Today, May 31, 2013, the Mexico SAT, their governmental tax agency, announced the mandatory transition of all invoices, for companies generating more than 250,000 pesos in revenue annually, to an electronic process known as CFDI. With nearly 500,000 organizations potentially having to switch by the end of 2013, there will be a mad rush to identify resources and solutions through the summer of 2013. You should have a team focused on solving these issues no later than July 1, 2013.
It is now more critical than ever to make sure that you have a strategy in place in order to stay compliant and avoid costly fines. Being able to quickly change and adapt your ERP system and business processes to meet these mandates is a costly and time consuming operation.
Unfortunately, most organizations are not prepared for the upcoming changes and will underestimate the work load involved in meeting these new mandates.
Four Things You Need to Know:
- DON’T WAIT – there are literally hundreds of thousands of organizations that will need to comply and a limited number of vendors to meet the requirements.
- THIS IS NOT A TRIVIAL PROJECT: the legislation and required business processes will affect your ability to ship, your ability to collect money from your customers, and your ability to legally file your taxes in Mexico.
- VENDOR SELECTION IS KEY: As the project will affect your ERP system, ensure your vendor understands the process, has knowledge of the ERP system, provides an end to end solution, and speaks both Spanish and English natively – or you might find yourself in a never ending project.
- BOTH AP AND AR ARE REQUIRED: The legislation for CFDI requires both the production of electronic invoices when you are the supplier sending to an end customer (Accounts Receivable) and when you are the buyer receiving invoices from your supplier (Accounts Payable). Both processes have their own legal and technical requirements.
I will have further commentary as we breakdown the details of process changes, but fundamentally this is a major move affecting most companies doing business in Mexico.