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Latin America e-Invoicing Gov’t Mandates Eliminate Common Roadblocks
Government in LATAM• Mandates the use of electronic invoices• Mandates that supplier must make e-Invoice available to Buyer• Mandates the Format of the Invoice• Requirement of Supplier Invoice: Approved and Accompany the Truck
• Increases accuracy of what was ordered, shipped and invoiced• Invoice can arrive even before the Goods
Paper Invoices Supplier Rollout Multiple Formats Accuracy Timing
How to Approach Latin AmericaGovernment Compliance vs. Commercial Compliance
Compliance - Okay to Deduct Avoid ~$250 fine per invalid invoice The e-Invoice received must match the e-Invoice previously
registered with the Tax Authority. Valid invoice = Okay to Deduct VAT on remittances to
Government.
Account Payables Efficiency – Okay to Pay If PO backed, does invoice = PO = Goods Receipt? If not PO backed, does commodity manager or buyer approve? Have the Goods Arrived and been processed?
Working Capital Optimization Inability to optimize cash flow (e.g., Missed Discounts) Liquidity concerns for supplier operations Short-term investment of Cash
Mexico e-Invoicing: Mandated Inbound ValidationCountry Moves to CFDI
Mexico SAT - Real-Time Compliance Mandates• Real time integration – legacy was a batch process• Invoices must be registered and approved before being sent• Printed CFDI is also a valid, legal invoice, XML must be archived for 5 Years• CFDI may be received electronically in advance. Must be validated as authentic before payment.• Each outbound e-Invoicing solution must also provide for inbound validation as well• IMPORTANT: Step 6 – You do not want to pay invalid invoices – Audit Risk & You Assume Tax Issue
Real-Time E-InvoicingBaseline Compliance Process Sets the Stage for Straight Through Processing
Brazil Real-Time Compliance Mandates• Real time integration with Brazilian Tax Authority (SEFAZ)• For Accounts Payable – Goods Nota Fiscal, Service Invoices at City Level & CTe - Transporation • NF-e received electronically by recipient in advance. Must be validated and any returns accounted
for via “return order process”• SEFAZ does not validate your taxes in real time but they do data-mine to check later• Brazilian companies are responsible for accurate taxes of their suppliers as well
Paper
Electronic
Inbound A/P
• Paper not authoritative for compliance
• Suppliers must provide XML electronically
• Step 6 (required) sets up opportunity for automated matching & “straight-though” processing.
NFE EventsBi-Directional Process Orchestration with SEFAZ as the Mediator Between Parties
SEFAZ Solution – Two Way Process Orchestration via NFE “events”• NFE is acknowledged by the receiving CNPJ through event posted back to SEFAZ. • NFE must be acknowledged within 180 days initially, and eventually before shipment as phased roll-out progresses. • Greater burden on receiving CNPJ, but many large receiving CNPJ are pushing for these changes to guard against
ghost transactions in the first place.• Solution very similar to EMCS for Alcohol/Tobacco/Energy within Europe