SAP BusinessObjects Electronic

Invoicing for Brazil (NF-e)

Greg Ertel, Director, Solution Marketing SAP

Linda McKee, Director, Solution Management, SAP

Anil Mahendra, Vice President of Sales, Politec

October 13, 2011

© 2011 SAP AG. All rights reserved. 2

Agenda

Introductions

SAP in Brazil

Nota Fiscal Eletronica Background

SAP’s Electronic Invoicing for Brazil Solution

Scope

Functionality

Landscape

Roadmap

Implementing NF-e with Politec

SAP Relationship

Key Brazil Localization Topics

Critical Success Factors

Lessons Learned

© 2011 SAP AG. All rights reserved. 3

Introductions

Gregory Ertel

SAP

Linda McKee

SAP

Anil Mahendra

Politec

SAP in Brazil

© 2011 SAP AG. All rights reserved. 5

SAP BRAZIL

15 years in Brazil

656 employees and 48 trainees

Best enterprise solutions in 25 industry

segments

Indirect workforce of ~11,100 certified

consultants

1.5 million end-users

Strong ecosystem: 113 partners

(Integrators and Channels)

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SAP BRAZIL

2.700+ Customers

Large Small

Medium

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Some of our customers in Brazil

Nota Fiscal Eletronica

Background

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Why Nota Fiscal Eletronica?

Notal Fiscal Eletronica (NF-e) is part of the Digital Public Bookkeeping

System for Brazil, more commonly known as SPED. SPED consists of 3

main pillars:

Fiscal Accounting

SAP

Solutions:

Part of Decree No. 6.022 – Issued January 22, 2007

© 2011 SAP AG. All rights reserved. 10

What is Nota Fiscal Eletronica?

Companies selling products in Brazil must send each invoice electronically to

the government for validation before shipping their goods.

Companies purchasing goods in Brazil must check the electronic invoice at

the government before receiving the goods.

Bottom line: The government wants to be sure they are getting all of their tax

revenue.

Companies need to handle these activities with an automated solution that

can scale to high volumes of invoices and meet their business process

requirements.

SAP BusinessObjects Electronic

Invoicing for Brazil

or more commonly referred to as

Nota Fiscal Eletronica (NF-e)

SAP’s Electronic Invoicing

for Brazil Solution

© 2011 SAP AG. All rights reserved. 12

Where is Nota Fiscal Eletronica supported within SAP?

Strategy Management

Planning, Budgeting, and Forecasting

Profitability and Cost Management

Consolidation

Spend and Supply Chain

Enterprise Performance

Management

Reporting Interactive Analysis

Dashboards and Visualization

Data Exploration

Advanced Analytics

Business Intelligence

Risk Management

Access Control

Process Control Global Trade Services

Governance, Risk, and

Compliance

Data Integration Data Quality Management

Master Data Management

Metadata Management

Enterprise Information

Management

Environment, Health, and Safety Management

Sustainability Performance Management

Nota Fiscal Eletronica

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Reduced Manual Effort

Value Drivers

Reduced Integration Costs

Reduced Time and Effort During

Audits Reduced Supply Chain Delays

•Pre-built integration

between NFe and back-

end SAP ERP

•No custom tables

•Reduced risk during

changes/upgrades

•Stop shipments automatically if

outbound NFe not authorized

•Automate processes required to

check NFe’s from suppliers

•Automatically trigger creation of

inbound delivery for faster receiving

•Automate MIRO/MIGO

•Fewer errors with information

transferred automatically from XML

Country

Version

Brazil

© 2011 SAP AG. All rights reserved. 14

NFe Communication

Management

Status Monitoring

and Updates

Automated contingency

(SCAN)

Inbound

NF-e’s

Outbound

NF-e’s

Digital Signature and Validation

Batch Creation

Key features

Automated triggering of back-end transactions ABAP Digital signature service

“

PO Assignment

Invoice Simulation

Vendor Notification

Inbound Delivery Creation

DANFE Receipt

Quantity Validation

Trigger of Goods Receipt

and Invoice Creation

Digital Signature Check

Authorization

Validation

SAP’s Electronic Invoicing for Brazil (NF-e) - Automation and Compliance of Nota Fiscal Eletronica Processes

Automated handling of inbound NF-e’s Notification to Vendors electronically

Compliance with NFe regulations Automated issuance and management of outbound NF-e’s

We issue 15,000 to 16,000 invoices per month, reaching a peak of 500 to

1,000 per hour. All of them must be validated by SAP Business Objects

Electronic Invoicing, which responds perfectly to the demand Marcos Mazarin

IT Manager

Merck SA

© 2011 SAP AG. All rights reserved. 15

“Outbound” Nota Fiscal Eletronica – Tied To Sales Process

at a Company, Versions 1.0 and 10.0 of NF-e

Sales Order

Billing Document SEFAZ

Nota Fiscal

Eletronica Nota Fiscal

DANFE

Shipment

Company’s Localized ERP GRC NFe

XML

Government Systems

SCAN

Create XML

Digital Signature

Create Batches

Authorize, Reject, Deny NF-e

Status from Government

NF-e Status To ERP

Government System Status to

ERP

© 2011 SAP AG. All rights reserved. 16

“Inbound” Automation Nota Fiscal Eletronica – Tied To

Purchasing Process at a Company, Version 10.0 of NF-e

Purchase Order

G/R

SEFAZ

Nota Fiscal Eletronica

Invoice

DANFE

Company’s Localized ERP

GRC NFe

Government Systems

Supplier

XML

Sales Order

Nota

Fisca

l

Billing Document

Nota Fiscal Eletronica

Nota Fiscal

Check Authorization

Assign PO

Simulate Invoice

Create Inbound Delivery

Trigger Goods Receipt

Trigger Invoice Creation

Check for XML

Enter and Check Received

Quantities

Check Digital

Signature

Inbound

Delivery

PO Data

Nota Fiscal

Eletronica

© 2011 SAP AG. All rights reserved. 17

Highlight What it Does

Automation of Inbound Processing

Automate the handling of inbound NFe’s for Normal Purchases and

Stock Transfer Orders

Flexibly determine whether to automate or process steps manually

Trigger supporting back-end transactions

Vendor Notification Notify vendors electronically regarding status of their NFe messages

