Top 3 Challenges of SAP-based eInvoicing and VAT Reporting

This blog was last updated on March 11, 2019

As tax authorities in Latin America, and now Europe, adopt new eInvoicing and eAccounting initiatives, companies are realizing that SAP is not equipped to support the unique needs from country to country.

When faced with this challenge, some companies either opt to manage compliance internally or move compliance outside of SAP, both of which are costly, time-consuming and introduce opportunities for errors. Internal compliance management can require up to 15 full-time equivalents, who must deal with constant fire drills to address issues and account for regulatory changes. Moving compliance outside of SAP, however, can leave your company vulnerable to errors and discrepancies that trigger costly audits, fines and penalties.

eInvoicing in SAP is not as easy as one may think.

The combination of SAP and new tax compliance regulations result in a number of challenges for businesses in Latin America:

1. Constant change management – If one thing is constant with tax compliance rules, it’s change. From major new legislation to smaller field changes, companies must be able to anticipate and quickly adapt while not disrupting operations or risking non-compliance.
2. Internal processes: Compliance often requires changes to basic processes, procedures and technologies employed by global companies. For example, in Latin America, logistics can be impacted because many countries now require eInvoices to act as a bill of lading, created before products can ship.
3. Required automation: Standardization requirements in Latin American and Europe are designed to eliminate errors and data discrepancies. Previous paper-based reports and manual procedures will need to be automated to comply.

Best Practices for SAP Implementation in Latin America

Instead of trying to develop in-house compliance expertise or move these responsibilities out of SAP, businesses need an intelligent solution that maintains SAP as the central source of truth while having the flexibility to adapt to the frequent pace of change. SAP Centers of Excellence (COE) are turning to this implementation model to manage local government requirements, such as Brazil Nota Fiscal, Chile DTE, Mexico CFDI, Argentina eFactura, and Colombia FE.

Within SAP, companies can:

• Manage the unique configurations of their SAP system
• Protect the centralized SAP system from forced upgrades when the government announces changes
• Relieve the SAP COE from having to understand, interpret and implement the local changes into the corporate SAP system
• Manage contingencies to ensure you can ship to your customers and close your books

Meanwhile, the intelligent, cloud-based solution provides:

• Economies of scale for the cost, support and monitoring connections to government web services.
• A single source for support, whether it is for a local team that needs assistance in their native language or the global SAP team that may prefer English.
• Regulatory analysis guaranteeing compliance by staying up to date with the local requirements in each country. This eliminates all of the fire drills associated with managing change internally.
• Multi-country connectivity so you can comply with the mandatory requirements in Brazil, Mexico, Argentina, Chile, Colombia and European countries via a single provider.