Hotel Bookings by Staff: Is an E-invoice Required for Reimbursement Claims?

In my previous blog, I shared about Malaysia E-Invoicing: What Hoteliers Need to Know about this significant update.  With the introduction of this system in August 2024, businesses, including hotels, must now issue and manage invoices electronically in three different phases. But how does this shift affect internal operations, especially regarding staff handling hotel bookings and seeking reimbursements? Let’s dive into how these changes might impact reimbursement processes and what HR departments must consider to ensure a smooth transition.

Understanding the Impact of E-Invoicing on Staff Reimbursements

The e-invoice system aims to enhance accuracy and streamline business transactions by requiring electronic invoices for business-to-business interactions. While this change primarily affects external transactions, it is essential to consider how it impacts internal reimbursement processes, especially for staff who book hotels for business purposes using personal funds.

To better understand the impact of the e-invoicing system on staff reimbursements, let’s look at the two common scenarios: when staff use personal funds for hotel bookings and when the company directly covers these expenses. 

Scenario 1. Staff Using Personal Funds for Hotel Bookings 

A common question that arises is whether staff members need to provide an e-invoice when claiming reimbursement for expenses paid with personal money. The answer is, no. E-invoices are generally used for transactions between businesses and customers, not for internal reimbursement claims. However, employees should provide the original receipt or invoice that documents the expense.

Here are some HR Policy Update recommendations: 

1. Communicate that employees must submit these original documents when claiming reimbursements. While e-invoices are not necessary for these internal claims, any additional requirements or updates to the reimbursement process should be clearly outlined. For example, the HR policy could state: "Employees seeking reimbursement for hotel bookings paid with personal funds must submit the original hotel receipt or invoice. E-invoices are not required for internal claims unless specified by company policy."
   
   
2. Highlight special cases like high-value bookings or transactions with specific vendors, there might be additional requirements. For example, stated that "For high-value hotel bookings or transactions with specific vendors, an e-invoice may be required. Employees will be notified if an e-invoice is necessary and will be provided with detailed instructions." 

This approach ensures that employees have a clear understanding of the documentation needed for reimbursement, helping to streamline the process and maintain compliance with current e-invoicing practices.

Scenario 2. Company Directly Paying for Staff Hotel Bookings

When the company directly pays for hotel bookings, this is where the e-invoice system plays a more direct role. In these cases, the hotel issues an e-invoice to the company, which must be processed electronically. This ensures compliance with regulatory requirements and streamlines the invoicing process.

To align with the e-invoice system, HR policies should be updated to address the following: 

1. Ensure that all invoices received from hotels or vendors are processed as e-invoices. This aligns with regulatory requirements and helps maintain consistency. For example, update the policy to state: "When the company directly pays for hotel bookings, ensure that all invoices are processed as e-invoices in compliance with the new regulations."
   
   
2. Implement procedures to confirm that the details on e-invoices match the hotel bookings and payments. This helps avoid discrepancies and ensures accurate financial records. A suggested policy update might be: "Verify that e-invoice details correspond with hotel booking and payment records before processing."
   
   

Additionally, ensure that your financial software integrates with the e-invoicing system to facilitate smooth processing and maintain compliance. 

Conclusion

As Malaysia’s e-invoice system takes effect, it is crucial for businesses to adapt their internal processes to comply with the new regulations. To sum up, for reimbursements related to personal funds used for hotel bookings, e-invoices are not required. Employees should only submit the original hotel receipt or invoice. On the other hand, when the company directly pays for hotel bookings, e-invoices are necessary for compliance and must be processed electronically.