In the upcoming 18 months, a minor storm of activity is expected. Moreover, despite the fact that it is hurricane season, I am not referring to the wind and rain. I’m talking about the switch from CFD to CFDI for compliance with Mexico eInvoicing.

Many businesses have CFDI deadlines in December 2012 and the beginning of Q1 2013. However, a lot of businesses are taking too long to respond to project needs. For the controllers in charge of the books in Mexico, this will be a costly error and a possible audit risk. Keep in mind that the Mexican SAT treats breaking the law as a crime that carries both fines and jail time as penalties.

The problem is that many organisations, not just them, will need to make the shift to CFDI, which is something that most businesses are unaware of. Less than 10% of invoices, according to industry estimates, have been converted to CFDI. Over 90% of the volume is now left for future transitions. Keeping the following in mind as you begin to speed your evaluation

• A PAC is insufficient. PACs are permitted to sign on behalf of the executive branch. However, it only makes up 15% of the burden for a SAP user. The real-time process changes necessitate a significant amount of SAP configuration.
• Waiting could result in you being out of compliance, which carries penalties and jail time.
• For outgoing factura, the CFDI process is a real-time procedure. This means that, similar to Brazil, the invoice must be approved before your items may be shipped.
• Inbound Validation IS required. The SAT makes it extremely obvious for CFDI that you must validate the inbound invoice if you are deducting taxes (i.e., paying your taxes on the net and deducting the taxes you pay your suppliers from what you charge your customers).

Government demands and procrastination don’t go together. Make sure your financial teams are aware of the migration timelines, and get your IT specialists to put together a project strategy and SAP appraisal as soon as possible.