This blog was last updated on March 11, 2019
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:
- All shipments must be accompanied by commercial transport (CTe) and manifest (MDFe / Manifestacao do Destinatario) documents.
- Buyers must match inbound shipments to the government-approved eInvoice, which ensures receipt and accuracy of the shipment.
- Brazil-ID, which employs radio frequency identification (RFID) technology to track goods from the warehouse to the final destination.
- 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.
- 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.
