SAP Procure to Pay - AP Strategies

July 25, 2016 Karen Marchione

In Latin America – Inbound Validation of the XML is not an option, it is required. The process is required in Brazil for both Goods and Transportation via documents called CTe.  As of December 2012, the same holds true for Mexico. Chile will be mandating the usage of electronic invoicing as of November 1, 2014 – so inbound validations will be required there as well.

When looking at the inbound process, consider the following:

Use XML to Reduce Costs – If you are processing over 500 inbound XML a month – you should consider automation to reduce the cost of:

Account Payable – Focus the AP staff on exceptions, so you avoid VAT remittance issues and help the receiving teams.

Inbound Receiving – You can utilize the PDF representation of the XML that must accompany the supplier trucks to eliminate data entry and fully automate the MIGO and MIRO in SAP.

Avoid Production Risk – Because of the tax impact, in many industries – companies will not allow a truck through their gates unless the XML is valid. It can be a common occurrence to turn the truck around. With automation – the PO match to the commercial terms could be done before the truck arrives.

Reduce Manual Checks to Lower Closing Costs - Without inbound automation your financial teams are constantly reviewing data at closing to ensure everything is correct. In countries where they aggregated reporting (i.e. SPED in Brazil or Libros in Chile), you cannot afford to have discrepancies – this will trigger an audit.

Incorrect Tax Obligations - In Chile for example, a buyer has 8 days to accept or refute a supplier invoice for accuracy.  After 8 days, it is automatically assumed that the invoice is correct and has been accepted. After this point, the only recourse to correct is to have a supplier register a Credit/Debit against the original invoice.

Cancellations – In Brazil, it is often stated that the invoice from a supplier can be canceled within 24 hours. The reality is that it can be upwards of 7 days. That being said - are you doing secondary checks to ensure you are not deducting taxes from invoices that have been cancelled by suppliers?  The Destinatario process in Brazil actually freezes a supplier invoice once the recipient acknowledgement is sent and the supplier can no longer cancel the invoice.

As you look at the Account Payable process, ensure you understand the entire business process. The process is so much more than just a digital signature. The Latin America model significantly affects logistics and tax compliance; what is registered is the only thing that matters.

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