Month: May 2024

10 Advantages of Outsourcing Your Payroll Services

10 Advantages of Outsourcing Your Payroll Services

10 Advantages of Outsourcing Your Payroll Services

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Payroll outsourcing is a strategic approach where businesses entrust their payroll functions to external service providers. This arrangement benefits businesses of all sizes by simplifying payroll processes and ensuring compliance with regulations.

In this article, we explore the top 10 advantages of outsourcing your payroll services.

Save Time and Resources

Outsourcing payroll reduces the administrative burden on internal HR teams, allowing them to focus on core business functions. It frees up valuable time and resources that can be allocated to strategic initiatives. With payroll tasks handled externally, HR professionals can dedicate their efforts to talent management, employee development, and other critical areas that drive organisational success.

Cost Reduction

Businesses can potentially save on salaries, benefits, and software for in-house payroll staff by outsourcing payroll services. Additionally, outsourcing eliminates the need for costly infrastructure investments in payroll processing. By leveraging the expertise and economies of scale of external providers, businesses can achieve significant cost savings while ensuring accurate and compliant payroll processing.

Increased Accuracy and Compliance

Outsourced payroll providers specialise in navigating complex tax regulations, reducing the risk of errors and penalties. They also stay updated on compliance changes, ensuring accurate and compliant payroll processing. With stringent quality control measures and dedicated payroll teams with expertise in payroll compliance, outsourced payroll providers helps to mitigate the risks associated with payroll processing errors, ensuring payroll accuracy and regulatory compliance.

Increased Accuracy and Compliance
Enhanced Security

Reputable payroll providers have in place strong data security measures to protect sensitive employee information. Outsourcing payroll reduces the risk of internal fraud or data breaches, enhancing overall security. With advanced encryption protocols, secure data centres, and comprehensive cybersecurity measures, outsourced payroll providers safeguard confidential employee data, providing businesses with peace of mind and mitigating risks associated with data breaches.

Scalability and Flexibility

Outsourced payroll services offer scalability and flexibility to accommodate business growth or fluctuations in staffing levels. Businesses can easily adjust payroll services without hiring or training additional staff. Whether scaling operations to support expansion initiatives or adjusting payroll services to align with seasonal staffing changes, outsourcing payroll provides businesses with the flexibility to adapt quickly to evolving business needs, ensuring seamless payroll operations.

Access to Expertise

By outsourcing payroll, businesses gain access to the expertise of payroll specialists who stay in the know of best practices and industry trends. This knowledge enhances payroll accuracy and efficiency. With dedicated payroll professionals managing payroll tasks, businesses can leverage the expertise of seasoned professionals with specialised knowledge in payroll processing, tax compliance, and regulatory requirements, ensuring accurate and efficient payroll operations.

Payroll processing
Improved Employee Satisfaction

Timely and accurate payroll processing contributes to employee satisfaction and morale. Some payroll providers offer self-service portals, allowing employees to access pay slips and tax documents conveniently. By providing employees with timely and accurate salaries, and access to comprehensive payroll information and self-service tools, businesses can enhance employee satisfaction, engagement, and retention. This fosters a positive workplace culture and strengthens employee relations.

Streamlined Administration

Outsourcing payroll centralises payroll tasks with a single provider, simplifying record-keeping, reporting, and auditing processes. This simplified administration enhances efficiency and compliance. With integrated payroll solutions and automated processes, businesses can streamline payroll administration tasks, reduce manual errors, and ensure consistent payroll processing, optimising operational efficiency and ensuring smooth payroll management.

Reduced Stress

Outsourcing payroll shifts the burden of payroll complexities to dedicated service providers, reducing stress for internal HR teams. It allows HR professionals to focus on strategic initiatives rather than routine tasks. By partnering with experienced payroll providers, businesses can lessen the administrative burden associated with payroll processing, allowing HR professionals to focus on strategic initiatives such as organisational development, talent acquisition and employee engagement.

Focus on Core Business Functions

By outsourcing payroll, businesses can invest time and resources in key areas that drive growth and profitability. This focus on core business functions enhances overall efficiency and competitiveness. With payroll tasks entrusted to external providers, businesses can redirect resources to main functions to drive sustainable business growth.

Tailored support with transfer pricing in Malaysia

BoardRoom's Expert Outsourced Payroll Solutions

Outsourcing payroll services offers numerous advantages, including cost savings, enhanced accuracy and compliance, and improved employee satisfaction. At BoardRoom, we offer comprehensive outsourced payroll services designed to simplify your payroll processes and ensure compliance with regulatory requirements. From payroll calculation and withholding tax to employee record maintenance and statutory reporting, BoardRoom handles all aspects of payroll administration with our team of experienced payroll specialists and cutting-edge technology.

