In 2013, the Mexican Congress approved a series of tax code modifications that included the requirement for organizations to file accounting records via electronic media. As of January 2014, the use of electronic invoices became mandatory for organizations generating more than 250 000 pesos annually under the CFDI (Comprobante Fiscal Digital por Internet) – the electronic billing system defined by the Mexican federal code. The accounting records required by this code demand substantial information, further complicated by ongoing resolutions passed by the Tax Administration Service. This poses a particular problem for multinationals in Mexico.
LatamReady, when integrated with Oracle’s NetSuite essentially solves this problem. It provides a seamless, cloud-based platform for electronic invoicing that overcomes the onerous e-invoicing that the government requires. Legal and tax compliance is greatly simplified, saving companies significant time and effort.
The challenge for multinationals in Latin America
Mexico has become a key region for foreign direct investment (FDI), with USD 26 billion flowing into the country in 2016, and according to the World Investment Report, Mexico is the world’s fifteenth largest FDI recipient.
Investment mostly comes from North America and Europe with the bulk of FDI directed towards the finance, automobile, electronics and energy sectors. In addition to these multinationals, 500 of the largest Latin American enterprises also have a presence in Mexico.
As multinationals continue to set up operations and expand in Mexico, they are met with challenging legislation that is now characteristic of most Latin American countries. Enterprise Resource Planning (ERP) software becomes an essential requirement to navigate the complex invoicing and tax dictates of the region, where compliance rules differ from country to country and change from time to time.
The gold standard in ERP
Oracle’s NetSuite is the world’s most deployed Cloud ERP solution, used by more than 40 000 companies and organizations across the globe. The LatamReady SuiteApp works 100% natively within NetSuite and is constantly updated to address the changing demands of legal compliance.
LatamReady has extensive experience in Latin America, having implemented the LatamReady SuiteApp since 2009. Certified by NetSuite, implementation and support services are provided in English as well as Spanish. It is also the only localized solution technically certified by Oracle-NetSuite for Latin America as part of the “Built For NetSuite” program.
A wide variety of industries uses this platform, some of which include: Software/Internet Companies, Wholesale Distribution, Advertising and Digital Marketing Agencies, Media and Publishing, Financial Services, Healthcare, Non-profits, Retail, Manufacturing, IT Services, Professional Services, Consulting, Energy, and Education.
In 2013, NetSuite received PC Magazine’s “Editor’s Choice” award because of its: “…exceptional breadth, depth, and usability.” Finances Online gave NetSuite’s cloud ERP software a 99% customer satisfaction rating, particularly highlighting its seamless assimilation with other programs and the smooth integration with finance, sales, and invoicing.
NetSuite is the leader in cloud-based ERP
The trend today is for businesses to upgrade from local servers to cloud computing which is safer, less cumbersome, more productive and provides significant financial benefits regarding cost savings and profits. Recent surveys revealed that 88% of cloud users found that adopting cloud computing had resulted in significant savings, and 56% of companies surveyed saw an increase in profits. In addition to offering industry-specific functionality, NetSuite’s cloud ERP was built from the ground up for cloud-based computing, resulting in lower implementation costs and enhanced ease-of-use.
NetSuite Cloud solutions offer real-time access to live financial data, allowing for additions and addenda to be implemented more easily, resolving delays more timeously and generating compliance documents more quickly.
A seamless solution
Because LatamReady is totally native to Netsuite, the interaction between the two is seamless and uses one key for a host of Latin American countries in addition to Mexico, including Argentina, Bolivia, Chile, Colombia, Ecuador, El Salvador, Panama, Paraguay, and Uruguay.
The key features available include:
- e-Invoicing templates via the NetSuite e-Invoicing SuitApp,
- Withholding tax features with the NetSuite Withholding Tax SuiteApp,
- e-Payment templates via the Netsuite Electronic Payments SuiteApp, and
- Taxes that sync with standard NetSuite tax definitions.
Electronic reporting in Mexico
The Mexican Tax Agency (SAT) requires reports to be declared electronically every month according to a specific format that the LatamReady SuiteApp produces. Also, specific fields, validations, and file formats have been added to generate Auxiliar Cuentas y SubCuentas, Balanza de Comprobación, Catálogo de Cuentas, Pólizas Contables y and the DIOT declaration form.
The sales tax rule Translado de IVA is a posting rule required by SAT for them to be informed of two sales tax statuses: billed/registered or collected/paid. This particular accounting rule required in sales and purchase transactions is automated monthly with LatamReady SuiteApp generating them directly in NetSuite.
