Benefits Of Using Electronic Invoicing in Malaysia
The classic paper invoice has its days numbered. In 2025, all businesses will be required to issue electronic invoices. However, in addition to being mandatory shortly, these invoices benefit businesses in many ways.
Below, we summarize the most essential advantages of starting to use electronic invoices in Malaysia:
- Saving time and effort
Billing programs integrate all the data identifying the self-employed person and their clients into a single platform. This way, invoices can be issued automatically and in seconds since most of the information in these documents is automatically completed in just a few steps.
Most freelancers and small businesses do not invoice just one or two clients but several, in some cases, hundreds of companies and individuals. For many businesses, having an invoicing program and starting to issue invoices electronically can save many hours throughout the month.
This time not spent preparing invoices translates into several hours that self-employed workers or their employees can dedicate to other productive tasks for the business.
This is without considering the money spent every hour that an employee or the business owner is preparing invoices instead of focusing on other areas of the company that generate income.
- Avoid human errors
Human errors can happen in any area of business, but especially in invoicing. By creating dozens or hundreds of invoices without automated programs, the chances of making mistakes, which are sometimes very serious, are multiplied.
Some errors may be due to incorrect data entry, which may be enough to contact the client to correct the mistake. However, others could be more serious, such as incorrectly calculating withholdings or taxes on the taxable base.
If income is declared incorrectly and the business receives a tax audit, the Tax Agency could sanction the self-employed person or company.
- Easier tax filing and accounting records
Another advantage, closely related to the previous one, is the automation of the invoice itself and the income and expenses to be declared in taxes such as VAT or IRPF.
One of the essential benefits of having invoicing software like this is that the self-employed person – or their manager – can easily export the amounts to be included as expenses and income in the main tax returns.
This represents a significant time-saving in some declarations, such as the INCOME TAX, since gathering all the previous year’s invoices is unnecessary because they are located and organized on the same platform.
Furthermore, by having income and expenses together in a single program, preparing the leading accounting books required by business owners is also greatly simplified.
- View your taxes in real-time
Some invoicing programs, such as Quipu, allow you to complete taxes almost automatically and display the amount that must be settled in real-time.
For example, the self-employed person can know the result of their declaration for the current quarter even before filing their VAT return. This benefit can be even more significant for the income tax since the self-employed person will be able to know in great detail how much they will have to pay in IRPF or if they will be entitled to a refund from the Treasury.
- Reduction in shipping and collection times
The time savings that come with an invoicing program impact business productivity and speed up invoice payments and collections.
By having automated shipments – in many cases, they can even be scheduled if they are recurring purchases or sales – the self-employed person will reduce the time it takes to prepare and send the invoice and, therefore, will be able to get paid sooner for their work.
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