In 2014, the Administración Federal de Ingresos Públicos (AFIP) mandated electronic invoicing for all companies doing business in Argentina. Although a few extensions were granted to particular industries and corporations, those extensions expired, and all companies were expected to be fully compliant by July 2015. At the time, many Latin American countries were mandating similar electronic invoicing requirements, resulting in many multinational companies scrambling to meet the deadline.
For many obvious reasons, including Argentina’s position as one of Latin America’s strongest economies with accelerating global GDP, non-compliance with AFIP’s complicated and difficult-to-navigate tax regulations was never an option for these corporations. Not only were sales at risk, but the reputations of affected multinational corporations as well. To continue doing business in this high-growth, high-opportunity country, adoption of AFIP mandates often hastened decisions.
Wary of non-compliance, a looming deadline, and being unable to properly get a handle on the complex and wide-reaching AFIP mandates, many large-scale multinationals moved their Argentinian reporting off-line. This strategy effectively isolated the ‘mess’ of new regulations and requirements from their existing enterprise resource planning (ERP) system. Believing that this short-sighted strategy safeguarded their broader ERP, saved money, and avoided disruptions that could occur during a sloppy integration (let alone a completely faulty implementation), the avoidance decision ultimately created a dual system.
However, this ‘dual system’ solution fails on several fundamental levels. Primarily, it is a temporary, tunnel- vision measure. For reputable companies whose long-term operations include Latin America, and Argentina in particular, ERP integration must happen sooner or later, and delaying the implementation project adds its own element of complication. Also, not only do the resources required to manage this dual system strip efficiency from other businesses and channels, but ignorance could increase costs if left unaddressed for too long. Worse, if this ‘dual system’ is improperly managed, corporations risk non-compliance with the local authorities, or AFIP, in this instance.
Understanding the Scope of AFIP Tax Complexities
Doing business in a Latin American country like Argentina means complying with all pertinent AFIP regulations. Unfortunately for many multinationals, those regulations are complicated and misunderstood as those regulations reach beyond the electronic invoicing requirement. The scope of AFIP’s regulatory complexities underlines how a dual system cannot be a permanent, long-term solution in an ever-evolving economy like Argentina’s.
To illustrate those complexities, the AFIP mandates that companies operating in Argentina produce various pre- printed invoice formats (Type A, Type B, Type E), maintaining specific legal ledgers depending on the transaction, producing various withholding tax reports and certificates, maintaining an acceptable inventory card, as well as compliance with a host of other accounting, taxation, and legal requirements. Most ‘out-of-the- box’ ERP solutions cannot satisfy these requirements, which could be another reason why several multinationals opted for a dual system while they came to grips with the intricacies of the AFIP requirements.
What many multinational corporations have discovered in this process is that many Latin American service providers exist that hold certification from local tax authorities. These certified providers can help tackle part of the requirements. But the next discovery is that even these specialized service providers can only offer partial AFIP compliance, and integration with an existing ERP is troublesome.
And, equally important, bringing these specialized providers together onto a single platform, such as onto an existing ERP, proves costly and challenging (i.e. disruptive, the very thing the affected multinationals wanted to with their dual system strategy in the first place).
For example, a company like COMFIAR is certified by Argentinian tax authorities. It supplies over 40 million compliant invoices per year and its reputation names it as the leader in this space across many Latin American countries. For multinationals doing business in Argentina, COMFIAR is considered an essential service. But integrating their electronic invoicing solution into an existing ERP requires added specialization and localization knowledge.
Speaking of the ERP space, a global company like Oracle-NetSuite that offers a fully scalable solution with cloud capabilities might offer all the bells and whistles to satisfy domestic reporting, tax, legal and accounting requirements, but without COMFIAR integration, it’s inadequate in Latin American countries like Argentina. While its in-house electronic invoicing works domestically in the United States, Australia, the UK, or elsewhere, it is non-compliant in Argentina.
Oracle-NetSuite’s Robust Flexibility Plus COMFIAR Integration
When Oracle purchased NetSuite in 2016, its primary aim wasn’t to gain market share through NetSuite’s 40,000 customer base (at the time, its next-closest competitor commanded a tenth of that client list). Rather, Oracle aimed to own NetSuite’s leading, cloud-based solution. With a 99% satisfaction rating, NetSuite’s solution was not only solid but built from the ground-up specifically as a cloud-based application, and had a healthy head start over others.
So strong was NetSuite’s reputation in the market that Oracle adopted its name into its own, and for a good reason: it established Oracle-NetSuite as the most robust and flexible cloud-based ERP in the world.
However, even as a solution that appeals to businesses of all sizes in every corner of the globe, Oracle-NetSuite cannot, by itself, provide a full-service solution for multinational companies operating in Latin America, and Argentina in particular.
Likewise, while COMFIAR offers a demonstrated and respected electronic invoicing solution, it lacks the integration needed to take advantage of the reporting power that an ERP like Oracle-NetSuite offers.
To properly integrate these two leading systems in a way that satisfies AFIP requirements as well as corporate stakeholders, multinational companies are turning to a built for NetSuite solution deployed by LatamReady.
