Common SAP ERP Fiscal Reporting Gaps Perpetuate Compliance Risks in Latin America

Scott Lewin
October 1, 2015

Compliance with complex e-invoicing and e-accounting legislation in Latin America requires a dedicated, multi-tiered, flexible solution. While corporate governance and risk management dictate that such compliance be managed through corporate ERP systems, SAP’s support of these regulations has historically been fragmented, leaving gaping holes that result in severe audit and penalty risks.

For example, SAP focuses its Brazil SPED maintenance on key federal-level reports, including SPED accounting, but does not fully support other reporting requirements like Ficha de Conteúdo de Importação (FCI) and Guia de Informação (GIA). In Peru, Libros mandates new reports, but many of the recently required data elements aren’t covered with standard SAP OSS notes. Click here to listen to the webinar replay, “Common SAP ERP Gaps in VAT & Fiscal Reporting in Brazil”.

Such holes force companies to implement outside solutions or expend significant technical resources to build their own reports. However, it is critical for companies operating in Latin America to take a holistic view of compliance. Solutions that don’t focus on end to end compliance leave companies vulnerable to fines and even operational shutdowns. All fiscal processes and transactions – from the initial e-invoice to the final tax reports – should be integrated and automated to guarantee consistency and minimize the risk of error.

Despite this need for an integrated approach, ERP systems, including SAP, tend to lack support for state, municipality and industry reports. For example, Argentina’s VAT perception tax is done at the state level, with each state requiring a different data as legislation evolves. This leaves companies unable to implement standard SAP templates, and most have difficulty customizing their ERP to meet these requirements – especially considering the frequency changes required.

Latin American financial regulations are complex – increasingly so – making it important to look for a regional compliance partner that truly gets the implications and opportunities that come with these requirements. Regulations throughout Latin America are constantly changing. For instance, ECF (net income reports) was a recent addition to SPED accounting requirements that takes effect this month, and Block K (inventory reports) is a change to SPED fiscal reporting taking effect in January 2016. Reactionary approaches to these changes leave companies vulnerable and can be implementation and customization nightmares. Managing compliance through add-on solutions and multiple implementations increases the risk of errors, which can quickly trigger audits and penalties.

As compliance regulations throughout Latin America continue to expand, now is the time to turn to a regional provider that understands the impact of these regulations on global corporations. As governments continue to integrate and link required reports to e-invoice transactions for greater transparency (like Brazil, Mexico and Chile), an integrated approach to compliance is becoming even more imperative. Companies who rely on their ERP systems or local solutions risk gaps in compliance and miss opportunities for innovation. Contact us today to learn how we’ve helped some of the world’s largest companies proactively manage compliance – seamlessly within their existing ERP.

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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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