KUALA LUMPUR: Large businesses are pressuring SMEs to adopt e-invoicing, threatening exclusion from supply chains if they do not comply, said Small and Medium Enterprises Association of Malaysia (Samenta) national president Datuk William Ng.
He highlighted the need for government intervention to support smaller SMEs, especially micro businesses, in adapting to e-invoicing requirements.
“We are thankful to the government for agreeing to our proposal to exempt micro SMEs, with those earning RM150,000 and below in annual revenue being excluded from issuing e-invoices and consolidated monthly invoices. This will help many micro businesses during the difficult learning curve. However, as larger businesses begin implementing e-invoicing from Aug 1, 2024, smaller SMEs face significant challenges,” he said during a press conference themed “Impact and Challenges Faced by SME and Retailer Community” today.
Ng said that while Inland Revenue Board (IRB) has reminded larger corporations that smaller SMEs are not required to issue e-invoices, many large companies are still demanding compliance from their suppliers.
“Many large corporations have issued circulars to their suppliers, including smaller SMEs, warning that non-compliance with e-invoicing may result in exclusion from their supply chains,” he noted.
He said this creates a real risk for SMEs as large companies, having invested millions in new systems to integrate with the IRB system, are reluctant to create separate processes for non-compliant SMEs.
“This could lead to smaller SMEs being cut off from supply chains simply because they are not ready to issue e-invoices,” he said.
Ng also expressed concern about the potential disruption to daily business operations that e-invoicing might pose for SMEs.
“In an ideal environment, e-invoicing should not disrupt operations. But the current process is not simple. SMEs, especially in retail, will need to take additional steps to incorporate e-invoicing into their processes, increasing operational costs and complexity,” he said.
He called on the government and tax authorities to simplify the e-invoicing process, making it as easy as scanning a QR code, to avoid additional costs and disruptions for SMEs.
“Furthermore, we are concerned about data security. The current e-invoicing process requires customers to provide extensive personal information, which could lead to potential data breaches.
“A simple QR-based solution could address this issue, ensuring customer data is secure while facilitating the e-invoicing process,” he said.
Ng is urging the government to take these concerns into account and implement solutions that make e-invoicing easier and more secure for SMEs before the nationwide implementation.
Meanwhile, Web Bytes Sdn Bhd, a retail management software company, emphasises the role of technology in helping retailers navigate economic challenges effectively.
Web Bytes CEO Ooi Boon Sheng said inflation poses a significant challenge for retailers, but technology offers powerful tools to help manage these pressures.
“By adopting advanced retail software solutions, businesses can optimise their operations, reduce waste, and streamline processes. Our goal is to empower retailers with the technology they need to not only survive but thrive in this challenging economic environment,” he said.
