Electronic invoicing in Colombia

What is RADIAN and How Does It Work in Electronic Factoring?

Factoring is a financial tool that allows companies to convert pending invoices into immediate liquidity by transferring collection rights to a financial institution or third party.

RADIAN is DIAN’s official platform for managing this process, ensuring all transactions related to the Electronic Sales Invoice like a Negotiable Instrument as transparent, verifiable and secure.
The key functions of RADIAN include:

• Registration of electronic invoices as negotiable instruments.
• Consulting and traceability of invoices circulating in the system.
• Recording key events such as endorsements, assignments, and payments.

Participation in RADIAN is mandatory for companies wishing to perform factoring transactions in Colombia.

Requirements for an Electronic Invoice to Qualify as a Negotiable Instrument in RADIAN

To be registered as a Negotiable Instrument in the RADIAN, an electronic invoice must meet the following requirements:

• It must be an Electronic Sales Invoice with prior validation, meaning it has been received and validated by the DIAN.
• It must include a declaration of rights and the issuer's signature.
• It must comply with fiscal and commercial regulations outlined in Colombia’s Tax Code and Resolution 000042 of 2020.
• The issuer must formally declare their intent to circulate the invoice via registration in RADIAN.

Additionally, the invoice must include the following elements: Expiration date, Electronic sales invoice receipt acknowledgment, Confirmation of goods/services received, Explicit or tacit acceptance of the invoice and payment terms (for credit invoices).

RADIAN Events: Key Elements for Factoring Management

The management of events in RADIAN is crucial for the operation of the system, since it allows invoices to be registered as a security and factoring transactions to be carried out.

The events in RADIAN correspond to digitally signed electronic messages, which make it possible to record the different operations that may occur in the life cycle of an electronic sales invoice.

What type of events can be registered in RADIAN?

• Electronic Sales Invoice registration as a Negotiable Instrument
• Endorsement (transfer of invoice ownership)
• Guaranty (guarantee on the invoice)
• Mandates (authorizations for actions on behalf of the owner)
• Report for payment (notification of the payment obligation)
• Payment of the electronic invoice as a negotiable instrument
• Limitations on the circulation of the invoice
• Protests (invoice disputes)
• Transfer of economic rights

To operate within RADIAN, users must specify the software they will use for generating, validating, and transmitting events associated with the electronic invoices. Additionally, if using third-party software, it must be pre-approved by DIAN.

Characteristics of RADIAN’s Functional Model

RADIAN's operating model is based on technological standards that guarantee the security and traceability of electronic documents.

Main characteristics of the system:

• Uses the UBL 2.1 XML standard for document structuring.
• Assigns a RADIAN Unique Electronic Document Code (CUDE RADIAN) for each registered event.
• Implements an Electronic Container (Attached Document) to ensure traceability.
• Requires digital signatures to be applied to ensure data integrity.
• Allows the generation of a Certificate of Existence and Traceability of the Electronic Invoice, a document that records the history of events of each invoice.
• Supports interoperability between user servers and email notifications.

Process for Generating and Submitting Electronic Payroll

To meet DIAN’s requirements, the electronic payroll issuance process must follow three fundamental stages:

1.    Document Generation and Digital Signature: Automation and Security in Document Processing

• The electronic payroll and adjustment notes are automatically generated and integrated based on data extracted from the company’s payroll software or BPO system.
• Digital signature mechanisms are applied, ensuring the authenticity of the document.
• The digital signature is issued by EDICOM’s Certification Authority in Colombia, ensuring regulatory compliance and document integrity.

2.    Automatic Submission to DIAN: Regulatory Compliance with Electronic Validation

• Once signed, the documents are transmitted to DIAN via EDICOM’s Global Compliance solution.
• DIAN validates the information and returns a confirmation message indicating the document’s status.
• If approved, DIAN stores and electronically signs the document, issuing a message with the status "Document validated by DIAN."

3.    Integration with Payroll Systems and Employee Distribution: Efficient Management and Secure Archiving of the electronic payroll

• EDICOM’s platform integrates DIAN’s confirmation message into the company’s BPO system, along with a printed representation of the payroll.
• Validated payroll documents are automatically sent to employees, streamlining the process without requiring manual intervention.
• EDICOM’s solution also securely archives electronic documents for the legally required period, ensuring integrity, traceability, and confidentiality.

EDICOM: DIAN-Authorized Provider for Electronic Payroll

As a DIAN-certified technology provider, EDICOM offers a solution that automates the generation and transmission of electronic documents required in the electronic payroll system.

Our platform facilitates the generation of two essential documents:

• Electronic Payroll: Also known as the Electronic Payroll Support Document, this document reflects an employee’s compensation based on their employment relationship with the company.
• Adjustment Notes: Electronic documents used to correct errors or make modifications to  electronic payroll records previously submitted to the DIAN.

Our solution seamlessly integrates directly with payroll management software, automating the entire cycle of document generation, validation, and safeguarding of these electronic documents.

Ticket Portal: Generating Electronic Invoices from Cash Register Receipts

Our Ticket Portal solution enables businesses and merchants to offer a transparent and automated system for customers to request their electronic invoices effortlessly.

How Does the Ticket Portal Work?

1. Data Export from POS: The business’s POS system generates a file containing the purchase receipt details. This file is automatically converted into an XML document in accordance with DIAN regulations.
2. Customer Data Entry: The customer accesses the Ticket Portal and enters their receipt details into a web form. The customer completes the information with the minimum fiscal data required for the generation of the electronic invoice.
3. Invoice Generation and Validation: EDICOM validates the data entered by the customer. The electronic invoice is generated in XML format, meeting DIAN’s compliance requirements. The invoice is validated and officially declared with the DIAN, ensuring its legal validity.
4. Delivery and Integration: The electronic invoice is sent to the customer in real time in both XML and PDF formats. The document is automatically integrated into the business’s management system.