Reclasificatión de Cuentas de Ventas is a posting rule mandated by SAT for control of payment terms (cash or credit), taxes applied and type of customer (domestic or foreign). In the LatamReady SuiteApp, this is automated monthly and processed directly in NetSuite.
Mexico SAT rules
Contabilidad Electronica (electronic accounting) applies to the chart of accounts, trial balances and journal entries which need to be linked to government CFDI XML approval codes known as UUID (universally unique identifiers). XML (extensible markup language) is the required format for electronic invoices, and the UUID is an alphanumeric number made up of 36 characters that denote the fiscal folio of the transaction.
The government only deals with XML during an audit, so all supplier XML’s must be collected, validated and archived. In addition, all payroll receipts must be validated before tax can be deducted – a requirement that is retroactive from January 2014.
All companies are mandated to incorporate a new ‘complemento’ (additional information) for foreign trade CFDI’s. This requirement applies to foreign trade transactions which SAT classifies as final exports. The NetSuite SuiteApp includes a mapping tool to link the customer’s accounts to Mexican legal classification of accounts. The COA (chart of accounts) is not statutory in Mexico and in Latin America, the legally required form of costing is average costing, and the subsidiaries configured in NetSuite are required to transact using this form of costing.
Lexicon of compliance terms for e-Invoicing and e-Accounting
Below are some common terms used for compliance in Mexico:
Amparo: Constitutional defense granted by the government to companies wanting to delay the electronic accounting legislation.
Buzón Tributario: The online communication service to share digital documents with the authorities.
Comprobante Fiscal Digital por Internet (CFDI): the electronic billing system defined by the federal tax code.
Cadena Original: Data that contains information in the CFDI.
Carte Porta: Bill of lading
COA: Chart of accounts
Código de Barra Bidimensional QR: The 2D bar code (formatted under the QR Code described in ISO/IEC18004 standard).
DIOT (Declaración Informativa de Operaciones con Terceros): The DIOT includes information about vendor transactions, providing data about the status of sales tax transactions.
eContabilidad or Contabilidad Electrónica: The required electronic accounting reports for the chart of accounts, trial balances and journal entries which need to be linked to government CFDI XML-approval UUID codes.
FIEL (Firma Electrónica Avanzada): Electronic signature certificate to authenticate the taxpayer.
MIRO/MIGO automation: Three-way match that guarantees that the purchase order, goods receipt and supplier invoices match.
Nomina Electrónica: Electronic payroll receipts that need to be validated before deducting taxes.
PAC (Authorized Certification Provider): A provider capable of producing the Timbre Fiscal.
Pedimento: The import number that must be applied to all invoices.
RFC (Registro Federal de Contribuyentes): Tax identification number
SAT (Servicio de Administracón Tributaria): The Mexican federal tax administration.
Sello Digital Certificado: Stamp used to validate the origin of the electronic invoice.
Timbre Fiscal: The process of assigning the UUID folio and the digital signature when the electronic invoice is generated.
The LatamReady advantage
Beginning in 2009, LatamReady SuitApp became the leading application for NetSuite in Latin America. The company’s knowledge of regulations and experience working with local business owners has played a large part in the success of LatamReady integration.
LatamReady has already facilitated successful implementation in over 70 companies from a variety of industries and continues to bring this expertise in implementation to Mexico as well as Argentina, Bolivia, Chile, Colombia, Ecuador, El Salvador, Panama, Paraguay, Peru, and Uruguay.
LatamReady SuiteApp for NetSuite allows for the transmission of electronic invoices with the ability to use a pre-built connection to Solucion Factible, a local e-Invoicing Supplier seamless from NetSuite. It enables companies to comply with the requirements related to electronic invoice processing. It increases efficiency and decreases costs associated with existing invoice processing methodologies. It is automated, resulting in faster payments, fewer rejected invoices, automated order-to-cash processes and the commensurate savings that come with converting from a paper-based system.
LatamReady works seamlessly inside NetSuite, allowing multinationals in Mexico and most Latin American countries to implement effective ERP in a cloud-based system. LatamReady has years of experience in Latin America, working with multinationals from countries such as the United States, UK and Australia. As more organizations in Latin America require their industries to move to electronic invoicing, LatamReady’s ability to work with local industry leaders together with the efficient invoicing abilities of the software makes it the preferred choice for integrating electronic invoices for multinationals seeking to meet government regulations.
NetSuite is #1 in cloud ERP, and LatamReady is the #1 NetSuite option for a US+multi-Latin NetSuite implementation. And with local support in English and Spanish, LatamReady for NetSuite is the LatAm localizations obvious choice.