KUALA LUMPUR: Link4 has urged businesses to expedite their e-invoicing efforts to avoid potential delays, even though many have already begun the transition.
Under the second phase of Malaysia's e-invoicing initiative, companies with annual revenues between RM25 million and RM100 million are required to implement e-invoicing by January 1, 2025.
The company cautioned that delaying implementation could lead to non-compliance, challenges in selecting appropriate solutions, or the need for additional processes and tools—issues that could cause major operational disruptions if not addressed promptly.
Link4 chief executive officer Robin Sands highlighted the broader benefits of adopting a Peppol-based e-invoicing system, urging business leaders to act proactively.
"This isn't just about compliance; it's about transforming how businesses operate—enhancing cash flow, reducing payment delays, and strengthening supplier relationships," he said in a statement today.
According to Link4, early adoption of Peppol-based e-invoicing can provide companies with a competitive edge.
Early adopters can streamline processes, reduce human errors, and gain greater visibility into their financial operations.
On the other hand, delaying adoption could expose businesses to non-compliance penalties, operational disruptions, and missed opportunities for cost savings that could improve profitability.
Sands emphasised that the Peppol framework offers a globally recognised standard, simplifying cross-border transactions and eliminating inefficiencies in invoicing processes.
"By adopting it now, Malaysian businesses can position themselves as leaders in digital transformation, preparing for a future where seamless transactions are a baseline expectation," he added.
To facilitate the transition, the Inland Revenue Board (LHDN) has announced a six-month grace period starting August 1, 2024.
During this period, taxpayers can issue consolidated e-invoices for all transactions, allowing businesses to adjust more smoothly to the mandatory e-invoicing system.
Additionally, in the Malaysia 2025 Budget, tax incentives were introduced to encourage e-invoicing adoption. These include an accelerated capital allowance for expenses related to ICT equipment, software packages, and consulting fees.
Businesses can claim these incentives over two years, from 2024 to 2025.
Recent data underscores Malaysia's progress in this area, with Deputy Finance Minister Lim Hui Ying reporting that 7,900 companies have already issued more than 87 million e-invoices.
These figures illustrate the operational efficiency and transparency that e-invoicing offers to businesses prepared to adapt.