In this conversation about governmental XML standards and compliance requirements, it should not be forgotten that the goal of an invoice, whether it be electronic or paper, is to get PAYMENT.
There are a few things you should know about the dissemination of the invoice because it is uncommon for the PAC to handle this function. It is more typical for them to ask you to do all of the work involved in producing the XML and the client specifics before passing it to them for signature, after which it is returned to you for printing, loading into a truck, and distributing to the end user. Make sure you cover all aspect of the jigsaw, including customer modifications and distribution, as a signature is just one little component.
The following information, which is frequently omitted with regard to the customer and ultimate distribution, is necessary to know: By law, you must make the government-approved invoice (CFDI with Timbre) available to your end customer.
1. The CFDI XML contains a unique section called an Addenda where an end buyer can ask for details to help them process the invoice. They are able to ask for this and include it in the XML. Your challenge will be that every one of your final clients can request:
a. A special Addendum (Edifact, embedded PO # in plain text, additional set of segments in XML)
b. Each customer may receive a different PDF output. Large customers frequently want something one way in the XML Addenda and another way in the PDF form, adding to the development and management challenges.
2. You must send your customer the XML invoice.
a. Occasionally, this is email.
b. Large purchasers frequently desire a B2B communication method, such as AS2 with Walmart, SFTP, or a Web Service.
Conclusion: Customer requests add to the process’s complexity. This has an impact on SAP master data, configuration, printing techniques, and most importantly, payment.
Customer Experience: It took three months to create with internal teams and now takes six weeks to integrate and test every time there is a change to the SAP system, a modification requested by a customer, or a change mandated by the government. Don’t undervalue the havoc that consumer details can cause.
Your client will confirm that invoice’s validity as an XML with the government before authorising payment.
1. The “Okay To Deduct” stage is the first issue level of checks that your customer will complete. They will verify that this is a CFDI that is legitimately registered with the SAT. Additionally, they will verify that the XML format is correct. Because they cannot use that XML to subtract the supplier component of the VAT from their remittance to the governments, customers won’t want to pay erroneous government invoices.
2. Following that, your customer will do a “Okay To Pay” commercial compliance check. They’ll probably make sure the taxes are accurate and that it matches the goods receipt and a purchase order at the line item level.
3. Important information: Your customer cannot amend an inaccurate invoice; they must inform you of the problem, and you, as the supplier, must either make the necessary adjustments with a registered credit note or debit note, or you must cancel the CFDI and register a new invoice entirely. Regardless, all of this will cause a delay in getting paid and lengthen your DSO. If this occurs for significant bills at the end of the month or quarter and your firm is publicly traded, it may have an impact on how revenue is recognised.
Takeaway: According to the December 28, 2013 resolutions, your customer is required by law to store your XML for 5 years after it is validated. Recognize the methods of payment and distribution in Mexico for CFDI. There are numerous little issues that can cause payment delays.
Customer feedback: The following issues have been brought up to me by clients:
- Because the invoice’s postal information was not supplied in the precise registered format with the Mexico Postal Service, the end client refused to pay. This was a problem with SAP Master Data.
- Due of problems with units of measurement, the final consumer refused to pay.
- Because they wanted the Surcharge added to the invoice, the end user refused to pay (problem is that the Mexico CFDI XML has no field for surcharge, this is called an Extended attribute and you must manage this)