Contact us today to experience seamless and stress-free payroll management.

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IPO Application: A Guide to Listing Your Company in Malaysia

IPO Application_ A Guide to Listing Your Company in Malaysia

IPO Application: A Guide to Listing Your Company in Malaysia

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An Initial Public Offering (IPO) marks a significant milestone in a company’s journey, allowing it to transition from private ownership to a publicly traded entity. Malaysia stands out as a compelling listing destination for companies considering an IPO. With a robust regulatory framework, diverse investor community, and vibrant capital market ecosystem, Malaysia offers a conducive environment for companies to unlock their growth potential and thrive in the competitive business landscape.

Benefits of Getting Publicly Listed

Getting your company listed on an exchange provides many benefits, some of which are:

Access to capital
By getting listed, a company can tap into a broader pool of investors in the capital market, enabling it to raise funds for company expansion, research, development, or other strategic initiatives.
Facilitate growth
Listing can provide a pathway for mergers and acquisitions, offering the company access to potential partners or targets for strategic growth and consolidation in the market.
Enhance credibility
Being listed means the company will be imposed with regulatory and reporting requirements by the stock exchange. This in turn foster transparency and good governance practices, which can enhance the company’s reputation and credibility among stakeholders.
Greater visibility and branding
Listing on a stock exchange can significantly increase a company’s visibility, boosting its brand recognition and awareness, and potentially attracting new customers, partners, and opportunities.
Incentive for employees
As a listed company, the business can offer stock options or other equity incentives tied to the company’s performance to align the interests of employees with the company’s long-term success. Employee stock ownership plan (ESOP) is a powerful tool to attract and retain talent. It can also motivate employees to contribute to its growth and profitability due to employees’ ownership in the company.
Liquidity of shares
Listing provides liquidity to existing shareholders by creating a platform where they can easily buy or sell shares, thereby widening the investor base and potentially increasing demand for the company’s stock.

Eligibility and Requirements

When it comes to IPO application and listing your company on Bursa Malaysia, there are a few things to consider:

  1. Listing Boards: Bursa Malaysia offers different boards where companies can list their shares. These include the Main Market for the listing of established companies, ACE Market which is a sponsor-driven alternative market for companies with growth prospects, and LEAP Market which is an advisor-driven market for high-growth potential companies to raise capital and access funding from sophisticated investors.. Each board has its own set of rules and requirements.
  2. Criteria: Companies must meet certain criteria to be eligible for IPO application and listing. This includes showing profitability, having a good track record, and meeting corporate governance standards such as having independent directors.
  3. Minimum Share Capital: There are also requirements for the minimum amount of share capital that a company must have for it to be listed on the exchange.

Understanding these eligibility criteria and requirements is essential for companies considering an IPO in Malaysia.

IPO application

The Listing Process

Embarking on the journey of IPO application and listing your company on Bursa Malaysia involves several important steps.

Overview of the Steps

It begins with initial planning and preparation, where the company evaluates its readiness for going public. This is followed by the submission of the IPO application to the exchange, due diligence processes, prospectus development, and eventually, listing day.

Importance of Professional Advisors

Seeking guidance from professional advisors such as investment banks and solicitors is crucial throughout the IPO application process. These experts provide valuable insights, assist in navigating regulatory requirements, and ensure compliance with listing rules.

Key Milestones During the IPO Application Process

Due Diligence Process
Companies undergo a thorough examination of their financial, legal, and operational aspects during the IPO application process to ensure transparency and mitigate risks. The company’s management team plays a key role in the due diligence process in providing accurate and comprehensive information about the company’s business, operations, financials, legal matters, and other relevant areas to the underwriters, investment banks and external advisors such as the legal and accounting firms.
Prospectus Development and Approval
The prospectus, containing comprehensive information about the company and the IPO, is prepared and submitted for approval by regulatory authorities.
Marketing and Investor Roadshows
Companies engage in marketing activities and roadshows to generate interest among potential investors, showcasing their business prospects and investment opportunities. This is typically managed by the invetsment banks or underwriter. In some cases, companies may engage external public relations or investor relations firms to assist with marketing efforts and investor communications during the IPO process.
Pricing and Allocation of Shares
Determining the offer price and allocating shares to investors are critical steps in the IPO process, balancing the company’s valuation with market demand. An experienced share registrar ensures that accurate records of these shareholders are maintained, including contact information and the number of shares held. In the distribution of shares to investors, the registrar also ensures that shares are allocated correctly according to the IPO offering terms and that investors receive the appropriate documentation confirming their ownership.
By understanding and effectively navigating through these key milestones, companies can successfully execute their IPO application and achieve their growth objectives.
Pricing and Allocation of Shares

