What is the difference between bookkeeping and accounting in Malaysia?
Bookkeeping is the day-to-day recording of transactions: sales, purchases, payments and receipts. Accounting uses those records to prepare financial statements, interpret results and support decisions and tax filing. Good bookkeeping comes first, because accounts can only be as reliable as the entries beneath them.
Bookkeeping is the routine, repeatable part of the work:
- Recording invoices, bills, receipts and payments
- Matching entries to bank statements
- Keeping the ledgers of customers and suppliers up to date
- Processing payroll entries
Accounting sits on top of that record. It covers:
- Preparing the financial statements (profit or loss, financial position, cash flows)
- Applying the right accounting standard, such as MPERS or MFRS
- Making year-end adjustments like depreciation, accruals and provisions
- Analysing performance and supporting budgeting and tax computation
In small businesses one person often does both, but the skills differ. A bookkeeper does not need to be a qualified accountant, whereas judgement-heavy tasks such as choosing an accounting policy or valuing assets usually need accounting training.
For a Malaysian company, the legal duty to keep proper accounting records (the bookkeeping side) is separate from the duty to prepare financial statements each year (the accounting side). Both duties fall on the directors, even when the work is handed to someone else.
Legal basis
- Companies Act 2016, s.245
- Companies Act 2016, s.248
Sources
Applies to 2026 · Last reviewed 29 October 2026
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
Related questions
- Is a Sdn Bhd legally required to keep accounting records?Yes. Section 245 of the Companies Act 2016 requires every company, including its directors and managers, to keep accounting and other records that explain its transactions and financial position. This applies even to a new, dormant or loss-making company.
- How long must a Malaysian company keep its accounting records?A company must keep accounting records for seven years after the transactions they record were completed. For tax, documents must be kept for seven years from the end of the relevant year of assessment. Use whichever period ends later.
- What documents should a Malaysian company keep for bookkeeping?Keep every document that proves a transaction: sales and purchase invoices, receipts, bank statements, contracts, payroll records, and records of assets and loans. If a transaction is not supported by a document, it is hard to defend in an audit or tax review.
- Can I keep accounting records and receipts in digital form only?Electronic records are accepted if they are complete, readable, accessible and can be converted into writing. Documents issued electronically, such as e-Invoices, can stay electronic. If you scan a paper original, the Income Tax Act says to keep the paper original as well.
- In what language must accounting records be kept in Malaysia?Books and records should be in Malay or English. If original documents are in another language, such as Chinese, keep them, and expect to provide a written translation at the company's cost if LHDN asks. Financial statements lodged with SSM need a certified translation if not in Malay or English.