E-invoicing: A path forward for some, too cumbersome for others

THE early-morning light streams through the windows of Robert’s (not his real name) hardware store, casting a soft, silvery glow over shelves brimming with nuts, bolts, tools and other necessities.

Outside, the streets are still quiet, with only the occasional car speeding by. Inside the shop, however, the day is already in full swing.

Robert’s shop has long been a go-to for local contractors and DIY enthusiasts alike. His phone buzzes constantly with incoming orders, while a few workers load heavy bags of cement and sand onto a large truck in the back.

With one hand, he scrolls through chats, occasionally sending voice notes to confirm orders and respond to queries. In the other, he scrawls delivery details onto a notepad made from a recycled calendar.

Delivery driver Jack (also not his real name) stands by the counter, sipping coffee from a take-away plastic bag and observing the growing list of deliveries. After a few more quick jottings, Robert passes the notepad to Jack, who nods without a word and heads out the door, paper in hand.

To an outsider, the messy handwriting may be incomprehensible, but to Jack, who has been working with Robert for years, it is all that he needs.

Once the shop has quieted down, Robert turns to me and says: “Sorry, for making you wait, you wanted to talk about the e-invoicing thing, right?”

I nod, before asking him how he feels about the e-invoicing implementation, which had taken effect in August this year.

Leaning back in his chair, Robert surveys his cluttered store, a furrow appearing on his brow.

“It’s mandatory for big companies now, but businesses like ours have until mid-next year to comply.

“Nothing’s changed yet, but soon it’s going to be a big problem. Everything here is handwritten – orders, invoices, credit notes, delivery schedules, all of it.”

Gesturing towards a pile of worn order booklets and invoices near the register, he adds: “You want us to make all of this digital?”

“I understand why the government wants e-invoicing, but all this digital stuff – it’s too much. Maybe younger people will have no trouble with it, but for old shops like mine, it feels impossible.”
Sighing deeply, Robert says he only has Jack and a couple of workers in his employ, while his wife helps out sometimes.

“Who’s going to learn e-invoicing?

“Me? Forget it. I’m already too busy, and I don’t have a whole team like the big stores.”

I ask if he has looked into government support or getting help from accounting firms.

“Our accountant introduced a company that can set up an e-invoicing system, and some business associations invited us to talks. But to be honest, I don’t understand most of it.

“I could hire a youngster to handle it, but that’s another cost we can barely afford, along with the cost of the system itself,” he laments.

“How much would the system cost?” I ask.

Robert’s reply?

“About RM10,000 upfront, not including yearly fees.

“They have a few packages, but that is the one they recommended to us because we need to generate a lot of individual e-invoices.”

Robert’s store takes numerous orders from local contractors who have already informed him they will need individual e-invoices soon to submit claims to larger contractors and developers.

“It’s especially tough for us because many contractors place several small orders every few days because they are worried about ordering too much. With that volume, we can’t use the free one (LHDN’s MyInvois Portal),” he adds.

“I tell you, when the time comes, many businesses like us will have no choice but to close up because we really can’t keep up if we’re not big enough, or if we don’t have any youngsters willing to take over.”

Glancing around at his store, Robert reflects on the years spent building his business.

“It will be sad to shut this place down since it has been my whole life and part of the community for the past 30 years, but at least I know I can afford retirement because I’ve put enough into EPF (Employees Provident Fund).

“I just worry about the other old businesses that may not have done as well as me over the years.”

I ask if the exemption for certain micro-businesses could offer any relief.

Robert scoffs.

“That’s for businesses with under RM150,000 in revenue. Even ‘kolo mee’ sellers have more revenue than that.

“They already only charge SST (Sales and Services Tax) for companies with over RM500,000 revenue, so why is the e-invoicing exemption set so low?

“It’s going to be difficult, really difficult, if only businesses under RM150,000 are exempted.

“Some may manage, but stores like mine won’t be able to afford the cost of adapting,” he says, before turning to take another phone call, pen in hand, ready to note down another order.

Robert’s hardware store has survived amidst larger chain stores, thanks to his loyal clientele and his personal touch in customer service.

However, as the conversation about e-invoicing continues, it is clear that for many small businesses like his, the path forward may not be as simple.

In a capitalistic society, we say the strong survive and the weak perish, but perhaps it is time to rethink the safety nets for those who, like Robert, see no way forward.