Do I Need a Bookkeeper for My Sdn Bhd?

If you recently registered a Sdn Bhd in Malaysia, there is something you need to know that most people do not tell you upfront: the law requires you to keep proper accounting records. This is not optional. It is not a suggestion. It is a legal requirement with serious penalties.

I have met too many Sdn Bhd owners who only found out about this when their auditor asked for records that did not exist, or when their tax agent could not file because the books were a mess. By then, the cleanup costs far more than it would have cost to keep things organised from the start.

What the law says

Section 245 of the Companies Act 2016 is clear. Every Sdn Bhd must keep accounting records that sufficiently explain the transactions and financial position of the company. These records must enable the preparation of true and fair financial statements that can be properly audited.

There are three specific rules under this section:

1. Record within 60 days. Every transaction must be entered into your accounting records within 60 days of completion. You cannot wait until the end of the year to start recording.
2. Keep records for 7 years. All accounting records must be retained for at least 7 years after the transactions they relate to. This includes invoices, receipts, bank statements, contracts, payroll records, and tax documents.
3. Records must be audit ready. The records must be kept in a way that allows them to be conveniently and properly audited. This means they need to be organised, not just stored in a box.

On top of this, Section 82 and 82A of the Income Tax Act 1967 also requires every taxpayer to keep sufficient records for 7 years. So the same rule applies from both the company law side and the tax law side.

What happens if you do not comply

This is the part that catches people off guard.

Under Section 245(9) of the Companies Act 2016, failure to keep proper accounting records is a criminal offence. If convicted, the penalty is a fine up to RM500,000, imprisonment up to 3 years, or both. This applies to the company and its officers (meaning directors).

This is not theoretical. In a case reported by Stanley & Co, a car accessories business owner was fined RM37,000 for 6 counts of failing to keep business records (sales ledgers, general ledgers, payment vouchers, and receipts) over a period of several years. The Income Tax Act 1967 has its own set of penalties for the same issue.

Beyond fines, if LHDN audits your company and your records are incomplete or missing, they have the right to estimate your income and tax you on that estimate. This almost always results in a higher tax bill than what you would have paid with proper records.

Bookkeeping vs accounting vs auditing

Many Sdn Bhd owners confuse these three things. They are related but they are not the same.

Bookkeeping is the day to day recording of your business transactions. Every sale, every expense, every bank transaction gets recorded and categorised. This is the foundation of everything else. Without clean bookkeeping, your accountant and auditor cannot do their jobs.

Accounting is the preparation of financial statements from those bookkeeping records. This includes your Profit and Loss statement, Balance Sheet, and tax computation. Your accountant or tax agent uses your books to prepare these documents for LHDN filing and SSM compliance.

Auditing is the independent verification that your financial statements are accurate and comply with approved accounting standards (MPERS for private companies in Malaysia). Every Sdn Bhd is required to have its accounts audited annually, unless it qualifies for the audit exemption under Section 267A of the Companies Act 2016.

Bookkeeping feeds into accounting, and accounting feeds into auditing. If the bookkeeping is wrong, everything downstream breaks.

Can you do your own bookkeeping?

Technically, yes. There is no law that says you must hire a bookkeeper. The law only says you must keep proper records.

But in practice, most Sdn Bhd owners I work with tried doing it themselves at first and gave up within a few months. The reasons are always the same: they do not have time, they are not sure how to categorise transactions, they fall behind and it snowballs, and by the time tax season comes around they have months of unrecorded transactions.

If your Sdn Bhd has fewer than 10 transactions a month and you are comfortable with accounting software, you might be able to manage it yourself. But once you hit 30 to 50 transactions a month, a dedicated bookkeeper will save you time, prevent errors, and make sure your records are always audit ready.

What records your Sdn Bhd must keep

Based on the requirements under both the Companies Act 2016 and the Income Tax Act 1967, here is the full list of records your Sdn Bhd should be maintaining:

• Sales invoices, delivery notes, and credit notes
• Expense receipts and supplier invoices
• Bank statements and cheque records
• Payment vouchers and petty cash records
• Contracts and agreements
• Payroll records (salary slips, EPF, SOCSO, EIS)
• Tax returns and correspondence with LHDN
• MyInvois e-invoice records (if applicable)
• Asset registers

All of these must be kept for at least 7 years. They can be stored digitally, but they must be retrievable and legible. If you have thermal paper receipts, scan them now because they fade over time.

How I help Sdn Bhd owners

At IzzBookkeeping, a large number of my clients are Sdn Bhds. Here is what I handle for them every month:

• Recording all income and expenses within the 60 day requirement
• Reconciling bank statements with accounting records
• Organising receipts and invoices in cloud storage
• Preparing monthly Profit and Loss and Balance Sheet reports
• Making sure everything is audit ready for your auditor
• Keeping records organised for when your tax agent needs them

My Growth plan (RM450 to RM650 per month) is the most popular with Sdn Bhd clients because it includes the Balance Sheet and Cash Flow reports that your auditor will need, plus quarterly reviews so you always know where your business stands.

If your Sdn Bhd is behind on its books, I also offer one time cleanup services. An annual account cleanup starts at RM1,800 for Sdn Bhds, and backlog cleanup for 2 to 3 years starts at RM3,000.

Common questions