E‑invoicing affects how invoices are issued, validated and archived, with implications for controls, tax disclosures and reporting cadence. CFOs should map document flows, confirm data ownership, and align tax configurations with LHDN schemas. Decide integration approach early, set exception handling rules, and run end‑to‑end tests before go‑live. This guide summarises key decisions, a cut‑over checklist, and early KPIs to monitor post‑launch.
1. Phasing timelines and scope by turnover
Malaysia's e‑invoicing mandate phases by annual turnover thresholds, requiring CFOs to understand implementation timelines and scope for their organisation. Companies with turnover exceeding RM 100 million must implement by 1 August 2024, whilst those above RM 25 million have until 1 January 2025. The final phase covers all remaining taxpayers by 1 July 2025.
Finance leaders should assess current invoice volumes, document types, and stakeholder touchpoints to scope the project appropriately. Consider both inbound supplier invoices and outbound customer billing, as both streams require LHDN‑compliant e‑invoice generation or receipt capabilities.
2. Data/master records and document flows
CFOs should map current invoice flows and identify data ownership across finance, procurement, and sales teams. E‑invoicing requires clean master data for customers, suppliers, products, and tax codes, with particular attention to Malaysian Business Registration Numbers and tax identification details.
Document the current state of invoice approval workflows, coding hierarchies, and exception handling procedures. E‑invoicing may require process changes to accommodate real‑time validation and digital‑first document management.
3. Tax/WHT mapping and adjustments
Align existing tax configurations with LHDN schemas, ensuring accurate mapping of SST, service tax, and withholding tax components. The e‑invoice format requires specific tax classification codes and percentage rates that must match your current ERP or accounting system setup.
Review current withholding tax treatments, particularly for professional services, rental payments, and contractor fees, as these require specific disclosure in the e‑invoice format.
4. Controls, exceptions, and archiving
Design exception handling and document retention policies that accommodate both digital‑native e‑invoices and legacy paper‑based processes during transition periods. Establish clear escalation procedures for technical failures, validation errors, and dispute resolution.
Implement robust backup and archiving procedures that meet LHDN retention requirements whilst supporting business continuity and audit trail maintenance.
5. Integration patterns and vendor selection
Evaluate direct API, middleware, or ERP‑integrated approaches based on transaction volumes, technical capability, and budget constraints. Direct integration offers maximum control but requires significant development resources, whilst middleware solutions provide faster implementation with potentially higher ongoing costs.
Assess vendor capabilities around error handling, retry mechanisms, and reporting functionality, as these operational aspects significantly impact day‑to‑day finance operations.
6. Change management and communications
Prepare finance teams and stakeholders for process changes, with particular focus on timing differences between invoice creation, validation, and accounting recognition. Develop training materials that address both system‑specific procedures and broader process implications.
Coordinate with customer and supplier communications to ensure smooth transition, particularly for high‑volume trading relationships where disruption could impact cash flow or operational efficiency.
7. Testing and cut‑over checklist
Run end‑to‑end tests before go‑live to reduce operational disruption, covering both successful processing scenarios and error handling procedures. Test with representative transaction volumes and document types to identify performance or processing bottlenecks.
Develop a comprehensive cut‑over checklist covering data migration, user access, system connectivity, and rollback procedures in case of critical issues during the transition period.
8. KPIs, reconciliation and remediation
Monitor early performance indicators post‑launch, including processing success rates, exception volumes, and time‑to‑resolution for technical issues. Establish regular reconciliation procedures between e‑invoice submissions and accounting system postings.
Implement ongoing monitoring and remediation processes to address data quality issues, system performance problems, and process inefficiencies identified during live operations.
Related Services
Our Accounting & Financial Reporting team helps CFOs align e‑invoicing with financial reporting processes. For tax compliance guidance, explore our Tax Advisory & Compliance services. Technology integration support is available through our Technology Consulting practice.
Last updated: 13 Oct 2025