AP and VAT Remittance Issues Ahead as Mexico CFDI Usage Becomes Mandatory

Scott Lewin
April 3, 2013

In my last post, I discussed expected changes as the Mexican government continues to implement and push the usage of CFDI. I wanted to expand upon the potential issues facing Procurement and Accounts Payable users and managers as I feel it is an underestimated issue.

As discussed, 90% of invoices in Mexico today still fall under the legacy regime of CFD which has a completely business process. And today, many companies still use manual data entry to comply with the inbound validations which are mandatory. Remember, the government announced on Dec 28, 2012 that the validated invoice XML structure of the CFDI must be archived for a period of at least 5 years. This XML will be used as the single version of the truth for auditors when reviewing VAT tax discrepancies.

So herein lies the problem — when the government sunsets the old CFD process, an organization could see their inbound CFDI volume double if not triple. There is no way that manual processes will be able to keep up with the increased load so automation is going to be necessary. Here are some recommendations in the short term for AP managers or Shared Service managers looking at Mexico eInvoicing.

  1. Ensure you’re compliant with the Dec. 28 2012 legislation for XML validation and archiving today. Many companies are not doing this process properly, and you need to be sure to get compliant regardless of CBB, CFD or CFDI invoices.
  2. Understand the volume of CFD versus CFDI you are receiving today and will be receiving in the future as the government changes.
  3. Understand how you are proving validations of the inbound documents – many PACs in Mexico still have very basic validations that don’t cover all requirements.
  4. Go beyond the “okay to deduct” which is the government validations of the comprobante and look into the “okay to pay” processes which will ultimately streamline your Inbound Receiving and Payables process. There is the government mandate; and then there is the improvement in efficiency of using the government mandates to streamline your operations.

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Scott Lewin

Gain timely insight and important up to the minute information about the current legislative changes in Latin America, including Brazil Nota Fiscal, Mexico CFDI, Argentina AFIP and Chile DTE. Learn how these changes affect your operations, your finances and also your Information Technology teams.
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