Do you still need to glue receipts on A4?

Every accounting firm in Malaysia knows the scene. A client drops off a plastic bag of receipts. Someone sorts them by month, then sits down with a glue stick and a stack of A4 paper and sticks down petrol slips, parking tickets and supplier receipts, three or four to a page. The long ones get folded. The faded ones get photostatted and the copy goes on the next page. Then punch, file, label the lever-arch file, find shelf space.

Ask why, and the answer is usually “LHDN wants it” or “the auditor wants it”. So it is worth reading what the rules actually say. The short version: they ask your clients to keep the receipts. They say nothing about glue.

What the income tax rules ask for

Section 82 of the Income Tax Act 1967 requires a business to keep sufficient records. LHDN explains what that means in its public rulings on keeping sufficient records: Public Ruling 4/2000 for companies and co-operatives, and Public Ruling 5/2000 for individuals and partnerships. Both were revised in 2001 and are still listed as current.

For a company, Public Ruling 4/2000 asks for:

• Books of account: a cash book, sales ledger, purchases ledger and general ledger, depending on the size and type of business, with each transaction entered within 60 days.
• Supporting documents: invoices, bank statements, pay-in slips, cheque butts, receipts for payments, payroll records and copies of receipts issued.
• Enough to explain each transaction, and to prepare a true and fair profit and loss account and balance sheet.
• Seven years, counted from the end of the year the income relates to. Longer if the tax return was filed late (7 years from the end of the year it was filed), or until an appeal is decided.
• Malay or English, or a translation when LHDN asks for one.
• Kept in Malaysia, at the registered office or business premises.

A made-up example: a client’s financial year ends on 30 June 2026. Seven years from the end of 2026 means its records for that year are kept until 31 December 2033.

The paper originals question

This is the part that surprises people. Public Ruling 4/2000, paragraph 3.3.3, says that if computers are used to record transactions, “original source documents such as invoices and receipts should be retained”. Where the original document is electronic, it can be kept electronically. Public Ruling 5/2000 says the same for sole proprietors and partnerships, and adds that originals should be kept “in their original form”.

Read plainly: a receipt that arrived on paper stays on paper for the 7 years, even after it is scanned. A document that arrived electronically, such as a PDF invoice by email or an e-invoice, can stay electronic.

For SST-registered clients the rule is written into the law itself. Section 24(4) of both the Sales Tax Act 2018 and the Service Tax Act 2018 says a record that started in manual form must be kept in its original form after it is converted to electronic form. More in SST record keeping.

If a particular client wants to go fully paperless, get confirmation from LHDN first. Until then, keep the paper.

What the rules don’t say

Nowhere do the rulings or the Acts say receipts must be glued onto A4, sorted a particular way, or photostatted. They say the records must be kept, must explain each transaction, and must be produced when asked. How the paper is stored is the firm’s and the client’s choice.

Gluing does do some useful jobs. Small slips don’t get lost. You can flip through a month like a book. There is space to write a reference next to each receipt. But those jobs can be done without a glue stick and an afternoon of OT.

A lighter way to keep the paper

1. One envelope per client per month. Client name and month on the front. Receipts go in as they are, no gluing, no trimming.
2. Number each receipt lightly in pencil on the back, in the order it is entered, and put the same number in the entry’s reference. That number is what links the paper to the books.
3. Make a clear digital copy the day it comes in. This is the copy your staff work from: reading, keying, checking. It is also the readable copy if the thermal original fades later. A photostat of a fading receipt was always just a readable copy kept next to the original. A clear scan made on day one does the same job without the trip to the photostat machine. More on why thermal receipts fade.
4. One box per client per year, labelled with the date it can be discarded, for example “Keep until 31 Dec 2033”. Store it somewhere cool, dry and away from sunlight.
5. Search the digital copy, then pull the envelope. When the auditor or LHDN asks for one receipt, you find it by vendor, date or amount, read off the month and number, and go straight to the right envelope. See how to find a document when LHDN asks.

The paper is still kept, as the rules ask. What goes away is the gluing, the trimming, the photostatting and the digging. Whether your auditor prefers the paper in envelopes or on sheets is worth a quick question. What they need is to find a document and see that it matches the entry.

Where AccPilot fits

AccPilot is the digital half of this method. Clients send receipts and invoices by web upload, phone photo, email or the client upload link your firm sends them. One photo with several receipts is split into separate documents. AccPilot reads the vendor, date, amounts, tax and line items, marks each document Ready or Check with the reason, and your staff export one clean Excel that imports into your accounting software. Every document stays stored and searchable by vendor, date and amount for 7 years.

It does not replace the paper originals where the rules ask for them to be kept. It replaces the gluing, the photostatting, the keying and the hunting through boxes. What stays with your firm is the judgement: what each receipt is for, how it is posted, and what to tell the client.

To see it on your own clients’ receipts, book a free demo.