As a result of an e-invoicing mandate currently rolling out in Argentina, small and medium-size businesses (SMBs) are or will soon be required to use a specific form of invoice when billing larger companies.
Companies classified as SMBs (or PyMEs in Spanish) by AFIP, the Argentine tax administration, are required to use the Facturas de Crédito Electrónicas (FCE), a new type of electronic invoice that gives them the option to expedite cash flow by selling their accounts receivable (AR) invoices to financial institutions.
New e-invoicing mandate rolling out now in Argentina
The mandate began rolling out by industry on May 1 and will finish its rollout on Oct. 1. While the new invoice type is mandatory for transactions that occur between SMBs and large companies, it is optional for use between SMBs. This type of invoice permits smaller businesses to negotiate their sales invoices in the financial sector and anticipate AR collection.
Large companies that receive the new type of invoice have 30 days to accept or reject it, or they can choose to accept it by default. Transmission of the invoice takes place entirely through AFIP, which regulates and controls the invoicing process and notifies participants of the status of each invoice.
SMBs can send outbound invoices via the AFIP website manually or can leverage a company like Sovos to automate the process using the web service published by AFIP.
A shift aimed at boosting financing options for SMBs
The mandate is causing both small and large companies to react by ensuring that their invoicing systems and processes are compliant. Smaller firms have to be able to generate an FCE when doing business with a large company, and big organizations need a solution that will enable them to comply with the mandate and receive, and accept or reject, inbound FCE invoices from smaller trading partners.
This is a huge opportunity for SMBs to improve cash flow. By using the FCE, SMBs will be able to reduce days sales outstanding, or DSO, collections, which could prove critical to their operations and liquidity.
Sovos has more than a decade of experience with Latin American e-invoicing and helps companies meet constantly changing mandates in Argentina and all over the region. Learn more about Sovos e-invoicing compliance solutions.