Category: Business Insights

Common Misconceptions About Outsourcing Accounting Services and the Truth Behind Them

Common Misconceptions About Outsourcing Accounting Services and the Truth Behind Them

Common Misconceptions About Outsourcing Accounting Services and the Truth Behind Them

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Table of contents

  1. Addressing and Debunking the Common Misconceptions
  2. Why Do These Accounting Outsourcing Myths Exist?
  3. How Can BoardRoom Help?
  4. Unlock the True Potential of Outsourcing

 

Outsourcing accounting services has grown to be a strategic approach for businesses looking to streamline their operations, reduce costs, and access professional financial support.

Despite this, many businesses are still sceptical about this approach because of common accounting outsourcing myths surrounding this strategy. These myths have raised unnecessary doubts preventing businesses from reaping the full benefits of outsourcing.

Addressing and Debunking the Common Misconceptions

In this article, we take a look at these common accounting outsourcing myths and address the truth behind them.

Outsourcing Means Losing Control Over Finances

  Myth

Most businesses are afraid that outsourcing their accounting services would mean that they will lose control of their financial data and processes. This is especially the case for big companies with complicated financial systems.

  Fact

Outsourcing doesn’t mean giving up control, it can enhance financial oversight. Trusted providers use advanced tools and employ seasoned professionals to manage your finances effectively while maintaining transparency. These providers implement secure cloud-based accounting systems, allowing businesses real-time access to financial reports, transactions, and key metrics. Additionally, these accounting providers adhere to strict compliance standards and offer customised reporting, ensuring that businesses maintain full visibility and decision-making power.

Moreover, outsourcing is not an all-or-nothing decision. Businesses can choose to outsource only specific, rule-based functions such as Accounts Payable (AP) and Accounts Receivable (AR), while keeping strategic financial functions in-house. This flexible approach allows companies to improve efficiency in high-volume, transactional tasks while maintaining full control over financial strategy and decision-making.

Outsourcing Is Only for Large Companies

  Myth

Many small businesses assume that outsourcing is something only big corporations do and believe it is too complicated or unnecessary for smaller operations.

  Fact

Outsourcing is designed to be flexible and scalable for companies of all sizes. Outsourcing is a game-changing strategy for Small and Medium Sized Enterprises (SMEs). It provides them with access to professional accounting expertise without the high costs of hiring and maintaining an in-house team. By partnering with a corporate service provider that offers a full suite of services, SMEs can outsource essential functions like bookkeeping, payroll processing, and tax preparation – often at a cost-effective bundled rate. This ensures accuracy, compliance, and efficiency while allowing SMEs to focus on growth.

Outsourcing allows businesses to scale services up or down based on their needs, eliminating the burden of fixed overhead costs. With advanced cloud-based accounting systems, SMEs can also enjoy real-time access to financial data, making outsourcing not just cost-effective but also a strategic advantage for business success.

Outsourcing Is Expensive

  Myth

In reality, outsource accounting services is often more cost-effective than hiring and managing an entire in-house accounting department. Expenses such as recruitment, training, employee benefits, and accounting software can quickly add up. By outsourcing, businesses can eliminate these overhead costs and pay only for the services they need.

  Fact

For instance, Slack, the popular workplace communication platform, opted to outsource its accounting and other services in its early stages. By doing so, the company saved on the costs of building an in-house finance team while benefiting from efficient bookkeeping, payroll management, and tax compliance. This allowed Slack to allocate more resources toward product development and scaling its operations, contributing significantly to its growth into a multibillion-dollar company.

Through a partnership with a comprehensive corporate service provider, outsourcing not only reduces costs but also provides access to professional expertise, enabling businesses to focus on strategic growth initiatives.

Outsourcing Compromises Data Security

  Myth

Another common belief is that outsourcing financial data to a third-party service provider will increase the risk of data breaches, leaks or misuse of confidential information.

  Fact

While concerns about data security is understandable, a reliable outsourcing service provider have in place robust security measures to safeguard sensitive financial data. These include high-level data encryption, multi-factor authentication, firewalls and regular security audits to detect and prevent unauthorised access. Additionally, reputable providers often hold industry-recognised certifications such as ISO 27001 (Information Security Management Systems) and SOC 2 (Service Organization Control 2), which demonstrate their commitment to the highest standards of data security and privacy. These certifications require strict compliance with data protection policies, regular risk assessments, and continuous monitoring to mitigate potential threats.

By partnering with a certified corporate services provider, businesses can outsource with confidence, knowing that their financial data is protected by stringent privacy protocols and best-in-class security frameworks.

Outsourced Accountants Lack Industry Knowledge

  Myth

Many businesses assume that outsourced accounting professionals lack an understanding of the specific challenges faced by businesses in their industry.

  Fact

Leading outsourcing companies have teams of experts with experience in various industries, from finance and healthcare to technology and manufacturing. These professionals stay up to date with industry-specific regulations, tax laws, and compliance requirements, ensuring accurate financial reporting and risk management. Reputable corporate service providers typically assign dedicated accounting teams to clients, allowing them to develop a deep understanding of the company’s operations, financial structure, and business goals. Many outsourcing firms also invest in continuous professional development, ensuring that their accountants stay informed about evolving industry trends, regulatory changes, and best practices.

By outsourcing to a provider with sector-specific expertise, businesses gain access to a team that not only manages their financials efficiently but also provides strategic insights, helping them navigate industry challenges and make informed financial decisions.

Why Do These Accounting Outsourcing Myths Exist?

These accounting outsourcing myths stem from outdated perceptions of outsourcing and a lack of awareness about how the industry has evolved. Many businesses remain hesitant due to concerns rooted in traditional accounting practices and fear of change.

Clinging to these myths might cause businesses to miss out on opportunities and benefits such as cost savings, operational efficiency and specialised expertise.

Accounting outsourcing myths

How Can BoardRoom Help?

Partnering with a trusted accounting outsourcing provider can help your business overcome these misconceptions and fully unlock the potential of outsourcing.

BoardRoom offer a range of services designed to streamline your financial operations and support growth.

Our Services: 

  • Bookkeeping & Accounting: From setting up accounts to preparing financial statements, we ensure accurate, timely accounting entries and reporting for informed decision-making.
  • Accounts Payable Management: We handle supplier invoices and payments, and ensure smooth transactions to maintain good relationships.
  • Group Account Consolidation: We provide comprehensive group-level reporting for better financial insights across your business.
  • Cash & Treasury Management: Our automated systems improve cash flow management, reduce bottlenecks, and increase productivity, enabling better decision-making with real-time financial insights.
  • XBRL Conversion: We provide quality XBRL conversion of Financial Statements for filing on MBRS 2.0 platform.

Why Choose BoardRoom?

