Blog post

SYNCHRO and Invoiceware International Address LATAM Tax Challenges

By Robert Anderson | July 31, 2015 | 1 Comment

Technology and Emerging Trends

A market’s heating up that isn’t called out very much that’s particularly relevant for businesses seeking to enter and do business in Latin America. Its name: E-invoice compliance solutions.

Many countries, from Brazil to Mexico, Argentina, Chile and now Ecuador have specific regulations for businesses related to ensuring they capture and report financial transactions in their countries. These regulations are complex and, to add insult to injury, ever-changing. In many cases changes can occur 2-3 times a year in each affected country. The penalties for non-compliance can be severe. This often comes as a shock to global businesses seeking to penetrate Latin America. What it means is that they either have to modify their processes to support the regulations on their own (it’s onerous because it’s a full-time job and just think if you have to do it for 5 different countries ;), or, work with their business application providers to ensure they or their partners have pre-packaged solutions to help support them. The most important task is to ensure automated capabilities are in place to capture the right information, calculate the right taxes properly and are then tightly integrated with the underlying ERP systems for reporting purposes.

Over the last two months I’ve spoken with two companies whose sole purpose is to address these challenges: SYNCHRO (http://www.synchro.com.br/), based in Brazil, and Invoiceware International (http://www.invoicewareint.com/), based outside of Atlanta, Georgia.

SYNCHRO is the largest national provider of tax solutions in the Brazil, with a portfolio of more than 400 economic groups, 14,000 users and 44,000 tax establishments. Since 1991, its developed solutions to respond to the needs of the complex Brazilian taxation scenario, arguably the most challenging on the planet. SYNCHRO is now beginning to break ground outside of Brazil, where the automated capturing and reporting of fiscal transactions to governments is also required.

Invoiceware offers a proprietary Compliance Network–a hybrid cloud platform—that delivers financial and supply chain managers the regulatory processes that they need while eliminating ERP configurations and customization’s for IT staff. A single connection to their network simplifies the mandates, implementation and ongoing change management associated with regulations in Latin America, including Brazil Nota Fiscal, Mexico CFDI, Argentina AFIP, Chilean DTE, and Ecuador.

Vendors like SYNCHRO and Invoiceware ensure that despite evolving tax requirements, businesses always have total compliance with defined norms, that there is online integration with government tax authorities, and complete integration with the ERP system being used.

Keep in mind in most major countries in Latin America E-invoicing is mandatory – if you want to do business in these countries, you will need to comply with the process for all invoices sent to customers or received from business partners. Additionally, all business processes are touched and affected from finance, to accounts receivable and payable, to shipping and logistics. In some countries, regulations are also starting to impact HR and payroll. Businesses will have to have a real-time, integrated process to address government demands—it’s more than just having a digital signature. Typically for invoices to be valid they must be in XML format; paper and PDF formats won’t cut it.

This is just another example of how governments and businesses are being shaped and transformed via the power of technology. While I’ve just identified two of the primary players vying for business in this market, there are others and I expect even more to join in as governments come under pressure to monitor and ensure tax compliance. Latin America has the ball rolling but don’t expect the momentum to stop there.

Until next time..

 

Note:  Opinions are my own and do not constitute Gartner’s consensus position on any of the above topics addressed.

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1 Comment

  • Great Article Anderson!
    E-invoicing and Factura Electrónica transforming firms, processes, and others.