Reduce IT and Finance Challenges with Intelligent eInvoicing

Gustavo Jiménez
April 12, 2018

Real-time electronic audits are increasingly common throughout Latin America, requiring companies to maintain 100% accuracy in their electronic documents and record-keeping. This process all starts with the eInvoice – audits are triggered if an invoice isn’t submitted correctly or if it is inconsistent with eAccounting reports and other electronic filings from a company’s buyers and suppliers. That’s why it’s essential for IT and finance teams to overcome common eInvoicing challenges to effectively manage compliance in Latin America.

IT and finance departments bear the brunt of the burden ensuring that eInvoicing is accurate and delivered in compliance with each country’s unique regulations. Here are some of the key challenges these departments face:

Finance

  • Errors and discrepancies – With greater audit automation, as well as the government essentially being a third party in every transaction, errors and discrepancies are easily discovered in eInvoices, eAccounting reports and other electronic records. Mistakes are costly. Mexico, for example, enacts a fine exceeding US$4,000 for each invoice that does not match accounting records. More significant problems can even result in a shut-down of operations.
  • Audit trigger points – Key audit triggers include sales, purchases, payments, payroll, and travel and expenses. Each line item in an expense report, each paycheck and each credit/debit note needs its own valid XML – a vast departure from traditional accounting methods.
  • Validation – Companies need to validate data to ensure all reports are backed by valid XML. Often, errors occur when there are cancellations or credit notes – which account for approximately 10 percent of transactions. Other common errors that can be caught with validations include missing payment classifications, foreign invoices and non-deductible expenses.

IT Challenges

  • Required automation – What were previously paper-based reports and manual procedures must be replaced with standardized, automated processes to eliminate errors and data discrepancies, and ensure that the tax authorities have clear visibility into all transactions. Most Latin American nations now require a real-time, full integration with the government, complete with strict process standards for eInvoicing.
  • Insufficient ERP support – Managing compliance within your ERP is the best way to ensure accuracy and maintain a centralized system of record. However, SAP and corresponding OSS notes alone don’t protect against real-time audits – failing to provide necessary functionality, like UUID validations.
  • Constant change management – Whether it’s a major legislative change or smaller field and labeling updates, tax compliance rules are constantly evolving. IT is often responsible for translating these frequent changes into software to ensure that the company maintains compliance without disrupting operations.

Effectively Address Finance and IT Challenges with Intelligent Compliance

While these challenges may seem daunting, particularly for multinational companies operating in several countries, there are several steps that can dramatically minimize the burdens related to VAT compliance and eInvoicing. When exploring solutions, consider those that:

  • Serve as a single source of truth for all transactions.
  • Offer economies of scale for the cost, support and monitoring connections to government web services.
  • Provide a single source for support, whether it is for a local team that needs assistance in their native language or the global SAP team that may prefer English.
  • Deliver regulatory analysis to keep you up-to-date with the local requirements in each country, eliminating fire drills associated with managing change internally.
  • Provide multi-country connectivity so you can comply with the mandatory requirements in all the countries you do business via a single provider.
  • Eliminate time-consuming, manual process with automation and built-in validations.

Take Action

To find out more about the risks and opportunities associated with mandated eInvoicing, download our Definitive Guide to Latin American Compliance.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Gustavo Jiménez

Gustavo Jimenez is the Product Marketing Manager for Sovos’ e-invoicing solutions and is based in Atlanta. Gustavo is responsible for go-to-market strategy for Sovos LatAm e-invoicing solutions in countries with existing and upcoming mandates. He has more than five years of experience in e-invoicing, middleware integrations, and regulatory research. He works closely with the product management and development team as well as sales and marketing to facilitate compliance process transformations for Sovos clients. Prior to joining Sovos, Gustavo was responsible for marketing activities and strategy at Invoiceware International, a leading e-invoicing solution for businesses with operations in Latin America. He focused on the go-to-market strategy of their solutions as well as communications with the LatAm market about regulatory changes and new solutions.
Share this post

North America Tax Information Reporting
March 22, 2024
Market Conduct Annual Statement Reminders and More

On the second Wednesday of each month, Sovos experts host a 30-minute webinar, Water Cooler Wednesday, to share the latest updates on statutory filings. In March, Sarah Stubbs shared information about the many filings due after March 1, from Market Conduct Annual Statements to health supplements for P&C and life insurers writing A&H businesses and […]

North America ShipCompliant
March 21, 2024
How Producers Can Build a DtC Shipping Market

Direct-to-consumer (DtC) shipping has become one of the leading sales models for businesses of all sizes and in all markets. The idea of connecting directly with consumers is notably attractive, as it helps brands develop a personal relationship and avoid costly distribution chains. Yet, for all its popularity, DtC is often a hard concept to […]

North America ShipCompliant
March 20, 2024
Key Findings from the 2024 DtC Beer Shipping Report

This March, Sovos ShipCompliant released the fourth annual Direct-to-Consumer Beer Shipping Report in partnership with the Brewers Association. The DtC beer shipping report features exclusive insights on the regulatory state of the direct-to-consumer (DtC) channel, Brewers Association’s perspective and key data from a consumer preferences survey. Let’s take a deeper dive into some of the […]

March 20, 2024
As the World Gets Smaller, Think Bigger About Global Tax Compliance

For the past few weeks back, my colleagues and I have been talking a lot about the importance of a global strategy when it comes to addressing today’s modern tax environments. On the heels of Sovos introducing the Sovos Compliance Cloud, many in our company’s leadership team have blogged about related topics and the critical […]

North America ShipCompliant
March 12, 2024
Florida HR 583 Set to Uncork Larger Format Wine Bottles

Florida wine lovers could soon enjoy a bigger selection of bottles based on a recent bill passed by the state’s legislature (HR 583) that would remove the existing cap on wine bottle sizes. What is Florida’s HR 583 bill? Currently, Florida law prohibits the sale of wine in bottles larger than one gallon (a little […]