SMEs are encouraged to adopt e-invoicing as it offers substantial benefits, including cost savings, improved cash flow management, enhanced security, increased efficiency, and reduced errors. This digital shift not only streamlines business processes but also promotes sustainability by reducing paper usage and ensures compliance with regulatory standards.
During a media call hosted by LinkFor, CEO Robin Sands underscored the transformative impact of e-invoicing on businesses. “We have seen significant improvement in on-time payments and a reduction in late payments, which is vital for business sustainability,” Sands noted.
The Inland Revenue Board (LHDN) has announced a six-month grace period for taxpayers transitioning to the mandatory e-Invoicing system, effective August 1, 2024. This initiative is designed to ease the transition, allowing businesses to issue consolidated e-Invoices for all transactions during this period.
Sands commended the government’s phased approach, which provides SMEs with ample time to prepare for full implementation. “SMEs have enough time to onboard and integrate their e-Invoicing system, but it’s critical to take the first steps now to avoid any last-minute issues that could disrupt operations and to ensure full compliance with the mandate,” Sands advised.
While the mandate aims to boost national tax revenue, it has raised concerns among SMEs regarding costs, training, and implementation. At the MDEC ‘National E-invoicing Open Day and Accreditation Ceremony,’ Digital Minister Gobind Singh Deo addressed these concerns, noting that the government is exploring ways to reduce the costs of implementing e-invoicing for SMEs. He emphasized that e-invoicing could positively impact overall invoicing processes.
Benefits of e-invoicing
Despite these challenges, Sands pointed out that SMEs in Malaysia stand to gain significantly from adopting e-invoicing, particularly by being part of the Peppol network. Peppol allows its members to send and receive electronic documents efficiently and safely, enabling seamless e-I\invoicing in both B2G and B2B transactions, which promotes smooth financial operations and offers substantial long-term benefits.
By choosing an accredited government-backed e-Invoicing solution via the Peppol Network, SMEs can unlock various advantages, enhancing their competitive edge and supporting sustained market growth.
As an authorised Peppol service provider in Malaysia, LinkFor offers benefits beyond standard e-invoicing providers, especially in standardising processes between businesses and suppliers, ensuring on-time payments.
“Peppol offers a unique standardisation that ensures uniformity across businesses, eliminating the complexities and inconsistencies typically associated with different invoicing systems,” Sands explained.
In a globalised business model where SMEs rely on international suppliers, the Peppol network provides immediate access to a vast network of organizations across various countries.
Sands added, “SMEs can interact with a wide range of businesses and public administrations, facilitating seamless and efficient international invoicing processes and communication.”
Global statistics highlight the importance of on-time payments for SMEs. In the UK, an alarming 58% of SMEs struggle with cash flow due to unpaid invoices. Late payments strain cash flow, affecting business stability and growth.
With over 85% of organisations recognizing the urgent need to adopt new technologies to address these shortcomings, countries like Australia are setting a precedent by paying e-Invoices within just five days, dramatically improving cash flow for countless businesses. These improvements are crucial for SMEs, which often lack the financial infrastructure and credit lines of large enterprises.
LinkFor has facilitated smoother invoicing and payment processes for over 5,000 businesses globally, including many in Malaysia. Sands concluded: “E-invoicing is being widely adopted across the globe, helping organizations align effectively with their digital transformation goals. This solution optimises financial and invoicing processes, enhancing efficiency and accuracy.”