Costs and Considerations When Applying For an IPO

Before proceeding with an IPO in Malaysia, it’s essential to consider the following:

Expected Fees for IPO Application

Companies should anticipate various fees associated with the IPO application process, including advisory fees for professionals such as investment banks and solicitors, underwriting fees if the company uses the services of an underwriter to facilitate and manage the IPO, as well as expenses related to regulatory filings and compliance.

Timeline of the IPO Process

Understanding the timeline for a typical IPO in Malaysia is crucial for effective planning. While timelines may vary depending on various factors, including regulatory approvals and market conditions, companies should expect the process to take several months from initial planning to listing day.

Additional Considerations

Tax Implications
Companies need to assess the tax implications of going public, including potential capital gains taxes and other applicable taxes during the IPO application process. Seeking advice from tax professionals is advisable to ensure compliance with tax laws and optimise tax efficiency.
Post-Listing Compliance Requirements
After listing, companies are subject to ongoing compliance requirements imposed by regulatory authorities and stock exchange rules. This includes financial reporting obligations, disclosure requirements, and adherence to corporate governance standards. Being prepared to fulfil these obligations is essential for maintaining regulatory compliance and sustaining investor confidence.

By considering these costs and additional factors upfront, companies can better navigate the IPO application process in Malaysia and position themselves for a successful transition to the public market.

Tips on Your IPO Application Process

Listing your company on Bursa Malaysia offers numerous advantages:

  • Benefits of Listing: It provides access to capital for growth, enhances visibility and credibility, and creates opportunities for expansion and strategic partnerships.
  • Importance of Careful Planning: Successful IPOs require thorough planning and preparation. Companies must assess their readiness, adhere to regulatory requirements, and engage professional advisors to navigate the complexities of the process.
  • Professional Guidance: Seeking guidance from experienced professionals, including investment banks and legal advisors, is crucial for a smooth and successful IPO
  • Alternative Fundraising Options: For companies not yet ready for an IPO, there are alternative fundraising options to consider. These may include private equity investments, venture capital funding, or debt financing. Each option offers its own benefits and considerations, providing companies with flexibility in their capital-raising strategies.

By weighing the benefits, planning meticulously, and seeking professional support, companies can leverage the opportunities presented by listing on Bursa Malaysia to fuel their growth and achieve long-term success in the dynamic business landscape.

    IPO Application Process

    BoardRoom's Expert IPO Application Services

    When it comes to navigating the intricate process of IPO application in Malaysia, BoardRoom emerges as a trusted partner. With more than 50 years of experience and expertise in corporate services, BoardRoom offers comprehensive support and guidance tailored to meet the unique needs of companies venturing into the IPO landscape. From ensuring regulatory compliance to facilitating due diligence and prospectus development, our team of seasoned professionals is dedicated to orchestrating a seamless IPO journey.

    As a full-suite share registry provider, we also provide services such as corporate action services, share registry maintenance and coordination, AGM meeting and scrutineering services , corporate secretarial and corporate governance advisory services.

    Contact us today to help your business navigate the complexities of the IPO application process and increase the chance of successfully listing on Bursa Malaysia.

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    Guide to e-invoicing: A fast track to compliance with Malaysia’s e-invoicing transition

    Guide to e-invoicing A fast track to compliance with Malaysia’s e-invoicing transition

    Guide to e-invoicing: A fast track to compliance with Malaysia’s e-invoicing transition

    boardroomsuperadmin

    E-invoicing was announced in Malaysia as the Inland Revenue Board’s (IRB) solution to combating the issue of the shadow economy and revenue leakage. With the first major deadline in August 2024 fast looming, now is the time for businesses to start preparing for the transition.

    E-invoicing implementation is significant for all businesses, and major changes may be required for systems, processes and even strategic direction. While the rollout will be phased, implementation is essential, with all businesses expected to comply by 1 July 2025.

    What is e-invoicing and how can you maximise the benefits for your business? Our comprehensive guide offers you insight into the requirements, what you need to do to switch over and the benefits it can bring.

    How does e-invoicing work?

    An e-invoice is a digital representation of a transaction between a supplier and a buyer. Many companies already issue electronic invoices, such as PDF invoices. However, having such electronic invoices does not necessarily mean being compliant with Malaysia’s e-invoicing requirements as set out by the Inland Revenue Board of Malaysia (IRBM). The Malaysia e-invoice requirements go beyond to include specific processes and reporting formats.

