Is your company ready for E-invoicing?

Will Electronic Invoices Serve as the Catalyst for IFCA MSC BHD?

* The original article was published in Chinese by Sin Chew on November 6, 2023, and below is the translated edition.

The budget proposal for the year 2024, released last month, includes an announcement that the government will gradually implement the long-anticipated Electronic Invoicing (E-invoicing) tax reporting system starting from August next year. This marks a significant step towards a new era in our country’s tax system.

To comply with the new reporting system, businesses must start exploring the relevant systems and software, whether they like it or not, to ensure their companies can meet the new tax authority regulations. This brings to mind the situation when the Goods and Services Tax (GST) was implemented in the past.

Interestingly, IFCA MSC BHD (IFCAMSC, 0023, ACE Market, Technology Sector), the business software solutions company that gained popularity eight years ago as the beneficiary of the GST implementation, is once again poised to be a potential winner.

Global Contributions Surpass Those Made Domestically, Showcasing Substantial Potential for Growth

Founded in 1987, IFCA MSC BHD is a leading technology company that specializes in providing business software solutions for the real estate sector. Over the past 36 years, the company has focused on serving the real estate and related markets, building a strong market reputation, experience, and a track record of excellence. With outstanding performance in the domestic market, the company later expanded steadily into overseas markets, including China and Indonesia. IFCA MSC BHD has sales partners in multiple Asian countries, making it a regional company with over 500 employees.

A Business Software Solutions Specialist that Prioritizes Quality over Quantity

As a specialist in business software solutions, the company has always prioritized quality over quantity. Whether it’s the focus on the real estate sector, a strong balance sheet, or the systematic approach to business expansion, it’s obvious that the company’s leadership has shown stability and a clear sense of direction, never losing sight of its long-term goals.

The company has been relentless in researching and developing new technological solutions, ensuring it stays aligned with market demands and expands its business opportunities. Besides real estate sector, the company has also introduced tailored business software solutions for related fields. Apart from “PropertyX,” a cloud-based all-in-one management system tailored for the industry’s ecosystem, there are also solutions for human resources management (“HRX“), hotel management (“HotelX“), and construction management (“ContractX“).

All these carefully crafted management solutions are developed after thorough research of industry operations and understanding the challenges and weaknesses faced by businesses. They aim to assist clients in automating their business processes in addition to improving and monitoring operational efficiency. The practicality and quality of its solutions are one of the key factors that has allowed the company to stand strong in a highly competitive market for many years.

With a deep understanding and focus on real estate-related fields, the company has positioned itself as an expert in real estate software solutions, establishing a leading position in the domestic market. The accumulated experience and successful cases have become essential assets as the company expands into overseas markets. In addition to Malaysia, the company has solidified its business foundation in China over the years and is gradually catching up in Indonesia. Its overseas business contributions now surpass those from the domestic market, indicating significant growth potential.

Business Operations in China are Impacted; Proactively Adapted to the Challenge

The domestic real estate sector has been in a downturn in recent years, affecting the willingness to launch new property projects. Coupled with the impact of the COVID-19 pandemic and severe challenges in the Chinese real estate market, the company’s business has faced setbacks in recent years. However, the company has shown resilience through proactive measures, including the introduction of the new “X” series mobile network solutions, market penetration, and careful cost control. With a strong balance sheet, the company has managed to remain profitable even as its revenue declined (except for last year when there was a net loss of RM4.13 million due to provisions). This stability is noteworthy.

Although recovery in the two core markets (Malaysia and China) will take time, it does not mean that the company’s growth opportunities will be deprived. Software solutions are designed to help clients improve their operational processes and efficiency, allowing them to benefit from technological advancements and gain a competitive edge. In today’s business world, this has become an indispensable part, and the cost is often a minimal part of the total expenses for clients. Companies that can provide robust software solutions tend to have high customer retention rates, and IFCA MSC BHD’s track record has proven that it meets these requirements.

Stimulating Revenue with the "X" Series Solutions

In the fiscal year 2022, despite a 5.46% year-on-year decline in group revenue to RM75.45 million, the company achieved a 15% increase in revenue in the Malaysian market, driven by the introduction of the “X” series mobile network solutions. This indicates that the company has the ability to break through the growth constraints imposed by the weakness in its core markets through internal growth strategies.

The cloud-based “X” series solutions are part of the company’s response to the digital transformation trend in the business world. They enable customers to process their business using mobile devices from anywhere, further digitizing operations. These solutions have gained market favour, and the company plans to strengthen and localize the “X” series solutions, before launching it in the Indonesian market.

As for the challenged Chinese business in the past year, it is gradually recovering as economic activities return to normal. While uncertainties remain in the future, the potential in the Chinese real estate market is immense. The company’s strong track record in providing software solutions to top local developers and its established business network will likely help expand the local market’s potential and create growth opportunities in the medium to long term.

For the six months ending on June 30, 2023, IFCA MSC BHD’s revenue grew by 4.17% year-on-year to RM36.02 million, turning from a loss to a profit of RM840,000. Despite ongoing challenges in the real estate market, both domestic and international business performances have improved, which is a positive sign.

Electronic Invoicing Tax Reporting System - Covering All Enterprises

The electronic invoicing tax reporting system is set to be gradually implemented, covering all enterprises in the country within 18 months. This major tax reform is expected to be a headache for many enterprises as they will need to adapt to the new reporting method and continuously submit a large number of electronic invoices for approval by the tax authority. These invoices must also comply with the tax authority’s requirements, or they will have to be modified and resubmitted. This is likely to create significant challenges for businesses that are not adequately prepared.

It is known that enterprises can submit electronic invoices through two methods. The first method is to manually upload them by logging into the MyInvois platform, while the second method is to automatically submit them through an Enterprise Resource Planning (ERP) system integrated with a direct Application Programming Interface (API). For large enterprises that generate a significant number of electronic invoices daily, the second ERP submission method is more efficient and can save a lot of trouble. This is a potential business opportunity that IFCA MSC BHD is eyeing.

If you visit the company’s official website and social media pages, you will notice that the company has been actively sharing information online and offering consultation and registration services since the timeline for implementing the electronic invoicing system was released. This indicates that the company has recognized the emerging significant business opportunity and is making efforts to seize a piece of the pie.

In summary, IFCA MSC BHD has built a strong business foundation over the years through its focus and dedication. It now possesses highly competitive software solutions, strong research and development capabilities, a customer base of 1,300 leading developers, a talented workforce, and a very healthy balance sheet. These factors clearly demonstrate its ability to continue breaking new ground in business heights. While short-term challenges are inevitable, the long-term outlook is indeed promising.