Get ready for e-Invoicing in Malaysia as of 2024
The main purpose of this event is to create awareness on the e invoicing initiative by LHDN and to share what businesses can expect from this implemention, and what will the invoice means for their operations.
The Inland Revenue Board (LHDN) has revealed that the electronic invoicing (e-invoicing) system will be implemented in stages starting from next year. E-invoicing system is the exchange of an electronic invoice document between the vendor and the customer, which goes through LHDN. These invoices will need to be recognized and validated by LHDN as an e invoice, only then it can sent to the customer.
The objectives and benefits of implementing this system is higher accuracy in auditing and time saving on auditing.
Collaboration between the government and Odoo in implementing an e-invoicing system can bring several benefits to both parties. Odoo is a popular open-source ERP (Enterprise Resource Planning) software that offers a range of business applications, including accounting and invoicing modules.
The government can support the implementation of an e-invoicing system by partnering with Odoo. This partnership could involve providing financial assistance, regulatory guidance, and technical expertise to ensure a smooth transition to e-invoicing.
What is Odoo? Odoo ERP is open-source software that covers a wide range of apps and modules that can perfectly match your business requirements. There are different versions of Odoo available that meet small to medium business needs such as the Community version, Enterprise version (Odoo.sh, cloud, and online).
Odoo has been awarded with the Enterprise Application Innovator of the Year award at the Data News Awards for Excellence 2023. This award acknowledges their relentless pursuit of innovation to further disrupt the market and offer the best possible business management solution available.
By leveraging Odoo’s expertise in ERP systems and collaborating closely with the government, the implementation of an e-invoicing system can be more efficient, effective, and beneficial for all stakeholders involved.
Odoo plays a crucial role in the development and deployment of a system by providing a flexible, modular, and integrated platform for managing various business functions. It enables businesses to streamline their operations, improve efficiency, and adapt the system to their specific requirements.
Odoo will be one of the solutions for businesses in Malaysia to intergrate the e-invoicing process with LHDN, as Odoo is already used in other countries for an e-invoicing environment. Precomp is one of the partners that are involved and closely following the development of this initiative.
Other than that, the key features and functionalities of the e-invoicing system is to improves data collection and data accuracy for the tax authorities and helps businesses admin cost since the integration will automate the invoices validation and creation into customers systems. This will streamline the invoicing processes for businesses as well as the auditing by tax authorities.
The invoices generated in the vendor’s system will be transmitted to LHDN for validation as part of the process of producing and submitting e-invoices through this system. When the e invoice is validated by LHDN’s system, it returns a unique number to the vendor’s system for records and notifies the vendor that it has been validated. When the validation is complete, the e invoice is delivered to the customer’s system, where it is automatically produced. Sales invoices, credit notes, debit notes, and cancellations will all be processed using e invoicing. Odoo can easily manage this entire process, and with Precomp’s knowledge in system implementations, the entire process can be implemented effectively with LHDN.
With the interface to LHDN and the validation of the invoices by LHDN, businesses may benefit from e-invoicing systems in terms of efficiency and cost savings. This will reduce administrative costs associated with audits because the e-invoicing process provides greater data correctness and a more effective data collection.
With this method, tax compliance will be enhanced as all documentation will be digitalized and data tracking and validation tracking implemented. The error rate will significantly decline, which will speed up the processing of tax and audits.
Adopting an e-invoicing system has several advantages for small and medium-sized businesses (SMEs), the advantage are clear for SMEs in adopting this system where a more efficient tas processing and tax returns can be ensure, as digitalizing tax data cuts down human workload.
The e-invoicing system can integrate with existing accounting or enterprise resource planning (ERP) systems. In fact, one of the primary goals of implementing an e-invoicing system is to streamline and automate the invoicing process by integrating it with existing systems.
This system is designed to be scalable and can accommodate a growing number of users and transactions. Scalability is an essential consideration in the development of any system, especially when it involves handling large volumes of data or accommodating a growing user base. Precomp can provide consultation and the best practices to businesses undergoing this process.
In conclusion, this e invoicing system will help business with their auditing and improve data accuracy between businesses and the tax authoritiesm with a partner like Precomp and a system like Odoo, businesses will be able to adapt to this new change easily.