    E-invoicing works by enabling seller’s accounts receivable to input invoices into their financial system, which then sends them in a structured electronic format directly to the buyer’s system. Upon receipt, the buyer’s e-invoicing system automatically processes and imports the data into their accounts payable system, which streamlines the payment process without the need for manual handling.

    Only two formats of e-invoice are acceptable – XML and JSON. Both of these formats are easy for machines to read, which reduces the time it takes for a machine to translate and process the invoice.

    E Invoicing Infographic

    What is the timeline for implementation?

    There are a number of dates that you need to be aware of in the transition. It’s critical to be mindful of the timeline, as e-invoicing implementation can take up to three to four months to complete.

    The following table provides a breakdown of the key dates for the e-invoicing implementation rollout based on business turnover.

    Annual Revenue of businessesImplementation Date
    Businesses with an annual turnover greater than RM 100 million1 August 2024
    Businesses with an annual turnover greater than RM 25 million and up to RM 100 million 1 January 2025
    All businesses 1 July 2025

    The above timeline is subject to changes. Please refer to LDHN website for detailed guidelines and updates.

    Exemptions from e-invoicing requirements

    Certain types of income expenses do not require an e-invoice.

    These include:

    • Employment income
    • Pensions
    • Alimony
    • Dividend distribution by companies listed in Bursa Malaysia, or companies that are not required to deduct tax under Section 108 of the Income Tax Act 1967
    • Zakat

    While government bodies, local authorities and statutory bodies are exempt from the e-invoicing requirements, they may voluntarily choose to participate. A complete list of exemptions is detailed in the IRBM’s official e-invoice guidelines.

    A step-by-step guide to e-invoicing implementation

    A step-by-step guide to e-invoicing implementation

    E-invoicing implementation is quite complex. The process may include upgrading infrastructure, integrating systems and training staff to ensure a smooth transition.

    Here is a step-by-step guide to help you understand the process and how you can best implement e-invoicing.

    1. Confirm business turnover

    Your turnover will dictate when you must transition to e-invoicing. Refer to your 2022 audited financial statement or tax return to confirm your business turnover.

    If you had a change of accounting year end for financial year 2022, your turnover or revenue will be pro-rated to 12 months. This will be used to determine your implementation date.

    2. Conduct a gap assessment analysis

    Cheong Woon Chee, Head of Tax Services, BoardRoom Malaysia, says that a gap assessment analysis is a critical next step in the process.

    “A gap assessment will help you to determine what you need to do to meet the e-invoicing implementation requirements,” explains Woon Chee. “This should encompass current systems and processes but also the people and the training you’ll need to undertake in preparation for the transition.”

    A comprehensive gap assessment should include the following components:

    Accounting system compatibility
    Evaluate the compatibility of the current accounting system with e-invoicing requirements.
    Invoice format compliance
    Ensure the invoice format adheres to the required e-invoicing standards.
    Self-billing e-invoices
    Determine the need for self-billing e-invoices.
    Transaction management
    Assess how transactions with both B2B and B2C buyers will be managed.
    Legal and contractual review
    Conduct a thorough review of all legal documents, including contracts and employment agreements.

    Once a gap assessment analysis has taken place, a tailored gap closure strategy should be developed that addresses the identified gaps. The strategy should provide detailed recommendations and action plans to ensure a seamless transition to e-invoicing. By understanding the requirements thoroughly, you can plan effectively, working backwards from the implementation date to ensure you are ready on time.

    Having this lead time also gives you the opportunity to start talking to your clients, partners and service providers. They are critical in the transition, so it’s important to engage them early to understand their timelines and requirements.

    3. Determine the best model for your needs

    You have a choice between two e-invoicing models, which will depend on your business needs and size.

    The first model uses the MyInvois portal, hosted by the IRB. This portal is available to all taxpayers, and Woon Chee says that if you’re processing around 20 invoices or less a month, MyInvois is a cost-effective solution.

    “The other option is an application programming interface (API),” explains Woon Chee. “APIs are more suitable for businesses or taxpayers that process a substantial number of transactions.

    “It is likely that your current systems will need enhancements or upgrades to support an API configuration, which comes with an upfront investment.”

    Train staff on the new system

    4. Train staff on the new system

    E-invoicing implementation involves training in the lead up to the transition as well as after the transition to ensure a seamless changeover.

