As an IT consultant, I’ve noticed that many small and medium-sized enterprises (SMEs) are not paying enough attention to the upcoming e-Invoicing mandate. It’s crucial to understand that there will likely be no U-turn or postponement, so it’s time to start facing this challenge head-on.
The implementation of a new system, integration, training, restructuring of operations, and workforce allocations all take time. Even if your business falls under the last batch, with a deadline of 1st July 2025, the time to prepare for e-Invoicing is shorter than you might think.
In my experience, the solutions to the challenges of implementing e-Invoicing can be broken down into three main areas:
IT Systems
Whether it’s an accounting system, ERP system, or middleware, the IT system will primarily help with data entries and compliance.
This addresses about 30% of the issues or challenges related to e-Invoicing implementation.
I always recommend choosing a local provider for local compliance, support, and a development team that can act fast and communicate directly with LHDN and MDEC for any updates or changes to e-Invoicing compliance.
Operations
e-Invoicing will impact the flow of existing business operations and standard operating procedures (SOPs). This includes timely issuing of e-Invoices, validating or rejecting invoices, and handling transactions such as credit notes, refunds, returns, vendor e-Invoices for company purchases, and self-billing.
SMEs that typically only perform accounting and data entry once a year will face increased workload and the need for new control points and timely actions. These tasks will need to be performed at least monthly or within a few days.
Addressing these operational changes will solve another 30% of the challenges.
Change Management
Change management is crucial and should involve all staff and teams in the business or company. It is not sufficient to rely solely on the IT team or finance team to handle the e-Invoicing implementation. The changes affect operations and administration across the organization.
Most likely, all departments will need to make changes, and staff from all departments should be involved to ensure a streamlined and smooth implementation.
Effective change management will address the remaining 30% of the challenges.
The rest of the 10% of the challenges are quite relying on the LHDN side on performance and stability of the API and MyInvois portal.
Recommendation for smooth transition to e-Invoicing:
- The main person running the business should attend a webinar or seminar to gain a general understanding of e-Invoicing and participate in the FAQ session to ask any questions.
- Send a member of your finance team to a more detailed course on e-Invoicing. This can be done later when LHDN fully rolls out the API and the first batch of large businesses have already started.
- Contact your existing POS or accounting solutions provider to see what they currently offer and their progress in terms of e-Invoicing. Many providers may not be able to provide a demo due to pending information from LHDN, but you can at least find out if they will support e-Invoicing or not.
- Check if your solution provider is undergoing the MDEC e-Invoicing solutions provider accreditation process. If they are, they will most likely be compliant, and you won’t have to worry as much.
- Take the time to rethink the necessary changes for operations and finance, and consider adapting them in the next financial year, which for many SMEs would be January 1, 2025.
Personally, I recommend getting a system from an MDEC-accredited, PEPPOL-ready solutions provider that is also accredited for their own PEPPOL network. It’s best to choose a provider with a large existing user base, as this can save time on manual data entries for purchases when the PEPPOL network is implemented, further streamlining the e-Invoicing process.
By following these steps and starting your preparations early, your business or your company can navigate the e-Invoicing transition with greater ease and efficiency, while effectively managing the changes in operations and staff responsibilities.
If you have any inquiries or need help regarding e-Invoicing implementation, please don’t hesitate to contact us.
