If your company is expanding to Latin America, there are plenty of things you must get ready for. The economic landscape in each of the Latam region countries is different, and it is important to understand their risks and opportunities. One thing that may not come straight away to your mind is invoicing. Even if this is probably a small step in the long path of business expansion, it is definitely something you must learn about.
Though laggard in other economic aspects, Latin America stands ahead in invoicing matters. For more than a decade now, this region has been working on a new mandatory billing model that helps companies to save time and money and permits the Government, at the same time, to enhance the fight against tax evasion through a stricter fiscal control.
This is all possible thanks to electronic invoicing, which is much more than the migration to a paperless system. In Latin America, invoices must be issued on a digital form that respects a pre-established format. This way, invoices can automatically flow from account-payable departments to customers. These documents also include electronic certification elements, which, on one hand, guarantee the integrity and reliability of invoices and, on other, allow the government to exert a tighter control, lowering the risk of task evasion.
The e-Invoicing landscape in Latam
Even if electronic invoicing is broadly expanded across most of Latin American regions, this system is not mandatory for all companies. Countries such as Mexico, Chile, Brazil, Ecuador, Argentina, Colombia, Guatemala or Peru, have implemented compulsory models for electronic issuances and submissions. However, each country has developed its own e-Invoicing model.
Chile, for instance, was the first country to adopt this technology, and in the present 96 % of the transactions take place via e-invoicing. According to Chile’s Internal Revenue Service, 7 out of 10 large companies have embraced the new billing rules, and small and medium-sized businesses are expected to become next in the line to comply with the e-billing legislation, from August 2016.
In Mexico, electronic invoicing model is mandatory for all companies with over 4,000,000 Pesos of annual income (roughly $330,000). They must also store all of their invoices worth over 2,000 pesos electronically, in an officially approved “Digital Invoicing via Internet” format, known as CFDI.
These are just two examples of a new reality that keeps on expanding. In 2014, more than half of the e-invoices exchanged worldwide, roughly 25 billion, corresponded to Latin America. This figure is expected to keep on growing, which is why electronic invoicing is a crucial issue to think about before expanding to Latin America.
A unique solution for multiple requirements
Opening business in a different country is already hard enough to figure out how to issue invoices in each country. The complexity of legal and technical requirements call for the services of a technology partner. This is why at EDICOM we are ready to make your work easier thanks to our LATAM e-Invoicing solution, constantly updated by a Permanent Electronic Invoicing Observatory run by dedicated technicians that will make your expansion to Latin America easier.