The implementation of e-invoicing represents a significant step in advancing the Philippines’ digital tax transformation and improving compliance efficiency among businesses. This study assessed the readiness of Micro, Small, and Medium Enterprises (MSMEs) in Cagayan de Oro City for the Bureau of Internal Revenue’s Electronic Invoicing System (EIS). Using a descriptive-correlational quantitative research design, the study evaluated MSME readiness in terms of organizational capability and environmental dynamics. The findings revealed that MSMEs are generally minimally ready for e-invoicing implementation. While basic digital resources and awareness of regulatory requirements are present, the level of preparedness in terms of structured planning, financial capacity, and workforce capability remains limited. Further analysis using regression techniques showed that both organizational capability and environmental dynamics significantly influence MSME readiness for e-invoicing. These results indicate that readiness is shaped by a combination of internal organizational factors and external environmental conditions. The study concludes that improving MSME readiness requires strengthening internal capabilities, such as digital infrastructure development, leadership support, financial planning, and employee competence, while also enhancing responsiveness to regulatory requirements and market conditions. These efforts may support MSMEs in transitioning more effectively toward e-invoicing and participating in the country’s broader digital transformation initiatives.