Top 3 Challenges of SAP-based eInvoicing and VAT Reporting

Gustavo Jiménez
January 16, 2018

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.

Take Action

Learn more about limitations with your existing SAP implementation and how you can adopt an intelligent approach for global compliance. 

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Gustavo Jiménez

Gustavo Jimenez is the Product Marketing Manager for Sovos’ e-invoicing solutions and is based in Atlanta. Gustavo is responsible for go-to-market strategy for Sovos LatAm e-invoicing solutions in countries with existing and upcoming mandates. He has more than five years of experience in e-invoicing, middleware integrations, and regulatory research. He works closely with the product management and development team as well as sales and marketing to facilitate compliance process transformations for Sovos clients. Prior to joining Sovos, Gustavo was responsible for marketing activities and strategy at Invoiceware International, a leading e-invoicing solution for businesses with operations in Latin America. He focused on the go-to-market strategy of their solutions as well as communications with the LatAm market about regulatory changes and new solutions.
Share this post

dtc spirits new york
North America ShipCompliant
February 14, 2025
A New Era for DtC Spirits Shipping: How New York’s Market is Taking Shape

This blog was last updated on February 14, 2025 In the fall of 2024, New York became the latest state to open its doors to direct-to-consumer (DtC) spirits shipping, marking a significant milestone for the industry. As one of the most populous states with a thriving market for craft and high-end spirits, the shift was […]

North America Unclaimed Property
February 10, 2025
Delaware Announces 2025 VDA Invitation Dates

This blog was last updated on February 14, 2025 Mark your calendars – April 11, 2025 and August 15, 2025 are this year’s anticipated release dates for the Delaware’s Secretary of State (SOS) VDA program invitations. In the event that an organization receives an invitation to participate in the Voluntary Disclosure Agreement (VDA) program  , […]

North America Sales & Use Tax
February 6, 2025
The Tariff and Sales Tax Mishmash – Untying the Mess

This blog was last updated on February 14, 2025 Talk of tariffs dominates the current news cycle with some commentators suggesting that tariffs will spell disaster for our economy while others say the exact opposite. We’ve seen the stock market sometimes fluctuate as tariffs are announced but later suspended, leaving us to wonder whether an […]

retailer dtc wine shipping
North America ShipCompliant
February 6, 2025
Retailer DtC Wine Shipping: The Time Has Come

This blog was last updated on February 14, 2025 By Tom Wark, Executive Director, National Association of Wine Retailers We are often reminded by the media and those in the wine industry—as well as by wine enthusiasts—that the three-tier system of alcohol distribution in most states hinders consumer access to the expansive number of wines […]

Montana 1099-DA
North America Tax Information Reporting
February 5, 2025
State Filing Alert: Montana’s New 1099-DA Requirements for Crypto Brokers

This blog was last updated on February 5, 2025 Reporting digital asset transactions on Form 1099-DA just got a little more complicated. For 2025 transactions, crypto brokers that file Form 1099-DA with the IRS will be required to file the 1099-DA with the State of Montana. This makes Montana the first state to introduce a […]