CEOCFO Interview with Scott Lewin: Electronic Invoicing for Latin American Multinationals

May 5, 2014

Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – May 5, 2014

 

CEOCFOlogoCEOCFOMr. Lewin, what is the concept at Invoiceware International?

Mr. Lewin: Invoiceware focuses on helping multinationals comply with complex financial and tax regulations across Latin America. Latin America has very unique requirements when it comes to electronic invoicing and we help large companies that operate across the region manage these issues.

 

CEOCFO: What is an example of what might be required in a country that might seem odd to us here in the US?

Mr. Lewin: In Brazil, every invoice that is issued must first pass through government registration before your goods can be shipped; in addition, before you can pay an invoice, you must send it to the government for validation. Only then, can you pay the invoice and legally deduct the VAT taxes on your remittances. Imagine every transaction, sale and payment has a real time intermediate stop at the government. The tax authority wants to know the value of every good sold and every payment made to ensure those match the correct tax liabilities. It is a very different system than in the US or Europe and the regulations change quite frequently, so it is a big challenge for large organizations to comply with this regulation and the consequences of non-compliance are severe. Penalties include shutting down your operations for days at a time to significant penalties that can range into the millions.

 

CEOCFO: How do you step? What are you actually doing in your service?

Mr. Lewin: We have a compliance platform that uses a hybrid cloud architecture, which means we provide technology that sits at our customer’s site as well as a network in the cloud that is integrated to all of the government tax agencies across Brazil, Mexico, Argentina and Chile. When a company issues an invoice, it passes through our technology within our customer’s infrastructure and then is transferred to our cloud, which then manages the interaction with the government agency and brings back that document into our customer’s ERP system. We are the only solution that manages the entire process from within the customer’s ERP, to the government and then back again.

 

CEOCFO: Have companies tried to do it themselves and then turn to you or are they proactive in reaching out?

Mr. Lewin: Depending upon the country, the requirement has either been around for several years or is a new requirement. For example, in Brazil, this requirement has been around for several years and in Chile it is being implemented this year. Government validated electronic invoices are a mandatory requirement, so companies that are doing business in Brazil have had to comply with this regulation and they have had very large difficulties because of the complexity and the constant change. Often they are coming to us when they have significant issues with their current solution or when the regulations change, which typically impacts their ERP quite a bit. They take the required changes as an opportunity to look at a more cost effective alternative. Invoiceware shields their ERP from these constant changes and can reduce their annual support costs by up to 80%. Companies are also realizing that if they don’t manage these processes properly, they open themselves up to very large risks. The news is filled with companies that have paid massive fines under the Foreign Corrupt Practices Act (FCPA) for not having complete oversight on the LATAM operations. For all of these reasons, we have 200+ multinationals using our Invoiceware platform across Latin America.

 

CEOCFO: Are there competitors?

Mr. Lewin: It is quite interesting. There are competitors but typically, they are local competitors only working in one country. In addition, these local solutions are very difficult to integrate into the ERP and require large amounts of consulting. A multinational will often have one partner in Brazil, a different in Mexico, a different one in Argentina and internal IT staff to implement, monitor and support and so on. That is a very large management issue for them and they get no economies a scale across the region. We are the only solution provider that that combines on-premise ERP extensions to manage the customizations and integration requirements with a cloud based network that offers compliance across the region. This hybrid cloud architecture is the only way to simplify and reduce the cost of compliance in Latin America.

 

To read more of this interview, please follow this link

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