How is E-Invoicing Impacting the Manufacturing Sector in Malaysia?

In 2024, the manufacturing sector in Malaysia contributed around 382 billion Malaysian ringgit (MYR) to the GDP. This made it the second-highest contributor after the services sector, which generated around 977 billion MYR. Despite such contribution, until recently, factories still relied on paper invoices and month‑end batch processing. To speed up tax reporting and cut errors, the IRBM rolled out MyInvois in January 2024, requiring every invoice to be created, checked and sent digitally the moment a sale or delivery happens. Suddenly, what was once a back‑office task has become part of every transaction.

In a typical factory in manufacturing sector in Malaysia, work moves in clear stages—materials arrive, items are built, quality checks follow, then goods ship out—each step often tied to its own invoice. Under e‑invoicing, every one of those order fulfillment milestones must now create a digital invoice that’s timestamped, validated against IRBM rules, and sent straight to MyInvois.

The real question isn’t whether manufacturers can issue invoices but whether they can add this instant, digital step into their multi‑stage process without slowing down the production line.

Manufacturing Workflow and Where E‑Invoicing Enters

A typical manufacturing process in Malaysia moves through clear stages:

1. Order confirmation – Customer places an order and pays a deposit.
2. Material procurement – Factory orders raw materials from suppliers.
3. Production run – Production of goods, often in batches.
4. Quality inspection – Finished items are checked for defects.
5. Partial shipment – Sometimes a batch is sent before full completion.
6. Final delivery – Remaining goods ship to the customer.
7. After‑sales adjustments – Returns, credit notes, or warranty work.

Before e‑invoicing, invoices were issued on paper or in batch PDFs at month‑end, often covering multiple stages in one go.

E-Invoicing Entering the Manufacturing Workflow

• At order confirmation, the ERP immediately generates and sends an e‑invoice for the deposit.
• When materials are procured, a supplier e‑invoice is created and pushed to MyInvois the moment the purchase order is approved.
• At each production milestone (for example, 40% or 70% complete), the system auto‑issues an e‑invoice tied to that stage.
• During partial shipments, the ERP generates a real‑time e‑invoice as soon as goods leave the factory.
• On final delivery, the last e‑invoice goes live to the IRBM portal without delay.
• For returns or defects, credit notes are issued as e‑invoices the minute they’re approved.

In this way, every point where a transaction happens now triggers an instant, digital invoice—timestamped, validated, and reported live via MyInvois rather than waiting for someone to batch paperwork later.

In cases where a manufacturer produces end products and has POS, the POS receives the shipment. The POS is also a part of the ERP system where they record sales to customers and generate B2C invoices for such transactions. In case of refunds or faulty products, POS will be the one to issue a credit note as well.

Where is E-Invoicing Already Proving Helpful for Manufacturing Sector in Malaysia?

While e-invoicing is complicated and a bit difficult to adapt, it offers significant benefits as well. Large manufacturers are using e-invoicing to speed things up.

• Invoice approvals are faster because there is no back-and-forth on data mismatch because the data is structured from day one.
• Audit trails are more structured and accessible as one-click validations leave less scope for disputes.
• Payment cycles are shorter especially when both supplier and buyer are e-invoice compliant.

And some advantages for manufactures go beyond payments, recording, or audits. Some manufacturers are using e-invoicing to renegotiate vendor contracts. When payments are tracked more transparently, it provides a chance to again review and consider timelines, penalties, early-payment discounts and basically the whole structure.

Key Challenges in E‑Invoicing for Malaysian Manufacturers

Even with clear benefits, Malaysia’s manufacturers face real hurdles when switching to e‑invoicing. Here are the main pain points:

1. Technology Issues

• Many ERPs can’t send invoices instantly to MyInvois. Teams end up exporting files manually while pausing operations.
• Connecting the existing system to the IRBM portal or Peppol often needs extra technology integration, which adds time and cost.

2. Process Delays

• Projects now need multiple e‑invoices (for example, 30% at start, 40% mid‑run, 30% on delivery), each with its own timestamp and QR code.
• If an invoice is not within IRBM’s validation window, factories may have to hold shipments until it clears.

3. Supplier and Logistics Hurdles

• If a supplier or vendor hasn’t set up e‑invoicing, payment can’t move forward, holding up the entire order.
• Third‑party shippers often lack a clear way to handle digital invoices, leaving gaps in records.

4. People and Culture

• Staff used to batch‑filing invoices once a month must learn to validate each invoice as it happens.
• Procurement teams juggle paper delivery notes and live e‑invoices at the same time, doubling their work until everyone switches over.

5. Cost Strain for SMEs

• Small and mid‑sized manufacturers face high bills to upgrade or replace ERP modules for real‑time e‑invoicing.
• With unclear gains in faster payments or audit ease, many worry the investment won’t pay off.

Addressing these issues with ready‑made connectors, supplier training, and clear change plans will help turn these bottlenecks into smoother workflows.

How Is the Malaysian Government Supporting Manufacturers with Funding for E-Invoicing Transition?

In Malaysia, over 97% of all businesses are small and medium enterprises (SMEs), and about 47,000 of these are manufacturers. As these companies move toward e-invoicing, cost is one of their biggest concerns. The good news is that the government offers several funding options and digital support initiatives although not specific for e-invoicing can still help with the transition.

