Financial EDI: the antidote for corruption and tax fraud in Brazil
Brazil, the largest powerhouse in Latin America, has seen its economy’s GDP fall more than 3.5% annually in the last two years. Added to this crisis are political instability and corruption scandals that plague international companies, a situation that is leading Brazilian companies to seek greater measures of control and security in their operations with banks. In this scenario, financial EDI is recognized as an antidote for tax fraud.
What problems do companies in Brazil face?
The current flow of communication between corporations and financial institutions carries high risks for companies. In addition, the operations are inefficient and generally unproductive. This makes Brazilian companies less competitive in the global market.
Some of the big problems that companies using financial EDI hope to solve are the following:
Lack of security and risk of fraud in accounts payable and receivable operations since business’ transactions involving duties and commitments carried out by individuals.
Highlead time in processing accounts payable and accounts receivable transactions.
Inadequate use of resources for activities that do not add value to the company.
Errors when processing accounts payable and receivable transactions.
Dependency on people so that transactions are carried out.
How does financial EDI solve these problems?
Financial EDI is a type of technology based on electronic data interchange that allows companies to connect to the internal managements systems of banking institutions. As a result, collections, payments, extractions and any financial transactions happen seamlessly. This helps avoid human errors as well as the risk of fraud.
To ensure that the exchange of confidential documents is secure, EDI encrypts the data. In addition, the information is transmitted in a standardized way so that information is effortlessly integrated with any computer system.
In an interview, EDICOM’s sales manager in Brazil, William Pascheti, said, “It’s time for businesses to invest in EDI solutions.” The current situation of instability and recurrent scandals of corruption and fraud in the country make it more necessary, if possible, for corporations to implement measures to verify the efficiencies of their processes, following international compliance and corporate governance criteria.
In this regard, when implementing a financial EDI solution, companies must rely on technology providers that have international certificates to guarantee security. Among them is EDICOM an accredited ISAE 3402, based on the most important corporate governance regulations in the world: the SOX (Sarbanes-Oxley) standard.
What are the benefits of using financial EDI?
Companies that implement financial EDI are more competitive internationally and avoid the risk of fraud. The main benefits of this technology are:
Increased security in accounts payable and receivable operations. Transactions are carried out by honest, safe and reliable systems that automate processes without the need for human intervention.
More secure processes and optimization of compliance management with a low risk of fraud.
Reduction of lead time processing for accounts payable and receivable operations. This generates greater productivity.
Insertion of resources into activities that add value to the company.
Economic savings, linked to the automation of processes and the elimination of paper.
Beyond financial EDI
Electronic data interchange is an optimal technology not only in the financial field but also in the management of logistical, fiscal or administrative processes.