With a proven track record built over 50 years, BoardRoom is one of the region’s trusted accounting services providers with experience in multiple industries. A comprehensive corporate service provider with corporate secretarial, payroll, accounting and tax services, we can help with: 

  • Cost Savings: Outsourcing reduces overhead costs, freeing up resources for core operations.
  • Compliance: We ensure multi-country regulatory compliance, minimising the risk of penalties.
  • Increased Productivity: Outsourcing allows your team to focus on growth while we manage your financial operations.
  • Enhanced Security: Our cloud-based systems with robust security measures streamline accounting functions securely and efficiently.

Unlock the True Potential of Outsourcing

Outsourcing is often misunderstood due to outdated perceptions and misinformation. It is a strategic tool, which empowers businesses to work more efficiently, save money, and access high-quality capabilities that might not be readily available within the company.

If your organisation is ready to move beyond the myths and reap the real benefits of outsourcing, contact us today and take the first step toward ensuring your business thrives in an ever-competitive world.

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Your Guide to MBRS 2.0

Your Guide to MBRS 2.0

Your Guide to MBRS 2.0

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MBRS 2.0, the Malaysian Business Reporting System, introduces significant updates  for businesses in Malaysia. Released on 25 September 2024 by the Companies Commission of Malaysia (SSM), MBRS 2.0 is developed based on the latest Malaysian Financial Reporting Standard (MFRS), Malaysian Private Entity Reporting Standard (MPERS) and the revised requirements under the Companies Act 2016 (CA 2016).

With immediate effect, companies must use MBRS 2.0 to submit annual returns, financial statements, and exemption applications in the digital XBRL (eXtensible Business Reporting Language) format. This updated platform makes it easier to submit reports with its improved features and more intuitive interface.

In this guide, we’ll explain what MBRS 2.0 is, its main features, and how to use it. Whether you are new to the system or upgrading from the previous version, this guide will help you get started.

What is MBRS 2.0?

MBRS 2.0 is an online system developed by SSM that allows businesses to submit financial statements and other reports electronically. 

Purpose

The system is powered by XBRL, an international standard designed to make financial data processing faster and more accurate. MBRS 2.0 allows businesses submit their annual returns, financial statements, and exemption requests in a structured and seamless manner, reducing administrative burdens and streamlining compliance with legal reporting requirements.

Updates from the Previous Version

The updated MBRS 2.0 is easier to use, with an improved design and user-friendly features that help Malaysian businesses simplify their reporting, while ensuring accuracy and consistency in their submissions. Key improvements include:

  • Better Design: A simpler, more user-friendly interface
  • New Features: Improved access to submission services, allowing users to perform tasks more efficiently.

With these updates, MBRS 2.0 is able to provide a more effective solution for companies navigating Malaysia’s regulatory requirements.

Malaysian Business Reporting System (MBRS) Overview

The MBRS platform facilitates three main types of submissions:

  • Annual Returns (AR): Regular filings that provide updates to SSM detailing business particulars, such as directors, shareholders and registered office address.
  • Financial Statements and Reports (FS): Detailed submissions covering the company’s financial health and status, prepared in compliance with applicable financial reporting standards.
  • Exemption Applications (EA): Requests for exemptions related to the preparation or submission of financial statements and annual returns.
Malaysian Business Reporting Overview

Key Features of MBRS 2.0

MBRS 2.0 introduces various features that make the platform accessible and efficient for Malaysian businesses, contributing to streamlined compliance processes.

Easy-to-Use Interface
MBRS 2.0 has an intuitive design, making it easy for users to find the tools they need. New users can quickly learn to navigate the platform, reducing the learning curve.
Electronic Submission
All submissions through MBRS 2.0 are completed electronically, enabling a fast, secure and paperless process. This feature reduces administrative burden and ensures that companies can submit their documents on time without the need for physical paperwork.
Real-Time Processing
MBRS 2.0 supports real-time processing, allowing for quicker approvals and fewer delays. Businesses benefit from immediate updates on submission status, which helps in managing compliance deadlines more efficiently.
Data Security
MBRS 2.0 incorporates strong security measures to safeguard sensitive business information, keeping users’ data safe and secure throughout submission.
Key Features of MBRS 2.0

Registration Process

To start using MBRS 2.0, you need to register on the platform. Here’s an outline of who can register and how to get started:

Eligibility Criteria

Registration for MBRS 2.0 is available to businesses that need to fulfil their statutory reporting requirements as mandated by the SSM. This includes both public and private companies operating within Malaysia. Each company must comply with the standards applicable to its status (MFRS or MPERS).

Step-by-Step Registration Guide

The registration process for MBRS 2.0 is straightforward:

  • Create an Account: Visit the SSM MBRS portal (mPortal) and complete the registration form.
  • Provide Required Documentation: Certain documents such as business registration or identification details may be required for verification. Ensure these are ready before starting your registration.
  • Complete Registration: Follow the on-screen instructions to complete your profile and register your company on MBRS 2.0.

Common Issues and Solutions

While the registration process is streamlined, some users may encounter issues. Here are common challenges and solutions:

  • Login Issues: Double-check your login details and make sure your internet connection is stable.
  • File Errors: Ensure documents meet file requirements such as file format, file size and file naming conventions.
  • Verification Delays: Look out for verification emails which may end up in your spam/junk folders, and follow the instructions in the email to complete the verification process.

Submitting Financial Statements

Once registered, businesses can submit their financial statements and reports directly through MBRS 2.0.

Types of Reports Required
MBRS 2.0 requires submissions that accurately reflect the company’s financial health, including:
  • Balance Sheets
  • Profit and Loss Statements
  • Cash Flow Statements
These financial statements provide regulators with insights into the business’s performance, financial standing, and compliance with Malaysian regulations.
Submission Deadlines
Submitting reports on time is essential to avoid penalties. Companies should adhere to the reporting deadlines stipulated by SSM.
How to Prepare Reports for Submission
Accurate preparation of reports is crucial to successful submission:

Why MBRS 2.0 Matters for Malaysian Businesses

MBRS 2.0 is a significant advancement in simplifying compliance and streamlining reporting processes for Malaysian businesses. This new system is now mandatory, and all eligible companies are required to use it for submitting essential documents such as annual returns and financial statements. With its improved design, real-time processing, and secure online submission, MBRS 2.0 reduces administrative burdens while ensuring faster and more efficient reporting.

By adopting MBRS 2.0, businesses in Malaysia can improve the accuracy and timeliness of their submissions, making it easier to meet legal obligations and maintain compliance with regulatory standards.

Get Help with Your Reporting Needs

Ensure your reports are accurate and compliant with the help of BoardRoom’s experienced accounting team in Malaysia. Our certified accountants can help you manage your reporting requirements with confidence. Contact us today to find out how our services can support your business’s growth while maintaining compliance.

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E-Invoicing For Tax and Accounting Excellence

E-Invoicing For Tax and Accounting Excellence

E-Invoicing For Tax and Accounting Excellence

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E-invoicing has emerged as a vital platform for companies to streamline financial operations and comply with regulatory requirements. With the Malaysian government rolling out mandatory e-invoicing, businesses must act now to integrate robust e-invoicing solutions into their tax and accounting frameworks to ensure compliance.

