SAP Gaps in Business-to-Government Compliance Require a 3rd Party

Steve Sprague
June 10, 2015

It’s understandable that multinational companies operating in Latin America’s complex regulatory environment first look to their ERP for compliance solutions. After making significant financial, IT and operational investments in SAP, managing compliance within this existing infrastructure is no doubt desirable. However, there are several factors that need to be considered when planning out your compliance strategy, especially across Latin America.

1)    SAP’s Latin American compliance solutions are both limited in scope and country specific, requiring resource knowledge in several systems.Key factors need to be considered when planning compliance strategy in Latin America.

  • In Mexico, it’s a combination of OSS notes, IDOC outputs, PI and 3rdparty pack;
  • in Argentina, it’s OSS notes, PI and typically a set of customizations;
  • in Brazil, it’s OSS notes, PI, GRC plus an additional 3rd party for integrated statutory reports called SPED, and
  • in Chile and Peru, it’s AIF plus internal management of Libros and an additional separate solution for the Accounts Payable requirements.

Each of these solutions requires different implementation processes and separate trainings and management to use. These separate solutions also limit corporate visibility into local compliance, leaving room for errors and even external data manipulation. Imagine: in just five countries, you could be required to implement, monitor and maintain eight separate solutions with over 20 functional modules that need to be upgraded annually.

2)    Solutions are delivered as support packs that require SAP updates and could require complete regression testing, often with little time to spare prior to deadlines.
Compliance in Latin America requires constant monitoring of the changing requirements and significant planning to meet compliance deadlines. Staying current with the latest SAP release is not enough. Hundreds of OSS notes are not uncommon after the initial release to address issues, leaving companies vulnerable to e-invoicing and reporting discrepancies in the meantime that can result in fines and penalties. More importantly, as these country changes require an expected baseline of configuration – it is not uncommon to have to regression test all countries on a global template. This is a significant cost and one that is often underestimated by the COE.

3)    Leveraging SAP for compliance requires significant internal management.

Internal COE teams should be focused on innovation and business excellence; however, trying to maintain SAP for compliance takes valuable time away from this mission. Not only can the initial implementation and manual configuration take weeks, but constant maintenance and updates are required to ensure uninterrupted compliance – demanding a disproportionate amount of the COE’s valuable time and efforts.

These limitations aside, it’s important that your compliance solution work within your existing ERP. That’s where Sovos comes in. Our end-to-end compliance platform eliminates the inefficiencies and inadequacies of SAP’s solutions while managing mandated e-invoicing and reporting within SAP – requiring no back and forth with additional systems and ensuring that fiscal reporting and legal compliance are always in sync. 

To learn more about the limitations of using SAP for compliance, and to hear how Lexmark approaches its Latin American compliance decisions, listed to our webinar here

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Steve Sprague

Como director comercial, Steve Sprague dirige la estrategia corporativa, las iniciativas de penetración de mercado y de field enablement para el negocio del impuesto sobre el valor añadido global (GVAT) de la empresa. El estilo de liderazgo de Steve se basa en su convicción de que, para que las organizaciones tengan éxito, deben comprometerse e invertir en los tres pilares estratégicos de la empresa: las personas, las prácticas y los productos.
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