Manufacturers Can’t Escape The Impacts of eInvoicing

Gustavo Jiménez
June 21, 2018

As eInvoicing mandates sweep across Latin America, manufacturing is arguably the single most affected sector. With requirements impacting IT, finance, shipping, inventory management, inbound receiving and other business processes, eInvoicing greatly impacts the supply chain and manufacturers’ bottom lines.

If not managed properly, eInvoicing could prevent trucks from distributing goods or force buyers to refuse shipments, all of which can bring business to a screeching halt. In many Latin American countries, eInvoices act as a bill of lading. This means that manufacturers are unable to fulfill orders unless an invoice is valid and physically present with the shipment.

Brazil eInvoicing Benchmark: From Manufacturer to Final Destination

Brazil has some of the most complex shipping requirements in the world. The country continues to introduce increasingly cumbersome, technology-driven tracking and reporting initiatives. Manufacturers in Brazil must adhere to the following regulations:

  1. All shipments must be accompanied by commercial transport (CTe) and manifest (MDFe / Manifestacao do Destinatario) documents.
  2. Buyers must match inbound shipments to the government-approved eInvoice, which ensures receipt and accuracy of the shipment.
  3. Brazil-ID, which employs radio frequency identification (RFID) technology to track goods from the warehouse to the final destination.
  4. Detailed inventory tracking as specified by Bloco K. These reports include production and manufacturing information related to the usage of raw materials and components, including ICMS and IPI collected, inventory and stock movement, finished products manufactured, components lost during the process, third party manufacturing information and more.
  5. Under NFe 4.0, companies subject to sanitary regulations or recall cases, as well as those that produce agricultural pesticides, veterinary products, dental products, medicines, beverages, bottled waters and food packaging, must report the date of manufacture, expiration date, batch number and quantity. By knowing how products move throughout the supply chain – from farm or origination to consumers – authorities can easily track down recalled, contaminated or illegal goods, and minimize the resources needed to conduct inspections and curb the use of illegitimate transit services.

The risk of inaccurate or incomplete eInvoices is too great for manufacturers to trivialize, potentially shutting down operations for days when goods are unable to be shipped or received because of non-compliance.

As evident from Brazil’s evolving eInvoicing regulations, the entire supply chain is impacted by disruptive VAT regulations. That’s why it’s important for companies not only to involve tax, finance and IT teams, but also logistics and operations as changes are made to invoicing and financial processes in Brazil and other Latin American nations. Doing so will ensure that invoices are transmitted seamlessly and accurately from the start, supporting outbound shipping and operations.

Benefits of eInvoicing Realized in Inbound Logistics

Because mandated eInvoicing standardizes information among buyers and suppliers, these regulations can result in significant benefits for companies that implement a strategic, proactive approach to compliance. Since governments require eInvoices to accompany all shipments, they are easily verifiable upon receipt. Instead of a time-consuming, manual inventory management and data entry process that many companies use, eInvoicing enables companies to manage inbound logistics with a single scan-and-click process. Companies can reap significant rewards from this standardization and automation, reducing inbound receiving costs by up to 40 percent and increasing employee productivity by up to 50 percent.

Take Action

As more and more Latin American countries expand eInvoicing requirements, it’s important for manufacturers to understand how inaccuracies or mistakes will hamper the supply chain, and the benefits they can derive from the new standardized, automated processes. To stay on top of these changes, subscribe to our blog.

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

LATAM VAT & Fiscal Reporting
May 20, 2020
Sovos Acquires Taxweb, Extends Tax Determination Capabilities in World’s Most Challenging Compliance Landscape

Earlier this month Sovos announced its second acquisition of 2020, completing our solution for Brazil with an unparalleled offering that solves tax compliance in the place where it is most challenging to do so.  Too many companies doing business in Brazil have been burdened by managing multiple point solutions for continuous transaction controls (CTCs), tax […]

Sales & Use Tax United States
November 30, 2020
Important Details on the Tennessee Economic Nexus

Following the South Dakota v. Wayfair, Inc. decision, almost every state has adjusted its sales tax nexus. The Tennessee economic nexus is no exception. Initially, Tennessee required remote sellers with $500,000 or more in sales to Tennessee customers to register and collect Tennessee sales and use tax. However, as of October 1, 2020, the threshold […]

Sales & Use Tax United States
November 30, 2020
West Virginia Sales Tax Nexus Details

The West Virginia sales tax nexus changed after the South Dakota v. Wayfair, Inc. decision. Effective January 1, 2019, remote sellers that have no physical presence in the state must now register, collect and remit sales and use taxes in West Virginia should they meet the threshold or transaction amount. In addition to the remote […]

EMEA Spain VAT & Fiscal Reporting
November 26, 2020
Spain Extends SII Scope From 2021

The tax authority in Spain, Agencia Estatal de Administración Tributaria (AEAT), aiming to enhance the Immediate Supply of Information (SII) version 1.1, has introduced new validations and fields to the schema expected to be enforced from 1 January 2021. The new fields will record the sales of goods in consignment (Venta de bienes en consigna) […]

E-Invoicing Compliance EMEA VAT & Fiscal Reporting
November 25, 2020
Audio Blog: Brexit and VAT

Brexit: What are the Implications for VAT Brexit is set to become reality at the end of December. So, what does it mean for organizations doing business in the UK and the European Union? Turns out, there are several tax implications that will need to be accounted for. In this episode of the Sovos Expert […]

EMEA VAT & Fiscal Reporting
November 25, 2020
HMRC issue guidance on VAT accounting processes for goods moving between Great Britain and Northern Ireland from 1 January 2021

HMRC has published a policy paper that outlines the VAT accounting process for goods moving between Great Britain (GB) and Northern Ireland (NI) from 1 January 2021. As from 1 January 2021, the Northern Ireland protocol will come into force which means that NI will remain in the part of the single market and customs […]