How one technical solution enables companies in Brazil to comply with new regulations and save time.
A shift to automated electronic invoicing in Brazil has produced unexpected efficiencies in a complicated process, according to Germany-based SAP, the world’s largest business software producer.
SAP launched software for companies to comply with Brazil’s Nota Fiscal Eletronica two years ago. The Brazilian government had instituted a gradual roll-out of compliance deadlines, by industry, and the rules apply to every domestic sale and every domestic shipment of goods or materials. Smaller companies are exempt from the electronic requirement.
Two years after the launch, with all industries now covered, SAP has about 300 customers actively using the systems, says Michael Depner, vice president of globalization services for SAP Labs Latin America.
SAP did a case study with one of those customers, Robert Bosch Ltda., an automotive supplier. The old manual system took about eight minutes to process, but the automated software cut that to just one minute.
The original trigger to implement the software was the legal requirement, with the time savings an added benefit, Depner says. In addition, “it is more accurate because you avoid errors of human intervention.”
In the case of Bosch, the shift to electronic invoicing also has simplified handling returned materials or parts, all of which were formerly paper-driven processes.
SAP’s client base for the Nota Fiscal Eletronica product ranges from national industrial heavyweights, such as Petrobras and Vale, to major multinational consumer-products makers, such as Procter & Gamble, Depner says.
Brazil is unique in a region where three other countries have moved to electronic invoicing, Depner says.
“All the legal and fiscal requirements are integrated into one document. That makes Brazil so complex,” he says. “In Mexico, Argentina and Chile, the requirements are different but comparable.”
The stakes are high in Brazil. Every nota fiscal, or invoice, must be in the government-specified format, validated and sent to the Ministry of Finance (SEFAZ) for approval. If the address information does not match SEFAZ master data, that data must be corrected before an invoice can be issued. Crossgate, a business-to-business IT company in which SAP has a stake, worked with Kellogg Brasil in 2010 to clean its master data and be ready in all of six weeks.
On January 1, Mexico began to require that companies’ systems were integrated with the tax authorities for real-time approval of electronic invoices. As complex as Brazil requirements are, Mexico presents its own challenges, says Crossgate CEO Scott Lewin.
“Most companies we work with in Brazil have gone through the rigorous process of altering their ERP [Enterprise Resource Planning] systems and business processes by the time they come to us to integrate with the SEFAZ,” Lewin says. “In Mexico, all of these work streams are typically converging at the same time.”
Thus far, Crossgate has worked with 11 global companies to fulfill the Mexican requirements.
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