In my last post, we discussed the key issues facing SAP accounts as the Mexico government continues to implement and push the usage of CFDI. I wanted to expand upon the potential issues facing Procurement and Accounts Payable users and managers as I feel it is an underestimated issue.
As discussed, 90% of invoices in Mexico today fall under the legacy regime of CFD which has a completely different XML schema and business process. And today, many companies will use manual data entry to comply with the inbound validations which are mandatory. Remember, the government announced on Dec 28, 2012 that the validated XML structure of the CFDI must be archived for a period of at least 5 years. And this XML will be used as the single version of the truth for auditors when reviewing VAT tax discrepancies. So here lies the problem -- an organization could see the inbound CFDI volume double if not triple. There is no way that manual processes will be able to keep up with the increased load so automation is going to be necessary. Here are some recommendations in the short term for AP managers or Shared Service managers looking at Mexico eInvoicing.
- Ensure you’re compliant with the Dec. 28 2012 legislation for XML validation and archiving today. Many companies are not doing this process properly, and you need to be sure to get compliant regardless of CBB, CFD or CFDI invoices.
- Understand the volume of CFD versus CFDI you are receiving today and will be
receiving in the future as the government changes.
- Understand how you are proving validations of the inbound documents - many PACs in Mexico still have very basic validations that don't cover all requirements.
- Go beyond the "okay to deduct" which is the government validations of the comprobante and look into the "okay to pay" processes which will ultimately streamline your Inbound Receiving and Payables process. There is what you have to do, and then there is what you can be doing from the government mandates to streamline your operations.
- Speak with vendors that specialize in Latin America eInvoicing and specifically the SAP system -- most Shared Services or SAP end users are moving to single instances or regional instances of the ERP system -- you need to know the effects of the changes on your AP process.