Grants for Digital Tools and Automation: One of the most accessible options is the SME Digitalisation Grant, which covers up to 50% of digital costs, capped at RM5,000. Manufacturing SMEs can use this to invest in basic e-invoicing tools, like accounting software or invoicing systems. Similarly, the Smart Automation Grant offers up to RM200,000 in matching grants to help companies automate processes, including billing and compliance workflows.

Loans and Guarantees for Tech Upgrades: There’s also financial support through Bank Negara Malaysia, which has allocated RM3.8 billion in loans for SMEs upgrading their tech or automating their operations. Loan guarantees worth up to RM20 billion are available through SJPP, making it easier for small manufacturers to secure funding for their systems.

Tax Relief and Large-Scale Funding Programmes: Tax incentives are also in place. For example, companies that invest in IT infrastructure—like e-invoicing platforms—can claim capital allowances, which reduce the time needed to recover the cost of these investments. Another useful scheme is the Business Accelerator Programme, which offers up to RM400,000 in grants for businesses that want to improve digital tools or infrastructure.

While none of these initiatives are specific to e-invoicing, many manufacturing businesses have already used them for that purpose. For others, this remains an untapped opportunity to prepare for the coming mandate without bearing the full cost alone.

E-Invoicing Compliance Assistance Provided by Malaysian Government

Besides financial support, the Malaysian government has made some e-invoicing rules more flexible. These changes help manufacturers stay compliant without making their daily operations more difficult. Here’s how they help:

1. Easier Invoicing for Agents, Dealers, and Distributors: Manufacturers often sell through dealers, agents, or distributors. The government now allows self-billed e-invoices for payments made to these parties. Manufacturers don’t have to wait for agents or dealers to issue an invoice. They can create it themselves on time and in the right format and keep their payment and tax records clean. This helps avoid delays and gives manufacturers more control over the process.
   
2. Simpler Handling of Imported Goods: Many manufacturers import raw materials or parts from other countries. Now, they can raise a self-billed e-invoice for these imports by the end of the following month after customs clearance. Instead of rushing to create an invoice immediately, companies have more time and clear rules to follow. It also helps them match the invoice amount to the exact value on the supplier’s bill — making tax reports more accurate and easier to prepare.
   
3. Flexibility to Use Foreign Currencies: Dealing with international suppliers or customers usually means dealing with different currencies. The government allows e-invoices in any currency, as long as the required details are there. Manufacturers don’t have to convert everything to ringgit or keep duplicate records. This saves time and reduces confusion when working with global partners.

How Can Manufacturers Adapt to E-Invoicing?

For the manufacturers who haven’t adapted to e-invoicing yet or who’ve only done it partially, this is a critical time. The deadline for universal adoption is July 1, 2025. But realistically, that’s not the deadline that matters. The real deadline is the next audit, the next big client, or the next delayed payment because the other party couldn’t validate a single invoice.

Here’s what manufacturers need to do:

1. Audit workflows: Where do invoices originate? When are they raised? Who approves them? If the process still depends on someone emailing a PDF, there is certainly a better approach.
2. Loop in the vendors early: This is especially important for the vendors who don’t have internal systems. Their delay becomes the manufacturer’s delay.
3. Invest in integration, not just compliance: Getting e-invoicing done is not the same as doing it well. If a system needs someone to upload files manually, there is a clear wastage of time, and someone is putting extra effort than required. So, ensure you have automated systems in place that takes care of this.
4. Train teams beyond finance: Operations, procurement, sales- all teams in the organization need to know what changes e-invoicing brings. Because compliance cannot simply be the finance department’s responsibility.

How Complyrobo™ Helps Manufacturers Adapt to E-Invoicing

For manufacturers adapting to Malaysia’s e-invoicing mandate, Complyrobo™ offers a solution that’s built to fit real operational needs of businesses.

Here’s how it helps:

• Handles milestone-based and complex invoicing structures
  
  Whether your business bills by percentage of project completion, phased delivery, or partial dispatch, the platform can manage all formats. Complyrobo auto-validates e-invoices and generates it with all required IRBM fields, QR codes, and digital signatures.
  
• Supports both B2B and B2C operations
  
  Whether you’re supplying directly to consumers or to other businesses, the system supports both transaction types allowing teams to create, validate, and manage all e-invoices from one dashboard.
  
• Offers customizable PDF templates and dashboards
  
  Manufacturers can keep their branding intact with custom invoice layouts and track performance with built-in analytics and UAT testing features.
  
• Keeps everything secure and always updated
  
  Complyrobo™ is IRBM-compliant, cloud-based, and built with high-grade security protocols. It automatically updates with any regulatory changes and maintains 99.99% uptime.

For manufacturing businesses that need to stay compliant without slowing down operations, Complyrobo™ makes the transition manageable, efficient, and future-ready.

Final Thought: Moving Beyond Just Invoicing

The manufacturing sector didn’t ask for e-invoicing—it adapted to it because it had to. But adaptation doesn’t have to mean disruption. The businesses that are handling the transition best are the ones treating compliance as a chance to streamline, not just submit.

Tools like Complyrobo™ are making that possible. They are not switching operations but aligning with them. They allow manufacturers to stay focused on production while staying fully compliant in the background.

And that’s the real opportunity here.

E-invoicing isn’t going away. But neither is the complexity of manufacturing workflows. The companies that bridge that gap early before it becomes a burden are the ones that will stay faster and better prepared for what’s next.