Yesterday, I had an intriguing talk about Latin America eInvoicing with the CFO of a Fortune 500 company. And this time, the topic of discussion was not law, which is something I usually write or talk about. This week, the topic was the dangers of managing eInvoice compliance through local, non-integrated providers. Here are the main points from that dialogue that you should go through with your legal and global procurement teams before signing a contract with a vendor. There are always underlying problems that go above and beyond the demands of technology.

  • A portion of the value of your ERP system is lost if you implement a third-party solution in LATAM that is not fully connected with the business process. Now, the third-party system, which is inaccessible to corporate, serves as the foundation for government financial reporting.
  • Your system of record for operational eInvoice data to the government is no longer your SAP system. Without the monitoring and controls that you likely invested millions of dollars on inside of your ERP, all of the critical data needed for audits is now stored in a 3rd party technology.
  • How to verify that the data in the third-party database is accurate with your ERP system was a major problem, particularly when there are procedures that are linked but not integrated. For instance, you must cancel an invoice that has since been determined to be invalid in Mexico and Brazil. You must keep in mind to cancel the billing document after you have terminated the process in any third-party solutions that are not part of the ERP tables.
  • When attempting to close the books at the end of the month or the quarter, support difficulties or data problems may arise. Organizations must make sure they have strong assistance for the corporate IT and finance departments who must roll up international figures because there are severe government consequences for errors. Mission-critical for publicly traded corporations, this. The CFO gave an example of when they were unable to report $20,000,000 in invoiced revenue in LATAM because the eInvoicing technology malfunctioned and could not be fixed in time for the month’s end. For that month, the invoices were never processed.

In conclusion, Latin America eInvoicing is crucial and has an impact on your SAP deployments and worldwide financial operations. Make sure you comprehend how using non-integrated 3rd party solutions will affect your company. Otherwise, your financial reporting may be impacted by a lack of control brought on by linguistic difficulties, poor data quality, the use of another system of records other than SAP, and support concerns.

Conclusion: Global corporations should search for business-class solutions that are firmly connected with their ERP systems. Implementing, monitoring, and maintaining the process is challenging enough without having to manage three different systems at once: your ERP, a middleware interface layer, and a standalone compliance box.

A side note: If you’re going to the SAP Financials conference this week in Las Vegas. A link to my session is provided below: Session