Based in Miami, LatamReady is a software-defined networking (SDN) and Implementation Partner to Oracle- NetSuite and has been developing localizations since 2009.
ERP Implementation Facilitated in Argentina by LatamReady
As the leading Oracle-NetSuite provider in Latin America, LatamReady is more than capable when it comes to understanding the nuances of AFIP requirements and delivering a solution that meets localized tax and legal requirements. Moreover, their LatamReady SuiteApp connects Oracle-NetSuite and COMFIAR to ensure a company’s ERP is fully functional to the satisfaction of all stakeholders and AFIP alike.
For multinational corporations already using Oracle-NetSuite’s ERP, they can understand and appreciate the practical features and benefits that a certified Built-For-NetSuite solution offers.
Insofar as implementation with Oracle-NetSuite, LatamReady SuiteApp works natively into the ERP, with one key differentiator: the app brings localization support to the software while also making it compliant with AFIP mandates and regulations. That means a cleaner reporting environment and no more dual systems.
Oracle-NetSuite: the Number One Cloud ERP Option Among Multinationals
When it comes to multi-Latin ERP implementation, Oracle-NetSuite delivers on several fronts beyond its pioneering SaaS model for ERP. As a scalable solution for all types and sizes of businesses, Oracle-NetSuite can be expanded through SuiteApp products. For example, a former, domestic-only company that expands into Latin America will need to acquire the LatamReady SuiteApp to comply with AFIP requirements.
Additional reasons for Oracle-NetSuite’s lead in the market extends to its native electronic invoicing facility called NetSuite Electronic Invoicing SuiteApp technology. When integrated with LatamReady SuiteApp, the first SuiteApp to use NetSuite Electronic Invoicing technology, Oracle-NetSuite communicates seamlessly with local suppliers, like COMFIAR. What’s more is that the SuiteApp operates natively, within the ERP and not as an add-on. These features make Oracle-NetSuite a top choice, by a large margin, for US and International clients working in the Latin America region, and Argentina specifically, and strengthens LatamReady’s position as the top vendor for localization and electronic invoice implementation.
Comprehensive Argentinian Localization
- CUIT (Tax ID) validation in Customers and Suppliers registers
- Local transaction types and information required to produce legal ledgers required by AFIP
- Four legal ledgers:
- IVA de Compras (TXT formal)
- IVA de Ventas (TXT format)
- Libro Diario
- Libro de Inventario y Balance (Annual)
- Withholding Taxes management applied to Sales IVA (VAT) and Purchases IVA and “Honorarios” (a Type of Bill used when a supplier is a person and not a company)
- Withholding Tax Certificates
- Automatization for Perceptions on Sales
- Publication of Perceptions and withholding records (ARBA txt file where all CUITs are shown indicating its corresponding current perception and withholding percentage)
- Electronic Local Invoicing templates via COMFIAR Argentina (NetSuite e-Invoicing module is required). COMFIAR Argentina is the local electronic invoicing supplier connected directly to NetSuite). This feature includes 3 types of e-documents:
- Invoice (Sub-Types: A, B, and Foreign Customers)
- Credit memo (Sub-Types: A, B)
- Debit memo (Sub-Types: A, B)
- Pre-printed formats, which is required by local Tax Agencies
- Printed Waybills format is supported (Remito)
- Inventory “Kárdex” report
- English or Spanish implementation and localization support
Without the LatamReady SuiteApp, Oracle-NetSuite lacks these necessary, fully compliant features on its own. Further, LatamReady SuiteApp implementation provides tax and legal compliance with more than ten Latin America countries and also comes with legal and new features updates.
LatamReady Considerations when Conducting Business in Argentina
Integrating LatamReady SuiteApp raises several relevant considerations:
- Chart of Accounts. While the use of a Statutory Chart of Accounts (COA) isn’t required by the Argentinian authorities, if the company opts for an Argentinian-specific COA, NetSuite’s Multi-Booking feature must be enabled.
- Legal Ledgers. Most Latin American countries are transitioning exclusively to electronic versions of legal ledgers. LatamReady ledgers can be downloaded in CSV format.
- Average Costing. Latin America financial reporting standards require the use of Average Costing for the determination of cost. When Oracle-NetSuite is LatamReady configured, companies are required to transact using Average Costing.
Expertise Backed by Execution
As the first and only Built for NetSuite solution for LatAm, LatamReady has developed localizations for multinationals operating in Latin America since 2009. With the LatamReady SuiteApp installed within Oracle-NetSuite, companies can move away from a dual system strategy, deploy resources appropriately, and ensure compliance with the electronic invoicing mandates.
LatamReady has performed localization implementation for multinationals doing business in most other Latin American countries. In fact, government authorities in Chile, Colombia, Ecuador, Mexico, Peru and Uruguay have also mandated similar electronic invoicing requirements like those in place in Argentina since 2015. Given LatamReady’s breadth of experience and its proven track record in helping multinational companies do business in LatAm countries, the LatamReady SuiteApp is not only the leader in localizations but electronic invoice implementation within Oracle-NetSuite.