    “E-invoicing isn’t like the standard invoices staff are familiar with,” adds Woon Chee. “Initially, training should focus on awareness before moving to additional rounds of training that go into detail about the new process.”

    Training is crucial and should cover the strategic approaches the organisation is taking to implement e-invoicing effectively across departments, the tax implications and the compliance requirements. Staff must understand the effects e-invoicing will have on existing accounting processes, especially as the new forms now feature over 50 mandatory fields, raising the chance of errors. Post-implementation training can help identify errors and ensure they are rectified moving forward.

    5. Understand the PEPPOL network

    The Malaysian e-invoicing requirement is powered by the Pan-European Public Procurement Online (PEPPOL) network. PEPPOL is not a provider. It is an enabler that allows any organisation to send and receive business documents – in this case, e-invoices – through PEPPOL-accredited service providers.

    While businesses aren’t required to use a PEPPOL service provider for e-invoicing, there are benefits to doing so. Namely, a PEPPOL-enabled solution ensures effortless compliance and security, seamless integration and error-free automation with real-time insights into your e-invoice progress.

    6. Apply for grants and tax incentives

    There are grants and tax incentives available to support you with the costs of investing in the infrastructure required to transition to e-invoicing.

    These include:

    Digital grant
    Micro, small, and medium enterprises (MSME) can apply for a grant of up to RM 5,000 (total allocation of RM 100 million) to upgrade digital sales, inventory and accounting systems.
    Tax deduction
    From YA2024 to YA2027, MSME can receive a tax deduction of up to RM 50,000 for each Year of Assessment (including consultation fees incurred for e-invoicing implementation).
    Capital allowance
    The capital allowance claim period has been reduced from four years to three years. Capital allowance can be claimed on the purchase of ICT equipment and computer software packages, as well as consultation, licensing and incidental fees related to customised computer software development.

    What are the benefits of e-invoicing?

    According to the IRB, the benefits of e-invoicing include reducing manual work and associated human error. It will also help streamline operational efficiency, facilitate efficient tax filing, and digitise financial reporting to be in line with industry standards.

    The Malaysia Digital Economy Corporate (MDEC) shares similar sentiments around the way e-invoicing will increase business efficiency, improve cash flow and facilitate effective tax reporting.

    The BoardRoom team can see a range of benefits for our clients. Eunice Hooi, BoardRoom’s Managing Director Asia, Tax, explains that one of the biggest benefits is the minimisation of inaccuracies thanks to real-time monitoring.

    “Shifting to e-invoicing will reduce inaccuracies, as both income and expenses are verified on the spot rather than retrospectively. This immediate validation allows businesses to promptly address any discrepancies identified by the tax authorities, such as disallowed expenses,” says Eunice.

    What are the benefits of e-invoicing

    The key benefits of implementing e-invoicing include:

    • Seamless compliance through adherence to the e-invoicing mandates, PEPPOL standards and data security.
    • Eliminate errors with automated creation, validation, delivery and archiving of invoices.
    • Smooth integration with existing ERP and business applications, enhancing overall business operations.
    • Gain real-time insights into the status of invoices to ensure timely payments, resulting in visibility and control.
    • Save time and resources by digitising and automating invoicing processes, boosting cost savings and efficiency.

    The switch to e-invoicing is not just a system change. It’s a complete mindset shift. A reliable partner will be a critical part of ensuring a seamless transition and maximising your investment.

    “We are currently working very closely with some of the API and IT solution providers,” adds Eunice. “Aside from tax services and outsourced accounting services, we can provide our clients with an integrated service, including the IT component with a PEPPOL-Enabled Solution.”

    BoardRoom offers a range of services to support you with your e-invoicing implementation. From standalone comprehensive project management service to training workshops or ad hoc consulting, we can tailor a solution to your needs. As your strategic partner, the BoardRoom team will help you to navigate the transition with ease.

    “As outsourced accountants and tax experts, we can work with the finance team to advise them on strategically leveraging the e-invoicing data for tax optimisation,” explains Eunice. “For example, we can identify the deductible expenses immediately and ensure we maximise the tax credit and tax deduction without delay.”

    Your partner in e-invoicing

    With the right experts on your side, you will set your business up with a strategic advantage to leverage the benefits of the e-invoicing requirements. Learn more about BoardRoom’s e-invoice solutions to save you time and money for your e-invoicing transition and beyond. Our expert accounting and tax teams will ensure a smooth and compliant transition, providing you with support every step of the way.

    Contact BoardRoom for more information:

    Eunice Hooi

    Eunice Hooi

    Managing Director Asia, Tax

    E: [email protected]

    T: +60-3-7890 4800

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