In this article, I focus more on the issues faced with Nota Fiscal for Services when looking at the compliance tasks from an Account Payables point of view. Remember that Service invoices are handled much differently than invoices for goods. Here is a quick overview for background:
NF-e for Goods vs NFS-e for Services
Goods Oriented NFE
- Taxes assigned at State level, so much higher adoption and standardization
- Digitally signed by emitter for non-repudiation and authentication to receiver
- Electronic file is the legal invoice – paper visualizations for human comfort only
- Invoices must be registered and approved before being sent
- Printed DANFE must accompany goods in transit for validation en route
- Inbound invoices must be validated and there are new "Eventos" processes taking place to eliminate ghost transactions.
- Archive for 5 years by sender
Service Oriented NFS
- Tax is assessed by Cities, so Integration Points are at City Level
- Standardization came slowly but is advancing now (ABRASF followed by 50 cities, Sao Paulo migrating)
- Can have many line items, but only one type of service per NFS.
- Can deliver services and then invoice later, this is not a problem.
- Can be withholding requirements for certain service types
- NFS number and Return Code provided by the
- City calculates the tax for you – you make FI adjustments if needed.
- City does the validation, buyer doesn’t have to worry about anything, except withholding, if applicable
- Cancellations allowed within 30 days or 5 days after start of new month, whichever is earlier
- Archive for 5 years by city
3 Types of Inbound City Level Connectivity
- Fully Integrated Web Service - there are a number of cities that offer a fully functioning web service integration. This allows companies to use the web service to call the city system and download their service invoices directly into their environment.
- Partially Automated -- there are a larger majority of cities that utilize this process currently. While they use a standardized format for the invoice collection, the actuall triggering event is manual. Many of the customers' I work with will deploy a special ABAP extension that allows them to upload the invoice files directly into an SAP staging area for further processing.
- Manually - it is important to understand when working with city level integration that many of them are still in a manual mode. There won't be a complete way to automate these cities.
Best Practice: If you are looking to process inbound service invoices, you should work with a provider that not only understands the current city connectivity options and has many of the larger cities already built; you also need to understand which cities will be producing the invoices.