Retail SME Using Overseas POS for LHDN e-Invoicing

Business Background

The client is a Malaysian retail SME operating 15 outlets across the Klang Valley and Johor. They specialize in consumer lifestyle products and manage a high volume of daily transactions.

Their core operations rely on a sophisticated Point-of-Sale (POS) system developed by a vendor based in China. This system is integral to their inventory management, loyalty program, and reporting, but it does not natively support the specific API requirements of LHDN's MyInvois system.

Challenges Faced

Foreign System Limitations: The overseas POS vendor had no immediate roadmap to integrate with the Malaysian tax authority's API.
High Transaction Volume: With hundreds of daily receipts per outlet, manual entry into the MyInvois portal was operationally impossible.
Consolidated Invoice Requirement: B2C transactions needed to be aggregated into a monthly consolidated e-Invoice, a feature not supported by their POS.

Why a Middleware Approach Was Selected

The management considered replacing the POS system entirely with a local alternative. However, this was deemed impractical due to:

High Switching Costs: Retraining staff and migrating data would be expensive and disruptive.
Loss of Features: Local POS options lacked specific inventory features critical to their business model.
Time Constraints: The implementation timeline for a new system would risk missing LHDN compliance deadlines.

Consequently, a middleware solution was selected to bridge the gap between the existing POS and LHDN MyInvois.

Integration Approach: CSV Upload

The team opted for a CSV-based batch integration. This method was chosen for its simplicity and reliability, requiring minimal technical intervention from the overseas vendor.

How it works:

Data Export: At the end of each day, outlet managers export sales data from the POS as a standard CSV file.
Upload: The finance team uploads these files to the our middleware portal.
Processing: The middleware validates the data, aggregates B2C receipts for consolidation, and formats it for LHDN.
Submission: Validated e-Invoices are submitted to MyInvois automatically.

Learn more about CSV Integration

Implementation Scope

To ensure a successful rollout, the project scope was strictly defined:

Included:

Mapping existing POS data fields to LHDN e-Invoice schema.
Configuration of Consolidated e-Invoice logic for B2C sales.
Setup of validation rules to catch common data errors (e.g., missing TIN format) before submission.
User training for the finance team on exception handling.

Excluded:

Modifications to the core POS source code.
Real-time API integration (due to POS limitations).

Outcome and Results

The implementation allowed the retailer to meet LHDN requirements without disrupting daily store operations.

Operational Continuity

Store staff continue to use the familiar POS interface with zero change to their checkout workflow.

Automated Compliance

The monthly consolidated invoice generation, which would take days manually, is now completed in minutes.

Error Reduction

Middleware validation catches format errors early, preventing rejection penalties from LHDN.

Full Visibility

Finance HQ has a central dashboard to view the submission status of all 15 outlets.

Key Takeaways

Middleware bridges the gap: You do not need to replace overseas software to be compliant in Malaysia.
CSV is a viable strategy: For systems without API access, file-based integration is robust and accepted.
Consolidation requires automation: High-volume retailers must have a system to aggregate B2C receipts automatically.

This case study reflects a real implementation scenario in Malaysia. Client details, including brand names and specific locations, have been anonymized to protect commercial confidentiality.