your processes and enhance your financial operations, instilling confidence in their positive impact on your business.