Streamlining efficiency with interoperable e-Invoicing


The National e-Invoicing Initiative (NEI) aims to drive interoperability to eliminate manual data entry, reduce manpower requirements, minimise errors and enhance traceability.

THE Malaysia Digital Economy Corporation (MDEC) is spearheading the National e-Invoicing Initiative (NEI) under the 12th Malaysia Plan (RMK-12).

This transformative project, aligned with the Malaysia Digital Economy Blueprint (MyDigital), National E-Commerce Strategic Roadmap (NESR 2.0) and one of Malaysia Digital Catalytic Programmes (PEMANGKIN), aims to revolutionise how businesses exchange invoices to foster a more streamlined and efficient ecosystem.

At the heart of this initiative is the drive for interoperable e-Invoicing, which will standardise the specification and message format of e-invoices.

This approach allows diverse accounting software and Enterprise Resource Planning (ERP) systems to exchange invoices in a system-to-system manner seamlessly.

Peppol framework

To drive an interoperable e-Invoicing ecosystem in Malaysia, Peppol has been identified as the most suitable framework for implementation, due to its maturity and well-governed standards.

Peppol stands out as the most extensively employed framework worldwide, with more than 20 countries adopting e-Invoicing through this system.

MDEC has been empowered by the government to become the Peppol Authority for Malaysia, playing a crucial role in tailoring the framework to align with Malaysia’s economic requirements. This responsibility extends to promoting the widespread adoption of e-Invoicing among businesses.

MDEC is also in charge of driving the implementation of e-Invoicing among local service providers and tailored to local requirements.

The objective is to seamlessly integrate this initiative with tax reporting and compliance measures implemented by The Inland Revenue Board (LHDN), ultimately fostering a cohesive and efficient digital ecosystem for economic transactions in Malaysia.

Implementation of e-Invoicing

In Malaysia, e-Invoicing is being implemented with two distinct yet complementing components.

The first component will focus on e-Invoicing for tax purposes, which will be progressively made mandatory. Concurrently, the second component will see the implementation of e-Invoicing for business digitalisation using the Peppol framework.

These components do not introduce new accounting software or ERP systems on businesses (B2B). Instead, it focuses on standardising specifications within the existing framework by enabling system-to-system exchange of e-Invoicing.

A panel session on 'A Vision for Interoperability: e-Invoicing and its Potential in Digital Trade' was held during the Malaysia Digital Expo 2023 Grand Finale on Nov 6.A panel session on 'A Vision for Interoperability: e-Invoicing and its Potential in Digital Trade' was held during the Malaysia Digital Expo 2023 Grand Finale on Nov 6.

Interoperable e-Invoicing for business digitalisation

The adoption of e-Invoicing will not only allow for interoperable e-Invoicing between businesses but also spur business digitalisation toward benefiting local businesses.

E-Invoicing is poised to reduce processing times, minimise human errors, enhance traceability, and improve record-keeping. These advancements contribute to lower operational costs, faster payments, and a reduction in disputes related to irregularities.

Shifting away from paper invoices aligns with ESG goals, helping companies reduce their carbon footprint.

By embracing the Peppol framework, Malaysian businesses enhance operational efficiency, orderly integrate with tax reporting and compliance measures set by LHDN and ensure standardised cross-border transactions. The standardised framework also ensures enhanced security through encrypted data transmission.

As Malaysia confidently moves towards a digital future, the National e-Invoicing Initiative emerges as a pivotal force propelling businesses into a new era of proficiency, transparency, and sustainability.

For more information on how e-Invoicing works, go to https://mdec.my/national-einvoicing.

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