My last post highlighted the expected change to the Mexican electronic invoice regulations. The reality is that more than 90% of invoices in Mexico are still transmitted using the older CFD process, not the version of CFDI which requires real time government validations. In conversations with a number of companies this week, I realized that organizations were not only unaware of this huge change; they also were unprepared for how to plan internally. Even companies that currently are using the CFDI process can expect this change to impact them. So to net it out – there are five mission critical points you should plan for as you look at migrating from CFD to CFDI.
1. Accounts Payable Validation – Many companies are still validating there invoices manually with the Mexico SAT. This may be fine for a few invoices per day. But when the government makes the changes to CFDI, your organization will see a dramatic increase in the amount of XML (electronic invoices) received. For most multi-nationals, the volume will require automation. So even if you currently support outbound CFDI, make sure you are prepared to automate the inbound validation process within SAP as volumes dramatically increase.
2. Implementation –For an SAP account this will not just be a web service connection, it will be a change to your SAP system configuration.
• Who will do this work – you, your SI, or does your CFDI provider take care of this task?
• Will you have to configure and manage a middleware (i.e. SAP PI) in order to exchange the IDOC with the CFDI provider?
• How will you manage the integration of customer specific Addenda?
• How will you manage the real time processes of printing, cancellations, et al…?
3. Monitoring – The CFDI process can affect your ability to ship just like in Brazil.
• Will you have one single monitor in SAP?
• Or will you have three separate monitors: one in SAP ERP, another monitor in the middleware, and another monitor in a 3rd party solution? <— AVOID
4.Maintaining – As the mandates take hold, they will not be static. They will be constantly changing and evolving. In the last 18 months, the Mexico SAT came out with multiple announcement. The most recent one required the buyer to validate and archive inbound XML (December 28, 2012). Who will keep up to speed with the fiscal changes and the impact to SAP?
5. Lastly,there are thousands and thousands of companies that will need to transition when the change takes place. You need to ensure you are starting conversations with your vendors soon in order to understand the level of effort, impact to your SAP system, and resource availability given the expected number of companies needing to move. My experience in these situations is companies who wait to the last minute will miss out on the deadlines imposed.
This transition should not be overlooked – the question is – what are you doing today so you are prepared when the changes are announced or are you one of the companies that waits to the last minute? Remember, failure in the Latin American compliance markets translates into fines, criminal penalties, customer collection issues and potential delivery/shipping delays.
Sign up for email updates
Stay up to date with the latest tax and compliance updates that may impact your business.