Several countries in Latin America were early adopters of electronic invoicing solutions, with governments instituting e-invoicing regulations to prevent tax evasion. The 2016 e-invoicing report from Billentis points out how many Latin American countries now have considerably advanced e-invoicing markets. Mexico, specifically, is identified in the report as global leader for e-invoicing, with more than 5.4 million taxpayers issuing e-invoices for goods and services bought in the country.
We reached out to our e-invoicing expert in Mexico, Xavier Olivera, who serves as editor for Spend Matters Mexico and Latin America, to share his insights on the Mexican and Latin America e-invoicing market.
Spend Matters: Mexico is listed as an early adopter of e-invoicing solutions in the new Billentis report. When did you first see a major shift in Mexico to adopt e-invoicing solutions? And, what were some of the main drivers for companies in Mexico to switch to electronic invoicing?
Xavier Olivera: It was not the companies that started this trend in Latin America, it was the governments instituting e-invoicing systems for tax purposes and audit controls. This proved to be highly profitable for the Mexican government, and so other countries in Latin America and around the globe are replicating the effort.
Of course, the companies have benefited from these imposed regulations, too, and are now taking advantage of having invoices in electronic form, which makes processes more efficient, provides better analytics and brings higher savings.
SM: Was there a large learning curve for Mexican countries when they were first required to implement e-invoicing solutions? Do you recall specific pain points these companies had with adoption?
XO: Yes, the Mexican government established a deadline companies needed to implement the solutions by — a deadline that had to be extended several times to allow companies to prepare their IT systems for e-invoicing adoption. Also, the government had to prepare and certify the companies that now handle the e-invoicing stamps, which validates the invoices. Still, it was a very fast implementation for a country, lasting maybe a couple of years. The pain points were felt when companies were building new systems and preparing for these changes and incorporating the e-invoicing processes.
SM: The Billentis report points out e-invoicing has been implemented in Latin America to prevent tax evasion. Do you think e-invoicing has successfully reduced corruption in Mexico and other countries in Latin America?
XO: Yes. This is one of the key metrics, and the reason other countries are replicating this practice.
SM: What are some of the benefits e-invoicing has brought to Mexico and Latin America?
XO: For governments, it’s the benefit of tax evasion and an easier way to conduct audits and gather all the digital information needed to do them.
For companies using e-invoicing, there are the benefits of process efficiencies, stronger data and data analytics to drive greater savings and make better business decisions. Other benefits include easier integration between procurement processes and payables processes.
SM: Do you think e-invoicing adoption has been a success overall in Mexico and Latin America? Are companies and the government benefiting from the technology?
XO: Yes, it has been a great success, more so for the government than for the companies. I don't know if every company in the region is taking advantage of all the benefits the technology offers, or using the solutions to their full potential, however. I think some businesses still have some learning to do to realize the benefits e-invoicing can deliver to the company.
SM: Are there unique characteristics of e-invoicing solutions for the Mexican and Latin American market you can point out? The Billentis report points out some such as regular reporting to tax authorities in real time or on a monthly basis, imposed XML standards for tax authority clearance and the fact recipients have to validate an invoice was pre-approved by the tax administration. Are their other characteristics that make these solutions in this region unique?
XO: The Billentis report is correct that all invoices have to be created and stamped by a certified company to make the invoice valid for the government — something that comes at a cost to the companies. Businesses can, however, also complete this process directly through the tax government office at no cost. There is a standard process and rules all organizations need to follow in order to issue a valid e-invoice.
SM: What are some of the top or most popular e-invoicing solution providers in Mexico and Latin America?
XO: For global organizations with operations in Latin America, I think Invoiceware International and TrustWeaver are very popular. For more local companies in the region, OpenText is very popular for many.
SM: What e-invoicing lessons can other countries around the world learn from Mexico and Latin America?
XO: Each Latin American country has its own e-invoicing process, standards and regulations. However, the success the region has had in governments mandating the technology is something organizations throughout the world can use to implement e-invoicing and benefit from it.