The Untold Benefits of E-Invoicing For Hotels and How to Switch Over
From 1st January 2025, taxpayers with an annual turnover or revenue of more than RM25 million and up to RM100 million are required to implement e-invoice into their business. This applies to every industry, including hospitality, to comply with the new tax submission system to combat tax evasion.
While this move can be seen as troublesome for many business owners, hoteliers should take advantage of the e-invoicing features and rake in the benefits for their hotels.
What is E-Invoicing?
E-invoice is a digital document of a transaction between a supplier and a buyer. e-Invoice replaces paper or electronic documents such as invoices, credit notes, and debit notes.
An e-Invoice contains the same information as a traditional document, such as, supplier’s and buyer’s details, item description, quantity, price excluding tax, tax, and total amount, which records transaction data for daily business operations.
Benefits of E-Invoicing for Hotels
Like any businesses, hotels need to purchase supplies for their establishments like towels, toiletries and ingredients for their in-house cafes or restaurants. As such, e-invoices can prove to be beneficial for hotels in the long run. Some of the benefits of e-invoicing are:
1. Significantly Reduces Errors
The last thing hoteliers need is to deal with errors in their invoices. E-invoices automates the data input into the invoice issued to a buyer, reducing errors that might occur if it is created manually instead.
2. Real-Time Tracking of Transactions
With e-invoicing software, you can track your transactions in real time and view the status of the invoice. This improves your cash flow and allows better decision making for your hotel operations.
3. Stay Compliant to Tax Regulations
With reduced errors, you can ensure your hotel stays compliant to LHDN’s tax regulations. This also minimises your risks of getting penalised and into legal issues with the organisation.
4. Save Time and Costs
Hotels that are sustainable are preferred by guests. By switching to e-invoice, you are taking a step forward into sustainability by reducing papers, postage and storage for physical invoices. Additionally, you also save your time from searching invoices once you digitalise your processes.
5. Integration with Hotel Management System
A hotel management system integrated with e-invoicing, such as HotelX, can serve you well to streamline your operations significantly, boosting your efficiency as you do not need to acquire two softwares to perform your duties with the hotel and e-invoicing.
How to Prepare Your Hotel for E-Invoicing?
Now you understand what e-invoicing is and how it benefits your hotel, you might be wondering how you can prepare to adopt the system into your hotel. There are a few steps you need to take for a smooth transition to e-invoicing:
1. Current System Assessment
Before searching for an e-invoicing software, you need to assess your current invoicing and financial system. It is recommended to identify what is missing from your current system and what you need when you look for a new one to improve or replace.
2. Understanding Regulatory Requirement
Next, you need to familiarise yourself with the tax regulatory requirements in your region. It is important to read up about e-invoicing on the official website so you can follow the regulations when you shop around for a software to assist your hotel business.
3. Selecting e-Invoicing Software Provider
Once you list down your selection of providers, you need to assess them one by one. Choosing the best e-Invoicing software provider is crucial as you need a provider that is trusted and reliable. Check their websites, product pricing and reviews to ensure that you are choosing the best for your operations.
4. Data Migration and Validation
When you finally acquire an e-invoicing software, it’s time to plan for data migration and validation. You can ask for assistance from your provider’s support team to help with the migration and validation to ensure none of your data is lost or corrupted during the process.
The implementation of e-invoicing in Malaysia signifies a digital transformation for businesses in the country, especially for the hotel industry. Once hoteliers know what they need for the move, choose their providers and software, they are ready to fortify their finances, reduce costs and mitigate risks of penalties. If you’re looking for an e-invoicing software provider, IFCA is here to offer you their solution: EIX, having implemented it in 200+ businesses.