E-invoicing is not just a regulatory compliance measure; it is a strategic tool enabler. E-invoicing enhances transparency and compliance by accurately matching income and expenses throughout the supply chain, identifying and reducing discrepancies in reported figures, and facilitating accurate tax reporting.

This article explores how e-invoicing supports tax compliance, drives accounting efficiencies, and serves as a key enabler for strategic financial management.

E-Invoicing Enhances Tax Compliance and Drives Digital Accounting Transformation

E-invoicing is certainly transforming how businesses approach tax compliance, pushing them towards digitalising their accounting operations. This shift involves reviewing existing accounting processes and solutions to ensure they meet the requirements of the e-invoicing framework.

According to Eunice Hooi, Managing Director Asia, Tax and Accounting, BoardRoom Group, one key advantage of the automation of e-invoicing process is that “it ensures that data flows seamlessly from accounting systems to the e-invoicing platform for tax reporting purpose, reducing the need for manual data entry and minimising errors”. This enhancement ensures a higher degree of accuracy in tax reporting.

Additionally, the introduction of e-invoicing requires companies to digitalise all invoice-related processes, which significantly improves financial forecasting and cash flow management. By automating and digitalising invoicing and payments, businesses can optimise their cash flow and improve financial predictability, enabling them to plan with more confidence and accuracy.

Eunice further elaborates: “As more businesses adopt e-invoicing, they gain valuable visibility into their accounts receivable; this visibility allows the businesses to track outstanding invoices and payment schedules more effectively.” she says. “At the same time, businesses can rely on accurate and timely invoicing data for more precise financial forecasting and budgeting.”

With e-invoicing, businesses not only meet compliance obligations but also strengthen their digital infrastructure for better control and efficiency.

Automating Intercompany Transactions For Compliance

E-invoicing plays a crucial role in managing related party transactions and transfer pricing, which are essential for maintaining tax compliance.

“It’s crucial for companies dealing with related entities to generate invoices that comply with local regulations,” Eunice explains. “Transfer pricing documentation must align with the specific regional requirements, which can vary greatly across jurisdictions This ensures that companies can provide the necessary documentation in case of tax audits, avoiding potential penalties or adjustments.”

The adoption of e-invoicing can also streamline self-billed invoicing and facilitate the management of transfer pricing agreements. Centrally recording and standardising data helps companies minimise discrepancies, improve compliance and optimise overall financial processes.

Automating Intercompany Transactions For Compliance

Streamlining Accounting Practices With E-Invoicing

From an accounting perspective, e-invoicing brings significant improvements, particularly in faster processing times and reduced manual data entry. Automation allows accounting personnel to focus less on repetitive administrative tasks and more on activities that add strategic value. However, automation does not entirely eliminate the need for human oversight.

Yang Shuzhen, Director of Regional Accounting Services at BoardRoom Group, explains more. “The automated e-invoicing process cuts down human errors because the information will flow from your accounting system to the API for submission. But you will still need an accountant or skilled personnel overseeing the process to ensure accuracy, handle any exceptions, and troubleshoot issues that the system might not detect.”

Shuzhen emphasises that e-invoicing plays a crucial role in improving the accuracy of financial reporting. “Because there’s actually more regular submission of invoices, it means people are more wary as to what transactions are going through,” Shuzhen says.

Take the case of a seafood trading company that needs to deal with damaged/returned items on a daily basis. The supplier may issue an invoice for 100 crabs, and upon delivery, eight crabs may be rejected by the buyer due to quality issues. Typically, the supplier would consider replacing the “damaged/returned” items in the next order without issuing a credit note or refund. With the implementation of e-invoicing, this would be a challenge as every returned item would have to be accounted for, and the supplier would have to issue an e-invoice in the form of a credit note/refund for every order with such a discrepancy.

“The additional credit notes increased workload and prompted the company to rethink its processes for greater accuracy,” says Shuzhen. Implementing e-invoicing introduced validation steps that encouraged issuing more precise invoices, ultimately reducing errors and improving efficiency.

Preparing Your Team For Successful E-Invoicing

Successful e-invoicing implementation requires a dedicated project leader to oversee the transition and manage all aspects effectively. Shuzhen emphasises the importance of having a project driver to propel the process forward. “There must be a dedicated leader who fully understands the process and takes charge, clearly defining the responsibilities and guiding the finance team through each step of the transition.” This leadership role is crucial for guiding the team through changes, addressing challenges and verifying that the system integration aligns with the company’s needs.

Preparing Your Team For Successful E-Invoicing With A Dedicated Leader

Overcoming E-Invoicing Challenges

Transitioning to e-invoicing can present several obstacles that companies must navigate. These challenges often stem from integrating new systems, gaining the necessary internal support, and ensuring procedures are updated to meet regulatory standards. Here are the common challenges companies face.

System compatibility

Companies often have complex or legacy systems that are difficult to integrate with e-invoicing software. Shuzhen explains, “The more systems you have, the harder it can be to integrate. You have to find a way to simplify it.”


  Solution

Simplify existing systems and ensure IT teams are equipped to handle integration and keep up with regulatory changes.

Managing system updates and changes

Frequent regulatory changes can complicate integration, particularly when multiple systems are involved. “If you choose to do direct integration yourself, you must ensure that your IT team or the project team have the capability to keep track of any changes,” says Shuzhen. “Otherwise, it will be a disaster.”


  Solution

Consider using an external service provider to manage the ongoing changes, allowing you to reduce the burden on internal teams.

Management support

A lack of buy-in from top management can significantly hinder progress. Shuzhen says, “When this happens, the operational level often struggles with the implementation. Getting buy-in from the decision-makers is essential.”


  Solution

Educate management on the necessity of e-invoicing for operational efficiency and compliance to gain their full commitment.

High initial costs

Implementing an API solution can be costly, particularly for companies with complex operations that cannot rely on MyInvois Portal.


  Solution

Explore government incentives, such as grants and tax benefits, to offset initial implementation costs.

Creating or modifying SOPs

Developing or updating standard operating procedures (SOPs) is often required when implementing and transitioning to e-invoicing. Designating clear process owners is also crucial to ensure the correct execution of the new e-invoicing procedures.


  Solution

BoardRoom has vast experience implementing e-invoicing SOPs to guide the development of processes and work with the company’s process owners to maintain accountability.

By understanding these challenges and having a structured approach, businesses can ensure a comprehensive and successful e-invoicing implementation.

The Importance of a Comprehensive Implementation Process

The Importance of a Comprehensive Implementation Process

A successful e-invoicing implementation requires a comprehensive approach, starting with designating clear process owners responsible for managing the transition and ensuring that all mandatory fields – over 50 in total – are completed correctly.

Shuzhen advises, “Ensuring existing enterprise resource planning (ERP) and cloud systems integrate seamlessly with the API invoice software is critical, and businesses may need to upgrade or modify their systems to accommodate this change”. Careful planning, testing, and verification are essential steps to avoid errors and ensure the system functions as intended.

