E-invoicing mandates continue to expand throughout Latin America. Just a year ago, only three countries in the region enforced compliance mandates. This year, seven countries have enacted e-invoicing legislation, with more set to join the movement in the near future.
In this four part blog series, we will examine mandates in three countries expanding enforcement in 2015:Peru, Uruguay and Ecuador. Specific requirements vary significantly from country to country, but these mandates always affect five core aspects of business:
1) Accounts receivable – Invoices will not be paid unless they have been approved through the government server.
2) Accounts payable – Likewise, companies should not pay invoices that have not been verified or that do not match the goods received.
3) Shipping – Government-verified copies of the XML must accompany all shipments. Otherwise, they may not leave the warehouse or will be rejected upon arrival.
4) Tax reporting – From the governments’ perspective, tax reporting is the entire purpose of initiating these mandates. Government approval of e-invoices ensures the accuracy of tax deductions, and improves visibility into errors.
5) IT – Compliance requires complex systems to integrate financial processes with government servers, and all systems must be tested before the mandates begin.
Because compliance affects so many business processes, and errors can have such significant consequences in the forms of fines, penalties and operational shut downs, companies should carefully evaluate potential solutions. One that is patch-worked together – meaning, multiple solutions in each country with bolt-on additions for each new mandate – leave risky gaps in data management and reporting. Instead, companies should look for an end-to-end solution with a proactive approach to change management and real-time reports, since compliance is a real-time process.
While Peru, Uruguay and Ecuador have much in common as referenced above, unique requirements in each mean you have to carefully consider the processes required in each to determine the best solution. Stay tuned for closer looks into each of these new mandates.