For many Malaysian businesses, particularly retailers and those handling numerous daily transactions, issuing individual e-invoices for every sale would be overwhelmingly cumbersome.
Fortunately, Malaysia's e-Invoice framework offers a practical solution: consolidated e-Invoices.
This approach allows businesses to combine multiple transactions into a single submission, significantly streamlining compliance requirements.
What Is a Consolidated e-Invoice?
A consolidated e-Invoice is a single electronic document aggregating multiple transactions where buyers have not requested individual e-Invoices.
Rather than submitting hundreds or thousands of separate e-Invoices to IRBM, businesses can compile these transactions and submit them as a single consolidated e-Invoice within seven calendar days after the month-end.
This approach provides a practical balance between tax administration needs and business operational efficiency, particularly for high-volume, low-value transactions.
When Can You Use Consolidated e-Invoices?
Consolidated e-Invoices can be used in the following scenarios:
• When buyers don't require individual e-Invoices (typically B2C transactions)
• For regular business transactions where normal receipts were issued
• During the interim relaxation period (applicable to all businesses during their first six months after the mandatory implementation date)
However, there are important exceptions where consolidated e-Invoices are not allowed, including:
• Sale of motor vehicles
• Sale of flight tickets and private charters
• Construction contracts
• Sale of construction materials under the 4th Schedule of the CIDB Act
• Sale of luxury goods or jewellery [Currently put on hold]
For these exceptions, individual e-Invoices must be issued for each transaction, regardless of whether the buyer requests one.
How to Prepare a Consolidated e-Invoice
There are three IRBM-approved methods for creating consolidated e-Invoices:
1. Summary Method
Present each receipt as a separate line item in the consolidated e-Invoice. This approach works well when you have a manageable number of distinct transactions to report.
2. Continuous Receipt Number Method
Present lists of receipts in continuous receipt number chains as line items.
When the receipt number sequence breaks, begin a new line item. This method is ideal for businesses with sequential numbering systems.
3. Branch/Location Method
Submit separate consolidated e-Invoices for different branches or locations, using either method 1 or 2 above for each branch's receipts.
This approach helps larger businesses with multiple outlets manage their reporting more effectively.
Step-by-Step Guide to Creating and Submitting Consolidated e-Invoices
Step 1: Organise Your Transaction Data
Maintain accurate records of all receipts issued during the month where no individual e-Invoice was requested. Ensure your receipt system captures all necessary details, including receipt reference numbers.
Step 2: Determine the Appropriate Consolidation Method
Select the most suitable consolidation method from the three options described above based on your business volume and structure.
Step 3: Prepare the Consolidated e-Invoice
When preparing a consolidated e-invoice, you'll need to input specific information about the "buyer" since these transactions involve multiple customers:
• Buyer's Name: Input "General Public"
• Buyer's TIN: Input "EI00000000010"
• Buyer's Registration/ID/Passport Number: Input "NA"
• Buyer's Address: Input "NA"
• Buyer's Contact Number: Input "NA"
• Buyer's SST Registration Number: Input "NA"
• Buyer's Email Address: Input "NA"
Under the "Description of Product/Services" field, you must include all the receipt reference numbers for consolidated transactions.
Step 4: Submit Within the Timeline
Submit your consolidated e-Invoice to IRBM within seven calendar days after the month's end. For transactions in January 2025, submit by February 7, 2025.
Step 5: Handle System Limitations Appropriately
Be aware of the MyInvois System's technical limitations:
• Maximum size of 5MB per submission
• Maximum of 100 e-Invoices per submission
• Maximum size of 300KB per e-Invoice
You may split your consolidated e-Invoice into multiple submissions if your consolidated data exceeds these limits.
Practical Challenges and Solutions
Challenge 1: High Transaction Volume
For businesses processing thousands of daily transactions, even consolidated e-invoices may be challenging.
Solution: Implement a systematic approach to organising transaction data throughout the month rather than scrambling at month-end. Consider automated solutions that can aggregate transaction data continuously.
Challenge 2: Multiple Branches or Outlets
Managing consolidated e-invoices across multiple locations can be complex.
Solution: Adopt the branch/location method and submit separate consolidated e-invoices for each branch. Ensure each branch follows consistent receipt numbering and documentation practices.
Challenge 3: System Integration
Extracting the necessary data from point-of-sale systems into the format required for consolidated e-invoices.
Solution: Explore API integration options that can automatically compile transaction data and prepare it for e-invoice submission.
Best Practices for Efficient Consolidated e-Invoice Management
1. Maintain consistent receipt numbering to facilitate easy consolidation
2. Develop a systematic month-end process for gathering and reviewing transaction data
3. Implement data validation checks to ensure all required information is captured
4. Document your consolidation methodology for audit purposes
5. Back up transaction data before and after the consolidation
6. Monitor submission confirmations to ensure successful processing
7. Regularly review your approach to identify opportunities for improvement
Looking Ahead: Planning for the 2025-2026 Transition
For many SMEs with implementation dates in 2025 and 2026, now is the time to evaluate your transaction volumes and determine how consolidated e-invoices will fit into your compliance strategy.
Consider:
• Upgrading your receipt management system to facilitate easier data extraction
• Training staff on the consolidated e-Invoice requirements and procedures
• Reviewing your current receipt formats to ensure they capture all necessary data
• Planning your month-end processes to accommodate the seven-day submission window
During the six-month interim relaxation period following your implementation date, you'll have additional flexibility in preparing consolidated e-Invoices, including not needing to include receipt reference numbers in the description field. However, it's advisable to work toward full compliance during this period rather than delaying the inevitable adjustments.
Consolidated e-Invoices offer a practical solution for businesses dealing with numerous transactions, balancing compliance requirements and operational efficiency.
By understanding the available consolidation methods and implementing systematic processes for transaction data management, your business can navigate Malaysia's e-Invoice requirements without overwhelming your administrative resources.
As the mandatory implementation dates approach for most Malaysian businesses in 2025 and 2026, investing time now in understanding and preparing for consolidated e-Invoice requirements will help ensure a smoother transition when compliance becomes mandatory for your business.
About the Author
Mr. Chin Chee Seng is the Independent Non-Executive Director of AutoCount and the Founder of CCS Group.
This e-Invoice News series is a collaboration with AutoCount.