Education and training are also key to successful adoption. Management must understand that e-invoicing is not just about meeting regulatory requirements but also about enhancing the efficiency of financial processes. Investing in training ensures that both leadership and staff are well-prepared for the transition, facilitating smoother implementation and optimising e-invoicing tools.

E-invoicing as a Strategic Asset for Financial Management

E-invoicing is a powerful tool for transforming both tax and accounting functions in Malaysian businesses. It has become a vital tool for managing tax and accounting functions strategically. To fully leverage e-invoicing, businesses must plan carefully, ensuring system compatibility, comprehensive staff training, and securing management support.

Our long-standing expertise in tax and accounting compliance, along with our comprehensive e-invoicing solutions, makes us a trusted partner for businesses seeking tailored e-invoicing solutions that address both accounting and tax needs.

Contact us today to learn more about how we can help your business achieve e-invoicing excellence.

Contact BoardRoom for more information:

Eunice Hooi

Eunice Hooi

Managing Director Asia, Tax & Accounting

E: [email protected]

T: +60-3-7890 4800

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Case Study: Streamlining Cross-border Payroll Solutions for Malaysia’s Manufacturing Sector

Case Study Streamlining Cross-border Payroll Solutions for Malaysia’s Manufacturing Sector

Case Study: Streamlining Cross-border Payroll Solutions for Malaysia’s Manufacturing Sector

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Client Profile

BoardRoom Malaysia’s client is a multinational corporation operating in the Asia-Pacific region, specialising in the development, production, and sale of ingredients for fragrance, flavouring, food, cosmetics, and other functional products. With a diverse portfolio serving over 6,000 customers in 150 countries, the client has established a significant presence in multiple markets, including Singapore, Malaysia, Thailand, Indonesia, Philippines, and Vietnam.

To support its regional growth and enhance operational efficiency, the client required a unified cross-border payroll solution for its workforce in Asia, spread across seven countries. Given the complexities of managing a large-scale, multi-country operation, they sought a single point of contact for their payroll and HR needs, allowing seamless integration across jurisdictions and aligning with their strategic business priorities.

Challenges with Previous Vendor

The client, a prominent leader in the manufacturing sector with operations spanning multiple Southeast Asian countries, faced significant issues with their previous payroll provider.

These challenges hindered efficient payroll processing and HR management, causing operational setbacks:

Error-Prone Payroll System
The former vendor’s payroll system struggled with inaccuracies, often resulting in delayed or incorrect payments. Given the large number of employees across several countries, these errors significantly affected employee satisfaction and complicated payroll reconciliation.
Lack of a Centralised Point of Contact
High turnover among the vendor’s personnel made it difficult for the client to maintain consistent communication. The absence of a dedicated regional engagement manager meant that local payroll regulations were not always understood or adhered to promptly.
Poor Integration with Attendance Systems
In manufacturing, accurate attendance tracking is essential for payroll accuracy. The client’s previous system could not integrate with their existing attendance software, leading to manual data entry, increased chances of errors, and inefficiencies in payroll processing.

These challenges highlighted the client’s need for a reliable payroll partner who could provide a seamless, efficient, and compliant payroll process capable of addressing both their operational complexities and multi-country requirements.
Challenges with Previous Vendor

BoardRoom Malaysia’s 2-Step Payroll Solution Approach

To address the client’s needs, BoardRoom Malaysia adopted a two-step approach, combining payroll expertise with an integrated HRMS platform to deliver comprehensive payroll solutions. This strategy is designed to simplify complex payroll processes and enhance overall efficiency.

Payroll Expertise & Dedicated Engagement Manager

BoardRoom Malaysia leveraged its extensive cross-border payroll expertise, offering a deep understanding of regulations across multiple countries. A dedicated engagement manager was appointed as the single point of contact for all payroll-related matters across the client’s seven locations in Asia. This ensured:

  • Efficient Communication: The client could now navigate payroll processes smoothly, resolving issues quickly through a single point of contact.
  • Informed Compliance: With a regional specialist overseeing payroll, the client was assured of adherence to each country’s specific payroll regulations, reducing compliance risks.

Integrated Cloud-based HRMS Platform – Ignite

Recognising that the client’s payroll and attendance systems required seamless integration, BoardRoom implemented its cloud-based HRMS platform, Ignite. The multi-country payroll system provided:

  • Seamless Attendance Integration: Ignite’s time and attendance module integrated directly with the client’s clocking system, automating data transfer and eliminating manual input. The automation of attendance tracking not only improved accuracy but also sped up payroll processing.
  • Centralised Payroll Access Across Multiple Countries: The client could manage multi-country payroll operations across all their Asian countries from one platform, streamlining their administrative workload and improving overall payroll efficiency.

Through these two key capabilities, BoardRoom Malaysia offered the client a robust and reliable cross-border payroll solution that addressed their immediate needs while also enhancing the client’s ability to manage a multi-country workforce effectively.

Dedicated Engagement Manager

Results and Recommendations

The implementation of BoardRoom’s cross-border payroll solutions led to notable improvements for the client, driving efficiency and supporting smoother HR operations, such as:

Enhanced Accuracy and Timeliness
Automating attendance data integration into payroll significantly reduced errors, ensuring employees received accurate and timely payments.
Streamlined Communication and Quick Issue Resolution
The dedicated Engagement Manager allowed for direct and efficient communication, fostering rapid issue resolution and adherence to country-specific compliance requirements.
Improved Operational Efficiency
A unified multi-country payroll and attendance system enabled the client to achieve a more streamlined payroll process, reducing administrative overhead and enabling HR teams to focus on strategic business priorities.

The client’s successful transition to BoardRoom Malaysia’s payroll system demonstrates the impact that a well-integrated and reliable solution can have on a manufacturing company’s HR processes. With BoardRoom’s support, the client could efficiently navigate the complexities of cross-border payroll across multiple jurisdictions, enhancing overall business operations.

In the context of the Malaysian manufacturing sector, this case reinforces the importance of seamless payroll management to support business growth. For an in-depth look at payroll strategies within the manufacturing industry, BoardRoom’s article on mastering payroll in the manufacturing industry offers further insights into advanced solutions for managing a global workforce. Companies seeking tailored payroll expertise can also explore BoardRoom’s payroll services in Malaysia.

About BoardRoom

BoardRoom Malaysia’s commitment to providing customised payroll solutions has become a driving force for its clients, where the company’s services offer seamless integration with existing systems, greater accuracy, and comprehensive HR operational support. With their ability to understand industry-specific needs and deliver solutions that enhance business efficiency, BoardRoom continues to be a trusted partner for payroll outsourcing services and the leading provider of multi-country HRMS solutions in Malaysia.

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How a Share Registry Portal can Transform Shareholder Management and Engagement

How a Share Registry Portal can Transform Shareholder Management and Engagement

How a Share Registry Portal can Transform Shareholder Management and Engagement

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In Malaysia, the share registry landscape is undergoing a significant transformation as technology reshapes traditional processes. One of the key innovations driving this change is the share registry portal, an advanced online tool that streamlines shareholder services and regulatory compliance.

