Mexico CFDI e-invoicing: Wildfire vs Fusion

Spend Matters welcomes a guest post from Christian Lanng, CEO and co-founder of Tradeshift.

Not all viral effects are born equal. With its new mandatory CDFI legislation, Mexico has set off a catalyst that next year will send a whole economy electronic. But back in 2007, when I led the project of the Danish e-invoicing tool, EasyTrade, it was a different story.

When we were designing a better way for the government to manage interactions with suppliers, we knew that the immediate impact would be upon one layer of businesses - those we directly worked with. But because we stuck to the principles of making it free and open (even open source), the impact spread from business to business as awareness grew of the advantages it offered.

The initial layer of businesses surrounding us acted like kindling, ignited by our initial legislation and the promise of an easier way of doing things. And then, as they adopted it as a standard way of working, they converted their own surrounding businesses to the layer too. And those companies did the same.

Before long, this quickly multiplying web of progress had engulfed the whole country. After a short transition period, including time for other software and service providers to integrate the standard, the law became mandatory and Denmark became one of the fullest, truest pioneers in the e-invoicing space.

And the fact is, it did take a little time for this effect to roll through the network. Back then, nearly 7 years ago, it was revolutionary. But progress marches on.

If our still reasonably impressive and effective efforts all those years ago were like a spreading wildfire, Mexico’s CFDI einvoicing mandate could be considered more like a progressive atom bomb. When the clock strikes midnight on December 31st, 2013, every single company doing over $20k turnover will have to be ready and able to exchange documents electronically.

Of course, the challenge is easy to see - that deadline is barely six months away and for some companies, this process has the potential to be a considerable draw on resource. As the shockwave surges across the country, including knock-on effects for companies who deal with native Mexican organisations, businesses will want to make sure they’re ahead of the curve and not caught out dealing with the fallout. This is a time-critical exercise.

The fact is that more and more transitions are likely to adopt this model, especially if it shows the kind of remarkable results that are forecast. Companies can make it easier on themselves by being prepared - moving to a platform that is built around open standards and interoperability with initiatives like this may give them the ultimate advantage.

Again, it’s testament to the importance of picking the right platform and the right partner. Picking one that has the best relationships in every region and the flexibility to integrate with the right service providers for you. And it shows once again that an approach based on open standards is the best choice not only for today, but also for whatever challenges you may need to tackle in the future.

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