North America

The Top 10 Compliance Mistakes in LATAM

Gustavo Jiménez
June 8, 2018

This blog was last updated on March 11, 2019

In order for businesses in Latin America to reduce their risks of fines, penalties and operational disruptions, it’s imperative to understand and manage the ever-changing eInvoicing and VAT reporting mandates sweeping throughout the region. While proactive compliance can improve operational efficiency, streamline processes and increase cash flow, many companies do not have strategic processes in place to combat common compliance mistakes.

Below are the top 10 compliance errors that are costing companies time and money.

  1. Failing to identify their ERPs as compliance system of record – Companies often use multiple solutions because ERPs alone do not offer business-to-government compliance without multiple third-party add-ons. This creates a support nightmare, as discrepancies between the corporate system of record, external systems and what is reported to the government create huge tax and audit risks.
  2. Not automatically importing supplier XML into the ERP – Companies need to identify a system that can automatically import invoices into the system of record as government-approved documents. In doing so, there will be a verifiable trail in the event of an audit.
  3. Utilizing manual data entry – Systems that require companies to manually enter data are not only inefficient and time-consuming but also extremely risky, as errors as small as typos can lead to unnecessary fines.
  4. Overlooking reconciliation – As a result of new reporting requirements, it’s crucial businesses sync their daily data with the reports submitted at the end of the month or specific filing period. For many companies, however, data used for transactional reporting is separate from systems that produce summary VAT returns. This makes reconciliation and determining the source of truth difficult.
  5. Failing to maintain archives – Companies should utilize a solution that seamlessly maintains XML archives and records. Failing to do so results in extra work to validate compliance documents and tax calculations in the event of an audit. In most cases, it also violates eInvoicing and eAccounting regulations, resulting in additional fines and penalties.
  6. Attempting to manually manage inbound receiving – A manual, paper-based receiving process not only requires significant internal resources, it also increases the risk of error. This process can and should be automated to improve efficiencies and ensure accuracy.
  7. Underestimating the pace of change – Compliance mandates are continually updated. With more business processes affected, including accounting, operations and human resources, your solution must be able to keep up with the continual changes.
  8. Overlooking maintenance and support costs – Managing compliance internally requires up to 11 full-time staff, including personnel to monitor and manage regulation updates, middleware issues and ERP, as well as developers, financial analysts and more. Couple this with the hard IT costs associated with change management, and compliance easily total six figures – per country!
  9. Not having a contingency plan – In many countries, government-approved documents are needed to ship legally. Built-in back up processes are required to ensure there are no disruptions to your business operations and that you can always ship and receive goods.
  10. Failing to work with solution providers that offer local language support teams – Compliance in itself is a huge undertaking, but imagine not having access to a local support team that speaks your language. This could make sorting out issues an even bigger nightmare for companies in Latin America.

Take Action

To avoid making these common compliance mistakes, businesses in Latin America must work with a solution provider that offers a strategic and proactive approach to compliance management. Download our Definitive Guide to Latin American Compliance to learn how you can improve efficiency, lower costs and optimize your cash flow.

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

North America Tax Information Reporting
July 7, 2025
The Hidden Cost of the One Big Beautiful Bill: Why Raising Tax Reporting Thresholds Could Cost America Billions

This blog was last updated on July 7, 2025 In the whirlwind of tax policy changes sweeping through Congress, one provision of the recently passed “One Big Beautiful Bill” (OBBB) has quietly slipped through with minimal public scrutiny, despite its potentially massive fiscal impact. The bill increases the reporting threshold for Forms 1099-NEC and 1099-MISC […]

ShipCompliant Wine Summit
North America ShipCompliant
July 3, 2025
The 20th Annual Sovos ShipCompliant Wine Summit: Top Takeaways

This blog was last updated on July 3, 2025 For 20 years, the Sovos ShipCompliant Wine Summit has been about gathering winery professionals with the authorities and leaders who make the industry move. At this year’s Wine Summit, attendees heard directly from the regulators, attorneys and brand leaders shaping the future of the wine industry. […]

E-Invoicing Compliance North America
July 1, 2025
SOVOS + KPMG Blog Series: Part 1

This blog was last updated on July 4, 2025 The Global E-Invoicing Revolution: What U.S. Multinationals Need to Know By Paula Smith, Managing Director, Indirect Tax Technology Practice, KPMG LLP; Lauren Tallman, Global Invoicing Specialist and Senior Manager, KPMG LLP; and Christiaan Van Der Valk, General Manager, Indirect Tax, Sovos    If you’re a financial […]

natural catastrophe insurance in iceland
IPT North America
June 23, 2025
Treatment of Natural Catastrophe Insurance in Iceland

This blog was last updated on June 23, 2025 Iceland holds a unique and critical position regarding natural catastrophes due to its extraordinary geography and climate. Situated on the Mid-Atlantic Ridge, the country is one of the most volcanically and seismically active regions in the world, with frequent eruptions, earthquakes, and geothermal activity. Its mountainous […]

North America Tax Information Reporting
June 11, 2025
IRS FIRE System Sunset: What the IRIS Transition Means for Filers

This blog was last updated on June 16, 2025 The IRS has officially confirmed a plan to sunset the FIRE system, marking one of the most significant transformations in information return filing in decades. After serving as the backbone of electronic tax reporting since the 1980s, the Filing Information Returns Electronically (FIRE) system will be […]

See for yourself how the Sovos Compliance Cloud can meet your business' unique tax compliance challenges.
Book a Demo
© 2025 Sovos Compliance, LLC. All rights reserved.
Why Sovos?
Resources
About
Products
Indirect Tax Suite
Information Reporting and Withholding Suite
Specialty Products
Solutions
By Tax or Document Type
By Industry
By Team or Initiative
By Region