These portals not only enhance operational efficiency but also play a critical role in improving shareholder engagement. By integrating technology into share registry services, Malaysian companies can reduce administrative burdens and ensure transparency and compliance with local regulations, making share registry portals essential to their success.

The Evolving Landscape of Shareholder Services in Malaysia

The share registry market in Malaysia is evolving rapidly, driven by an increasing number of IPO listings and demand for advanced technological integration to meet the changing needs of modern investors. Key innovations like share registry portals, shareholder management systems and online meeting services are reshaping the industry.

Alex Chew, Director of Share Registrar Services Asia at BoardRoom Malaysia says the COVID-19 pandemic pushed many traditionally brick-and-mortar businesses to adopt digital solutions to remain competitive.

“To stay ahead, you’ve got to embrace technology to drive the business,” he says, emphasising that the shift from conventional paper-based services to online mediums is now essential. “Realistically, a fully digital adoption may take time but the journey to engage and adopt technology solutions is unavoidable to remain relevant,” he added.

As the number of share registry providers increases, the focus on regulatory compliance and operational efficiency becomes paramount. Richard Lee, Director of Client Management, Share Registrar Services Asia at BoardRoom Malaysia, stresses the importance of up-to-date shareholder solutions in navigating the ever-changing regulatory landscape. Technology can help by providing a clear audit trail, improving communication and ensuring accurate record-keeping.

“Share registry solutions are crucial in supporting operational and compliance efficiency,” Richard says.

The move towards paperless transactions is a testament to this evolution. It simplifies processes like the Dividend Reinvestment Plan (DRP), which can now be submitted electronically rather than through cumbersome paper forms.

From a corporate governance perspective, implementing a standard operating procedure (SOP) is vital for ensuring compliance and protecting shareholder interests, Alex explains.

“If you have a policy on SOP in place, whether in manual or digital mode, you are able to comply from the get-go because everything is in electronic mode,” Alex says. This shift not only aids in maintaining accurate records and transparent communication but also aligns with the stringent regulations set forth by the Securities Commission Malaysia (SC) and Bursa Malaysia, reinforcing the need for efficient and compliant shareholder management software in the industry.

Enhancing Efficiency and Shareholder Engagement Through Technology

The integration of technology significantly enhances shareholder engagement and operational efficiency. Tech-enabled share registry portals, such as the BoardRoom Smart Investor Portal (BSIP), provide 24/7 access to vital services, allowing investors to engage with their share registrars anytime, anywhere.

As Alex says, “Online mediums like our online portal have become a crucial and essential channel for the public or an investor to reach our share registrar services electronically.

“The best thing about going online is it’s available around the clock. It’s a service that is available 24/7 versus the typical over-the-counter service, which is only available on a weekday during business hours.”

This shift away from traditional manual services has streamlined processes, eliminating the need for in-person visits to submit forms or request hard copies. BoardRoom’s online platform allows shareholders to engage more efficiently with the share registry, providing instant notifications and system mailers regarding important updates. This digital approach improves user experience and aligns with modern shareholders’ expectations for seamless technology in their interactions.

Moreover, shareholder management software enhances flexibility and convenience for users. Shareholders can now manage their investments smoothly across multiple devices, ensuring they remain informed and engaged.

As the share registry market in Malaysia continues to evolve, the increasing adoption of technology is set to play a critical role in shaping the future of shareholder services. With the potential for artificial intelligence to enhance these systems further, companies that embrace these advancements will likely enjoy improved shareholder satisfaction and loyalty, solidifying their position in a competitive landscape.

Enhancing Efficiency and Shareholder Engagement Through Technology

Shareholder Platform Solutions

BoardRoom Smart Investor Portal (BSIP) offers a significant competitive advantage. Its advanced features and functionality increase shareholder engagement and ensure seamless execution of corporate actions.

Key features of BoardRoom Smart Investor Portal (BSIP)

E-submission services

  • e-Proxy service: allows shareholders to submit proxy forms online, eliminating the process of manual submissions.
  • e-DRP (dividend reinvestment plan): enables seamless participation in dividend reinvestment programs.
  • e-GO (general offer): facilitates online submissions of Acceptance Forms.
  • e-MITI: facilitates online subscription for MITI (Ministry of International Trade and Industry) investors especially during IPO exercise.
  • e-PINK: facilitates online submission of PINK FORMS during IPO exercises.

Online request services

  • e-Forms and AR (annual reports) Requisition: Shareholders can download various e-forms and request for hard copies of annual reports or circulars through the platform.

Online attendance registration

  • RPEV (remote participation and electronic voting): Provides online registration for virtual and hybrid meetings, allowing shareholders to attend and vote remotely.

BoardRoom’s shareholder platform solutions not only meet but exceed current market demands, positioning BoardRoom as a leader in the industry. Its solutions are scalable, giving the ability to meet future demands. Not only do BoardRoom’s online solutions offer shareholders new ways to engage, but they are also cost-effective and paperless, reducing the user’s carbon footprint. Continuous effort to bring more services online is in progress.

Dedicated Helpdesk

BoardRoom’s emphasis on delivering high-quality service is reinforced by its dedicated helpdesk, ensuring shareholders receive immediate assistance and support. Staffed by knowledgeable professionals, the helpdesk addresses a wide range of inquiries – from technical issues to questions about corporate actions – accessible via phone, email, and BSIP portal. This commitment to support empowers shareholders to engage more fully with the BoardRoom Smart Investor Portal (BSIP), enhancing the overall shareholder experience.

How BoardRoom’s Shareholder Management Software Provides a Competitive Edge

How BoardRoom’s Shareholder Management Software Provides a Competitive Edge

BoardRoom’s state-of-the-art shareholder management software exemplifies how tech-enabled solutions can transform share registry services. Focusing on enhancing efficiency and reducing costs, these advanced tools position BoardRoom as a market leader.

Recently, some of Boardroom’s clients BoardRoom client reported saving up to 30-40% on mailing costs by using BoardRoom’s electronic communications.

Traditionally, shareholders received dividends by cheque with a copy of the tax voucher, but with the implementation of e-payment more than 15 years ago, a good majority shareholders now received dividend paid by electronic crediting to their bank account directly. Most of the tax vouchers are still being sent separately via postal mail. Now, with the introduction of BoardRoom’s e-Notice system, the tax vouchers are delivered electronically. This streamlined approach accelerates communication, reduces reliance on paper usage, supports sustainability initiatives, and lowers costs.

The Future of Shareholder Services Lies in Technology-driven Efficiency

By embracing cutting-edge technology, such as share registry portals and shareholder management software, BoardRoom empowers businesses to streamline their operations and improve overall shareholder satisfaction.

BoardRoom’s solutions facilitate effective communication, providing shareholders with easy access to essential services. A dedicated help desk reinforces BoardRoom’s commitment to exceptional service and means clients receive prompt assistance.

