Mexico CFDI eInvoicing – Red Flags to Avoid

Scott Lewin
June 19, 2013

So. . . you have received the news by now. And, most likely the Mexico change is starting to make waves through the organization. Well, hopefully it is making waves because if it’s not, cancel your plans for New Years. We estimate that over 20% of multinationals will struggle to meet the deadline because they will fail to evaluate solutions properly.

As the reality of this change and size of this change sets in, there will be a mad rush to find solution providers. We have been through this before in Brazil with NF-e 2.0 and when CFDI was first announced in Mexico several years ago. The problem is that most companies will underestimate this project or think that there is a standard solution from their ERP provider – rest assured this is nothing like CFD. It is not a simple XML schema or an internal signature that can be managed via a middleware like SAP PI. You have to have 3rdparties involved beyond the ERP system as you need a government signature – and if you miscalculate the implementation, day to day maintenance and change management – you will not be able to ship, collect from customers or ensure you pay your VAT remittances correctly.

Many companies will put a fire drill together and find a”band aid” way of complying with the mandate as it is not a budgeted project. However, the low cost solution will only look low cost because they will leave you doing all the work. Getting the “timbre fiscal” and unique IDs through the government providers is not the real problem with CFDI. The real problem is with the SAP configuration and customer specific requirements that you deal with on a daily basis.

So here are RED FLAGS to be aware of:

1) ”Just map your SAP data to this standard file format”– when you hear this, raise the flag and start waving. This is the most overlooked issue and the one that will derail your project and create issues with Customer collections and Supplier payments.

Why you ask: it is because there is no such thing as a standard SAP solution. No one company has implemented SAP ERP the same, there are pricing configurations unique to their business, unique internal processes such as payables processing, and unique end customer requests.

  • Classic data extraction issues include but are not limited to:
    • Discounts – there is only one field on the Mexico XML
      • What if your customers wants to see the discount per line item on the PDF
      • Is a discount a percentage, a flat rate, or some arbitrary logic that is customer specific
      • Question – how many customers do you have, how many different pricing configurations do you have – all of this will be difficult to map into a rigid XML
    • Surcharge
      • The Mexico XML has no field for Surcharge
      • Most customers want this as a line item on the invoice – how do you manage just this one example of an “Extended Attribute”
        • Extend Attributes are the issue with deploying along with Master data issues – if your provider doesn’t help you – you will be left with coding this and maintaining this throughout your SAP upgrades as well as through the constant government changes

2) ”We support the entire process for electronic invoicing in Mexico”– please ask what “the entire process” means to them as it most likely leaves out the major issues.

  • The main challenges are behind your firewall
    • Issues with your unique SAP system
    • Issues with printing the PDF to place on the truck
    • Reconciliation issues – Canceled Invoices, or managing Credit/Debit notes when a supplier invoices has the wrong tax information or pricing on it.
  • Most solutions stop at a “Service Transfer Point” meaning: once they hand the signed file back through the firewall – they are done. In reality, the process isn’t done until it is integrated to SAP and released for Payment.
  • The entire process needs to include keeping your SAP system able to comply with the regulations, today and into the future.

3) “It is just a local issue, and you don’t need a global project team or support team”– please ask yourself one question: how many projects that require deep SAP integration and configuration are just a local project?

It will affect the SAP system, require integration technology, require constant SAP monitoring and upgrades to meet the mandates, and more. For a multi-national – the SAP deployment affects the local team, and the in country requirements always affect the global IT teams.

4) “If you can just wait for a month or two, we will have a solution ready” Are you kidding???

  • What does this mean? Many large organization are going to wait on so called standard solutions because they saw these for CFD. However, CFD doesn’t have all the process issues of CFDI.
  • Also, CFDI has been around for more than 18 months — many companies had to transition in July 2012. How does any credible provider for CFDI not have a solution ready when it has been around for so long? What happens when the next change is announced?

500,000 companies are scrambling to meet this deadline. Make sure you have your strategy defined by the end of July.

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Author

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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