Using Overseas POS Systems for LHDN e-Invoicing in Malaysia

Many Malaysian businesses—particularly in retail, hospitality, and food service—rely on Point-of-Sale (POS) systems developed by overseas vendors. These systems are often feature-rich, cost-effective, and widely adopted across global markets. However, most overseas POS systems were not designed with Malaysia's LHDN MyInvois e-Invoice requirements in mind.

This creates a practical challenge: how can businesses comply with the MyInvois mandate without replacing their entire POS infrastructure? This article explores the limitations of overseas POS systems, common workarounds, and practical integration options available to Malaysian businesses.

Why Many Malaysian Businesses Use Overseas POS Systems

The prevalence of overseas POS systems in Malaysia is not accidental. Several factors contribute to their widespread adoption:

Cost Considerations

Overseas POS vendors, particularly those from China, Taiwan, and other Asian markets, often offer competitive pricing compared to locally developed systems. For price-sensitive SMEs, this can be a decisive factor.

Industry-Specific Features

Many overseas POS systems are tailored for specific industries—such as fashion retail, F&B, or electronics—and include advanced features like loyalty programs, inventory forecasting, and multi-outlet management. These capabilities may not be readily available in local alternatives.

Cloud Availability and Global Vendors

Cloud-based POS systems from global vendors offer scalability, remote access, and automatic updates. For businesses with multiple locations or franchise models, these features are highly attractive.

Historical System Adoption

Some businesses have been using the same overseas POS system for years or even decades. Staff are trained, workflows are established, and historical data is stored within the system. Switching to a new platform would be disruptive and expensive.

Limitations of Overseas POS Systems with MyInvois

While overseas POS systems excel in many areas, they were not designed to comply with Malaysia-specific regulatory requirements. The following limitations are commonly encountered:

Common Workarounds Businesses Attempt

Faced with these limitations, many businesses attempt interim solutions. While understandable, these workarounds often prove unsustainable at scale:

Manual MyInvois Portal Submission

Some businesses manually enter invoice data into the LHDN MyInvois portal. This approach works for very low volumes (e.g., a few invoices per day), but quickly becomes impractical for businesses processing dozens or hundreds of transactions daily. Manual entry is also prone to human error and delays.

Spreadsheet-Based Re-Entry

Another common workaround involves exporting POS data to Excel, manually reformatting it, and then uploading it to the MyInvois portal or a third-party tool. This process is time-consuming and introduces multiple points of failure.

Waiting for POS Vendor Roadmap Updates

Some businesses hope that their POS vendor will eventually release a MyInvois integration. While this may happen, there is no guarantee of timing, and businesses cannot afford to wait indefinitely as compliance deadlines approach.

Why These Approaches Don't Scale: All of these workarounds rely on manual intervention, which is inefficient, error-prone, and unsustainable for businesses with high transaction volumes or multiple outlets.

Practical Integration Options for Overseas POS Systems

Fortunately, there are more scalable and reliable integration options available. These approaches allow businesses to comply with MyInvois requirements without replacing their POS systems:

CSV-Based Integration

Many overseas POS systems can export transaction data as CSV files. Businesses can upload these files to a middleware platform, which then processes and submits the data to MyInvois. This approach is simple, requires no API development, and works well for batch-oriented operations. Learn more about CSV-based integration.

API-Based Middleware Approach

For businesses with more technical resources, an API-based integration allows the POS system to send invoice data directly to a middleware platform via API calls. This enables near real-time submission and status tracking. Explore API integration options.

SFTP Batch Automation

For high-volume operations, SFTP (Secure File Transfer Protocol) automation allows the POS system to automatically transfer files to a middleware server on a scheduled basis. This approach is ideal for businesses processing hundreds or thousands of invoices daily.

The Role of e-Invoice Middleware

e-Invoice middleware acts as an intermediary between your overseas POS system and LHDN's MyInvois platform. It performs several critical functions:

• Data Mapping: Converts POS data into the LHDN e-Invoice schema.
• Validation: Checks for missing or incorrect fields before submission.
• Submission: Sends validated invoices to MyInvois via the official API.
• Status Tracking: Provides visibility into submission outcomes (success, rejection, pending).
• Error Handling: Flags rejected invoices for review and correction.

Why Middleware Avoids POS Replacement: By acting as a bridge, middleware allows businesses to preserve their existing POS investment while achieving MyInvois compliance. This reduces cost, minimizes operational disruption, and accelerates time to compliance.

For a real-world example, see our case study on a retail SME using an overseas POS system. To explore integration methods in detail, visit our integrations overview.

Official Guidance and References

Businesses should always refer to official LHDN guidance when planning their e-Invoice implementation. The regulatory landscape may evolve, and it is important to stay informed about the latest requirements and timelines.

Key official resources include:

• LHDN MyInvois Overview Page – General information on the e-Invoice mandate.
• LHDN MyInvois API Documentation – Technical specifications for developers and system integrators.

Note: These links are provided for reference and do not constitute an endorsement. Businesses should verify the accuracy and applicability of official guidance to their specific circumstances.

Key Considerations Before Choosing an Approach

Before selecting an integration method, businesses should evaluate the following factors:

• Existing POS Capabilities: Can your POS export data in a structured format (CSV, JSON, XML)? Does it support API calls or file transfers?
• Invoice Volume: How many invoices do you process daily? High-volume businesses benefit more from automated solutions like SFTP or API integration.
• Internal IT Resources: Do you have technical staff who can configure API integrations, or would a simpler CSV-based approach be more practical?
• Timeline for Compliance: How much time do you have before the MyInvois mandate applies to your business? Simpler solutions can be deployed faster.

Conclusion

Overseas POS systems are a common and practical choice for many Malaysian businesses, offering cost-effectiveness, advanced features, and proven reliability. However, the LHDN MyInvois e-Invoice mandate introduces new compliance requirements that these systems were not designed to address.

Rather than replacing their POS infrastructure, businesses can leverage middleware solutions to bridge the gap between their existing systems and MyInvois. Whether through CSV-based integration, API connectivity, or SFTP automation, there are practical pathways to compliance that minimize disruption and cost.

Understanding your options—and evaluating them against your business's specific needs—will help you choose the right approach and ensure a smooth transition to e-Invoice compliance.