Explore BoardRoom’s advanced share registry services and discover how they can transform your shareholder experience, making it more efficient and engaging. With BoardRoom, you can trust that you are partnering with an industry leader dedicated to leveraging technology to benefit both businesses and their shareholders. Contact BoardRoom today.

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MY Budget 2025 : Key Tax Measures You Need to Know

MY Budget 2025 Banner

MY Budget 2025 : Key Tax Measures You Need to Know

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Malaysia’s Budget 2025 aims to reinvigorate the economy through various tax reforms and tax measures impacting both businesses and individuals.

Unveiled by Prime Minister Datuk Seri Anwar Ibrahim on 18 October 2024, Malaysia Budget 2025 represents a crucial turning point for the nation’s economy with a record allocation of RM421 billion.

The theme, ‘Membugar Ekonomi, Menjana Perubahan, Mensejahtera Rakyat’ (Reinvigorating the Economy, Driving Reforms, and Prospering the People), reflects a dual focus in addressing immediate socio-economic challenges and building long-term resilience.

This budget balances economic growth, fiscal prudence and social welfare. It aims to revitalise the economy through key tax reforms and tax measures, addressing post-pandemic recovery, technological advancements, and climate change while improving the welfare of the Rakyat.

Our exclusive Malaysia Budget 2025 Commentary delves into the intricacies of these tax measures, providing valuable insights that will impact both the business and individual landscapes.

✓ Business Tax Reforms and Incentives for Corporate Taxpayers and Businesses

  • Implementation of Global Minimum Tax (GMT)and Accelerated Capital Allowance (ACA) for e-invoicing
  • Introduction of targeted incentives such as Investment Tax Allowance (ITA) for Smart Logistics Complexes (SLCs) and enhanced export incentives for Integrated Circuit (IC) Design Services

✓ Revenue and Fiscal Responsibility for Consumers and Businesses

  • Broadening the Sales and Services Tax (SST) framework and rationalising subsidies

✓ Tax Measures and Reliefs for Individual Taxpayers

  • Balancing the Introduction of new 2% Dividend Tax with extension of tax exemption on Foreign-Sourced Income (FSI)
  • Introduction of targeted tax reliefs for certain individual taxpayers

✓ ESG-Driven Initiatives

  • Introduction of a carbon tax and incentives for carbon capture, utilization and storage (CCUS) projects

As we navigate these changes line with the national aspiration, businesses and individuals must reassess their tax strategies to stay compliant and competitive.

Download our exclusive commentary now to navigate these changes with confidence. If you have any questions, please email our regional tax team at [email protected].

DOWNLOAD MALAYSIA BUDGET 2025 COMMENTARY

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How the Accounts Payable Process Works: A Comprehensive Guide

How the Accounts Payable Process Works A Comprehensive Guide

How the Accounts Payable Process Works: A Comprehensive Guide

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The accounts payable process is a critical aspect of every business. It ensures invoices are paid on time to maintain healthy cash flow management for corporate financial stability, improve operational efficiency, and foster strong relationships with vendors and suppliers while complying with relevant regulations.

In this guide, we’ll explore the definition and role of accounts payable in Malaysia, its process, and why it is important to consider outsourcing it to an accounting firm.

What Is Accounts Payable? What Is Its Role in Accounting?

Accounts payable refers to the management of short-term obligations that a business owes to its suppliers or vendors for goods or services received on credit. In simpler terms, this is a record of all invoices that have been issued but not yet paid. It is a common practice for companies in Malaysia to have a dedicated department responsible for managing such obligations or outsource to an accounting services provider.

The accounts payable process encompasses several critical functions in the accounting process and plays an important role in business operations. It involves receiving, verifying, and making payment for invoices accurately and on time, ensuring the payments adhere to the company’s policies. This prevents potential late fees, maintains strong vendor relationship, and helps avoid financial disruptions for the company. Strategic timing of payments for invoices also enables businesses to retain cash longer and improve liquidity, contributing to their overall financial stability.

How Does the Accounts Payable Process Generally Work?

Generally, when the accounts payable process is handled in-house in Malaysia, several key steps must be taken:

  • Purchase Order (PO): A purchase order is submitted by a particular department of the company to procure the services or goods from the vendor.
  • Receiving the Goods or Services: Upon receiving the goods or services from the vendor, the company verifies whether they match the PO. If accurate, a goods received note (GRN) will be sent to the vendor.
  • Invoice Receipt: The vendor submits the invoice, which details the amount owed and due date, to the accounts payable department of the company.
  • Three-way matching: The accounts payable department compares the invoice against the PO and GRN to verify that there’s no discrepancy between these three documents, particularly in terms of the items or services received, quantities, and prices.
  • Approval Process: Upon verification, the invoice is sent for approval to initiate the payment process. The payment method can be an electronic transfer, check, or other means.
  • Record keeping: After the payment is finalised and processed, the data and details are input into the accounting system for tracking.
  • Accounts Payable Reconciliation: The accounts payable department regularly reviews and examines any outstanding invoices and payment records against the statements from vendors and suppliers to ensure the overall accuracy of the balance.
Accounts Payable Approval Process

How Does the Accounts Payable Process Work When Outsourced to an Accounting Firm?

Many companies outsource the accounts payable process to accounting firms in Malaysia. These service providers often consist of a team of experts with specialised resources and technologies to streamline the entire process for improved efficiency and ensure the practice is in compliance with relevant Malaysian regulations. Businesses can focus on their core operations without allocating extra costs to manage an in-house team, making outsourcing an ideal and cost-effective strategic choice.

Unlike how a company’s in-house team typically manages the accounts payable process, outsourced accounting firms or service providers operate differently with the following steps.

Initial Setup and Integration

Outsourced accounting firms generally start by conducting an initial assessment to learn about the needs of the company, such as the systems and processes required to handle the accounts payable functions. A new software may be implemented or integrated with existing systems to enable a streamlined accounts payable process.

Receipt, Processing, Matching, and Validation of Invoices

Handing the whole process from receipt, processing and matching to validating the invoices, the outsourced accounting firm typically utilises software throughout this step. Professional accounting firms like BoardRoom ultilises Optical Character Recognition (OCR) technology, where physical or digital invoice documents are scanned and converted into machine-readable data, automating the extraction of details like invoice numbers, amounts, dates, and vendor information. This significantly reduces manual data entry errors and speeds up the three-way matching process, improving efficiency and accuracy.

Workflow Management and Payment Approval

If no discrepancy is found or fraud risk is detected, the accounting firm route the invoice to the designated approvers based on predetermined thresholds and notify them for approval. Once approved, the accounting firm will start issuing payment vouchers, preparing cheques or initiating online payment to process the payment, ensuring timely remittance to the supplier.

Payment Documentation, Reporting, and Reconciliation

The accounting firm will document all payments made and record them in the client’s accounting system, which enables them to generate detailed reports and reconcile payments with bank statements. This is essential for maintaining accurate corporate financial records and supporting audits.

