Discover the differences between disbursements and reimbursements in Malaysia's e-invoicing system with clear examples and management steps.
When dealing with Malaysia's e-invoicing system, it's crucial to understand the difference between disbursements and reimbursements. This distinction affects how expenses are recorded and managed between suppliers and buyers. Let's break down these concepts and see how they are applied through practical examples.
Reimbursements refer to out-of-pocket expenses that the payee incurs while rendering services or selling goods to the payer (the buyer). These expenses are later reimbursed by the payer. Common examples include costs for airfare, travel, accommodation, telephone, and photocopying charges.
Disbursements, on the other hand, are expenses that the payer (the buyer) incurs but are paid to a third party by the payee. These are typically associated with services rendered or goods sold by the payee to the payer.
In Malaysia, suppliers generally include both reimbursements and disbursements in their invoices to buyers. However, this process is streamlined to ensure clarity and compliance with e-invoicing guidelines.
To simplify our discussion:
In this scenario, Supplier 1 issues an e-invoice directly to the buyer for goods sold or services rendered. Supplier 2, acting on an agreement with the buyer, makes a payment to Supplier 1 to settle this invoice.
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Perniagaan Adibah hired an event planner for a product launch on October 9, 2024. On October 1, 2024, the event planner sourced flowers from a florist, who issued an e-invoice directly to Perniagaan Adibah. The event planner then paid RM4,000 to the florist on behalf of Perniagaan Adibah on October 8, 2024, and issued an e-invoice for their services, excluding the florist's payment.
Here, Supplier 1 issues an e-invoice to Supplier 2 for goods or services intended for the buyer. Supplier 2 then issues a separate e-invoice to the buyer, detailing the services and any disbursements or reimbursements.
An event planner rented a banquet hall for Perniagaan Adibah's event, incurring RM30,000. The hotel issued an e-invoice to the event planner. The event planner then issued an e-invoice to Perniagaan Adibah, including separate line items for the service fee and the banquet hall rental.
DEF Company Sdn Bhd, a subsidiary of ABC Company Sdn Bhd, received recruitment services from HR Hiring Sdn Bhd amounting to RM10,000 on September 1, 2024. HR Hiring issued an e-invoice to DEF. ABC paid HR Hiring on behalf of DEF, recording the amount owing from DEF in its books. DEF repaid ABC on December 31, 2024. No additional e-invoice was required between HR Hiring and ABC or between ABC and DEF.
In any event where ABC charges an intercompany fee to DEF for the payment made, an e-invoice is required by ABC to DEF for proof of income (for ABC) and proof of expense (for DEF).
Understanding the differences between disbursements and reimbursements, and how they are processed in Malaysia's e-invoicing system, is essential for compliance and clarity in financial transactions. By following the outlined steps and scenarios, businesses can ensure accurate and efficient e-invoicing practices