Consideration When Switching to Outsourced Accounting Provider

Consideration When Switching to Outsourced Accounting Provider

While an accounting firm can offer expertise and resources to ensure a smoother operation, businesses need to consider several crucial factors before outsourcing their accounts payable process to them:

  • Ongoing Evaluation and Optimisation: The accounting firm should be able to continuously evaluate and optimise the accounts payable process to improve efficiency and reduce costs.
  • Technology and Software: The firm should have access to advanced technology and software solutions that can streamline the accounts payable process and the approval workflow.
  • Accuracy and Compliance: The firm should have a strong track record of accuracy and compliance with relevant regulations.
  • Scalability: The firm should be able to scale its services to meet the changing needs of the business.
  • Security: The firm should have robust security measures in place to protect sensitive financial information.
  • Track Record: The firm should have a proven track record of success in providing accounts payable services.

Why Choose BoardRoom for Your Accounts Payable Needs?

As the leading provider of outsourced accounting services in Malaysia,BoardRoom can help you streamline your accounts payable process, improve efficiency, and reduce costs. Our experienced team of professional chartered accountants combines expertise with advanced technology to handle your accounts payable needs effectively. By partnering with BoardRoom, you can focus on your core business while we take care of your accounts payable. Contact us today for an assessment, and let us guide you through every step with our tailored solution.

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Mastering Payroll in Manufacturing Industry: Advanced Solutions for a Global Workforce

Mastering Payroll in Manufacturing Industry Advanced Solutions for a Global Workforce

Mastering Payroll in Manufacturing Industry: Advanced Solutions for a Global Workforce

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Navigating the complexities of payroll management in the manufacturing sector presents unique challenges distinct from those in other industries. Diverse roles and large operational scales require an advanced payroll system to comply with varied labour laws, protecting a predominantly blue-collar workforce and addressing multi-country statutory requirements.

In the manufacturing industry, employees tend to work complex shift schedules to meet operational demands. Adjustments to human resources in response to fluctuating business demands and supply chain issues further complicate payroll processing.

Outsourcing payroll to specialists ensures greater accuracy, compliance and efficiency. It allows manufacturing companies to focus on core production activities rather than administration, mitigating the risk of errors and leveraging advanced systems capable of seamlessly handling global payroll requirements.

As the industry evolves amid increasing regulatory and operational demands, sophisticated payroll solutions for the manufacturing industry has become increasingly critical in enhancing business efficiency and compliance.

Adapting Payroll Systems in Manufacturing Sector for Global Compliance and Worker Protection

A payroll system for the manufacturing industry can be more challenging than in other industries due to several factors. Companies in this sector employ a large number of blue-collar workers, and stringent employment laws are in place to protect them. For this reason, it’s necessary to have a payroll system that can navigate the complex terrain of regulations designed to protect workers, who may be vulnerable to exploitation.

The precision required in processing payroll in the manufacturing industry ensures that employees are compensated fairly and accurately, reflecting the actual hours worked and any overtime, which can be significant.

In addition, manufacturing operations often span multiple countries, each with its own set of labour laws and regulations. A multi-country payroll system is essential to ensure compliance and efficiency across all locations.

Ken Wong, Managing Director Asia, Payroll at BoardRoom Group emphasises the importance of having a payroll system that complies with local laws.

“Having a payroll system that complies with the local statutory requirements is critical,” he says.

The payroll system must account for various shift operations, overtime calculations and local holidays. Additionally, manufacturing plants often operate 24 hours a day, 7 days a week, requiring a flexible approach to employee scheduling and payroll management.

“In the manufacturing industry, you have very complex shift patterns,” Ken says. “There are people who work on Saturdays and Sundays, and then people who work shift hours that are different from what a regular employee who works in a technology company or an office environment would experience. You need to roster these employees into different time slots, and it’s not always easy because, depending on the demands of your business, you may have to increase the number of employees in each shift so that you get more productivity out of it.

“Another factor to consider is the high attrition rate in manufacturing. In a month, multiple employees may resign. Most manufacturing companies employ a large percentage of foreigners, and when they leave the business or leave the country, your tax computation is also more complex because you need to compute the withholding tax before the foreigners can leave the country.”

Integrating the payroll into one platform improves operational efficiency and reduces data duplication. By centralising payroll operations, manufacturing companies can better manage their workforce, ensure accurate payment for all employees and significantly reduce the administrative burden associated with multi-regional compliance and payroll processing.

Essentials of a Multi-country Payroll System for Manufacturing Businesses

Essentials of a Multi-country Payroll System for Manufacturing Businesses

In the complex global manufacturing landscape, the payroll system must be linked with existing HR systems to ensure seamless employee data management.

Ken highlights the importance of data accuracy, especially for manufacturing employees whose earnings may fluctuate with the demands of the business.

“For manufacturing employees, their wage fluctuates according to the demand and supply of the business. So every single dollar counts for them, and being able to process the data accurately and on time ensures that what they have worked and the hours they have put in are being paid correctly.”

Real-time data processing is important in a payroll system tailored for the manufacturing sector as it ensures that adjustments, such as overtime and shift changes, are updated instantly, thus preventing delays and errors. It also enables managers to assess employee output and productivity and adjust rosters to ensure production targets are met.

Integrating the payroll and HR systems is also important when it comes to leave.

“When someone is supposed to be rostered to work today and does not show up, the time system will flag this as someone missing from work,” Ken explains. “The payroll system then goes to your leave system to check whether this person is on leave and if it’s medical leave or annual leave. Therefore, this person does not have their pay deducted and is excused for not being at work. So the time and attendance system keeps the whole process humming.”

Why Integrated HR and Payroll Software is Beneficial

Integrating the HR and payroll systems ensures that employee information stored by the HR system from onboarding can be automatically transferred to the payroll system once the employee starts work.

The importance of having an HR system fully integrated with the payroll system is even more critical for large manufacturing companies that maintain physical operations across multiple countries.

“With many of these companies, what I’ve noticed is that they want to make sure all data comes from one source so there’s a source of proof. They want to deal with integrated data, which means no manual entry of information, and it interfaces with our platform. BoardRoom’s all-inone cloud-based HRMS solution, Ignite, allows us to manage payroll for most countries in Asia,” Ken says.

These integrated systems significantly reduce errors and provide essential reporting features that assist in strategic financial management and compliance audits. The payroll system’s ability to scale and adapt flexibly to the changing needs of a global workforce is not merely a convenience but a necessity.

Integrated HR and Payroll Software is Beneficial

Benefits of Outsourcing Payroll in Manufacturing Industry

Manufacturing companies benefit from the expertise of an outsourcing partner like BoardRoom in managing payroll effectively. The advantages of outsourcing payroll include:

  • cost-efficiency
  • compliance expertise
  • enhanced security
  • freeing up resources to concentrate on core operations

BoardRoom is the ideal outsourcing partner because of its extensive experience in handling large headcounts and complex scenarios.

Ken explains, “Outsourcing isn’t just about handling payroll; it’s about leveraging expertise to effectively accommodate the peaks and troughs of business demands.”

Benefits of Outsourcing Payroll in Manufacturing Industry

Transitioning to an Outsourced Payroll Solution in Eight Steps

Opting for an outsourcing partner like BoardRoom not only simplifies payroll management but enhances overall business efficiency by enabling manufacturers to focus more on their primary business goals.

Here’s how BoardRoom can transition your manufacturing company to an outsourced payroll solution:

Initial consultation and scoping

We’ll engage stakeholders in meetings and collect data to create a detailed needs assessment, which will allow us to tailor our payroll service precisely to the manufacturing site’s requirements.

Solution proposal

Craft a custom proposal based on the initial scoping phase, ensuring the solution addresses all specific operational complexities.

System configuration and customisation

The system is adapted to align seamlessly with existing operational processes and meet any unique payroll and compliance requirements.

User acceptance testing (UAT)

The system is rigorously tested to ensure all functionalities meet your specifications, including comprehensive scenario testing.

Parallel run

This critical phase involves running the new system alongside the current one to identify and rectify any discrepancies or errors and ensure accuracy.

Employee training

We’ll ensure all relevant staff are well-trained in using the new system.

Go live

The system officially becomes operational after successful testing and training.

Post-implementation support

Continuous support and feedback mechanisms are established to ensure the system evolves with the company’s needs and any issues are swiftly addressed.

Drive Success with Advanced Payroll Solutions

The complexity of managing payroll in the manufacturing sector requires sophisticated systems. BoardRoom specialises in offering comprehensive outsourcing services that simplify payroll processes, ensure compliance and enhance operational efficiency.

BoardRoom’s deep understanding of the specific challenges in processing payroll for the manufacturing industry means we are adept at handling everything from employee onboarding to multi-country compliance with precision. Best of all, our tailored solutions are designed to meet the distinct needs of each and every client.

For manufacturing companies aiming to enhance their operational efficiency, partnering with BoardRoom offers a clear advantage. Visit BoardRoom payroll services to discover more about how our expert solutions can simplify your payroll needs. Take the first step towards a seamless, efficient payroll solution today.

Contact BoardRoom for more information:

Ken Wong

Ken Wong

Managing Director for Payroll for Asia

E: [email protected]

T: +60 3 7890 4800

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Guide to Filing Annual Returns in Malaysia

Guide to Filing Annual Returns in Malaysia

Guide to Filing Annual Returns in Malaysia

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Ensuring your company operates compliantly in Malaysia involves filing annual returns. This legal requirement keeps the Companies Commission of Malaysia (SSM) informed about your company’s current status. This guide simplifies the process for you, providing a step-by-step approach to filing your annual return electronically. This will help you fulfil this important obligation efficiently and maintain the integrity of your business standing in Malaysia.

What Is an Annual Return (AR)?

An Annual Return (AR) is a mandatory document that must be filed with the Companies Commission of Malaysia (SSM) yearly by registered companies in Malaysia. This comprehensive report provides a snapshot of your company’s essential details, ensuring transparency and keeping the authorities informed.

Why Is Filing Annual Returns Important?

Filing annual returns is important for several reasons. First and foremost, it guarantees your business operates compliantly. The SSM utilises these reports to verify your company’s legitimacy and adherence to regulations. Additionally, annual returns promote transparency. By submitting accurate information, you demonstrate responsible business practices, potentially fostering trust with investors, clients, and partners. Finally, timely filing helps you avoid potential penalties imposed by the SSM for late submissions.

Filing Annual Returns

Who Needs to File an Annual Return?

All registered companies in Malaysia are required to file an annual return. This includes limited liability companies (LLCs), private companies limited by shares, companies limited by guarantee, and foreign companies registered to operate in Malaysia.

What Information is Required in an Annual Return?

Your annual return filing in Malaysia should include the following key details:

  • Company Details: This section captures your company’s name, registration number, and registered office address.
  • Business Activities: Briefly describe the core business activities your company undertakes.
  • Director(s) Information: Provide the full names, identification numbers (IC/Passport), and residential addresses of all company directors.
  • Company Secretary Information (if applicable): If your company has a designated company secretary, include their name, IC number, and residential address.
  • Members’ Information (shareholding details): List all company members (shareholders) and their corresponding shareholding details.

How to File an Annual Return?

The company secretary should file, sign, and submit the annual return electronically through the Malaysian Business Reporting System (MBRS) in Malaysia, as this user-friendly system streamlines the process. To ensure accurate filing of annual returns, you should follow the below steps.

Preparation with MBRS Preparation Tool (mTool)
To start with the filing, you should first utilise the MBRS Preparation Tool (mTool) to prepare your annual return. This tool simplifies data entry and ensures consistency. You can download it from the MBRS Portal if needed.

Once you have downloaded the mTool, use it to enter company details, director information, shareholding details, and other relevant information. Then, import your prepared financial statements, if applicable, into mTool for verification.
Submission through MBRS Portal
Once everything is prepared with mTool, you can begin your annual return submission through the MBRS Portal with the following steps:

  1. Log in to SSM4U and access the MBRS Portal.
  2. Create a new annual return submission.
  3. If you use mTool, upload the generated XBRL file directly into the portal. Alternatively, you can manually enter the data into the online form.
  4. Carefully review all information for accuracy before submission.
  5. Submit the annual return electronically and proceed to pay the filing fees online.
  6. Upon successful submission, you will receive a confirmation email with a reference number for your records.

Deadlines and Due Dates of Annual Returns

Companies are required to file your annual return within 30 days of your company’s anniversary date, which is the date your company was incorporated. In the case of a foreign company, the annual return due date will be on the company’s registered date. This deadline is independent of your financial year-end.

It’s also crucial to double-check the deadlines and due dates with the SSM website for any change in regulations.

Deadlines and Due Dates of Annual Returns

Penalties for Late Filing

Late filing of annual returns can result in fines imposed by the SSM. The severity of the penalties depends on the duration of the delay and whether the company is a private or public company.  These penalties must be paid during the delayed submissions of the documents to SSM.

Furthermore, neglecting to file can lead to additional legal consequences, such as the SSM striking the company off the register. This can significantly impact your business operations, making it difficult to open bank accounts, enter into contracts, or maintain good legal standing.

How can BoardRoom help with your Annual Returns Filing?

Filing annual returns is a necessary step for maintaining a compliant and transparent company in Malaysia. By understanding the process and adhering to the deadlines, you can ensure your business operates smoothly and avoids any potential complications.

BoardRoom offers professional assistance with filing your annual returns. Our dedicated team of corporate secretarial specialists can guide you through the entire process, from preparing your documents in XBRL format to filing your annual returns accurately and on time. This allows you to focus your valuable time and resources on running your core business activities with peace of mind.

Contact us today and let us guide you every step of the way with our tailored services and advice.

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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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