Both acceptance and rejection messages possible

“Lean” Inbound Freight Invoice (CT-e)

Management

Receive and validate inbound electronic freight invoices

Automated Switch to SCAN for Contingency System checks for status of both SEFAZ and SCAN systems

Trigger creation of invoices using SCAN automatically when SEFAZ

system not available

Inbound NF-e Dashboard • Simplified visibility to summarized information for inbound NF-e’s

DANFE pdf Create a pdf version of a DANFE for greater ease in comparing

information

ABAP Digital Signature Service Use ABAP Digital Signature Service instead of Java Service

Now a synchronous call of the NetWeaver SSF Service

Highlights in Nota Fiscal Eletronica 10.0

© 2011 SAP AG. All rights reserved. 18

NF-e 10.0 System Landscape

Delivered with SAP Electronic Invoicing for Brazil (NFe)

Country

Version

Brazil

© 2011 SAP AG. All rights reserved. 19

Leading Companies Implement SAP NF-e

© 2011 SAP AG. All rights reserved. 20

SAP BusinessObjects Electronic Invoicing for Brazil

NF-e Roadmap

Focused on company selling

goods (referred to as

Outbound)

Manage communication with

government of invoices (NF-e)

in XML format

Technical validation and digital

signature of each message

Governance of communication

processes and statusing

Enable processing when

government systems

unavailable (contingency)

B2B integration w/ business

partners to send/receive XML’s

NFe 1.0 Focused on company buying goods (referred to as Incoming)

Check and validate NF-e’s from suppliers

Automation of manually intensive processes:

Compare XML data to purchase order

Creation of inbound delivery

GR and IR

Coverage for normal purchases, stock transfer orders, sub-contracting, future deliveries, returnable packaging, and inbound freight invoices (CT-e)

Change Letters (CC-e) as first phase of new event requirements

SCAN enhancements

NFe 10.0

Support legal changes enacted by Brazilian government since release of 1.0, incl. layout 2.0

SCAN

Resource intensive and high priority

NFe Legal Changes and

Updates

Outbound CT-e

Services electronic invoices

Import/export NF-e’s

Additional events

Enhanced B2B scenarios

Others TBD

On-going legal changes

Future (2012 and beyond)

4/2008

12/2010 and 11/2011 2012+

Important Note: 2011 and 2012+ are for planned, and/or future releases. Everything described is just a plan, not a commitment, and is

therefore subject to change or removal at SAP’s discretion.

SAP and Politec

© 2011 SAP AG. All rights reserved. 22

Founded in 1970/ 40 + Years in Business

Leading “Nearshore” SAP & IT Services Provider

Part of the Indra Group of Companies

Revenues: US$300M (2010)

Politec/Indra expanded global capabilities

31,000 employees globally

Presence in 110 countries

Global SAP Services Partner

Centers of Excellence across

Americas, EMEA, and APAC

© 2011 SAP AG. All rights reserved. 23

Politec SAP Overview

Politec is a Gold SAP Service & Channel Partner

(Latin America, USA + EMEA)

Politec is a complete end>end SAP service provider

Established Exclusive “Go To Market” partnership with SAP for NF-e

Sales Support and Best Practices implementation approach

First CMMI-Level 3 certified ABAP/NetWeaver software factory in

Latin America (2006)

1st SAP-Certified Provider of Application Management Services

Invitation to participate in SAP Eco-Hub program for success with

NF-e campaign

Politec is development Partner of SAP involved in important

initiatives such as NF-e and Payroll localization for Brazil

© 2011 SAP AG. All rights reserved. 24

Collection and Reporting of Duties and Taxes Across the

Supply Chain in Brazil

Challenge: Every Day is Tax Day Over 17 taxes that must be paid to the Federal,

State and Municipal authorities; Tax is due on 14

different days of the month

Challenge: Constant Changes to Laws There are over 5,000 tax laws. The production tax

(IPI) alone has 14,357 different applications and

was modified 216 times in 2007 and 85 times YTD

Exame, Um Mergulho no Labirinto Tributario, 10/09/08

Challenge: Tax and Accounting Reports In 2007 a company printed 426 tax and accounting books

containing 500 pages each (213,000 pages).. Books are stored

for five years for tax auditors

Challenge: Duplicate Information Tax authorities from each State (27) mandate annual reports

consisting of the same data that is reported on a monthly basis

for goods movement (ICMS)

© 2011 SAP AG. All rights reserved. 25

Brazil Localization Focus Areas

Organizational Structures Master Data Brazil Taxes

Financials

•CNPJ

•CPF

•State Inscription

•Municipal Inscription

•Tax Classification

•Type of Business

•NCM

•Origin

•Usage

•Type of Material

•Financial Accounting:

•Specific accounts (e.g. for Brazilian Taxes)

•Gross revenue posting

•Asset Accounting

•Specific chart of depreciation

•Tax incentive on investment in assets (CIAP)

•Costing and valuation

•Trading goods to be valuated at moving average price

•Manufacturing and importation require period based actual

costing

Legal Books

•IN68 / IN86 (Master data, document files, and tables)

•DIRF (Withholding tax report)

•CIAP (ICMS credit on fixed assets)

•Livro Diário, Livro Razão (Journal, list of accounts)

•Accounting SPED

•Fiscal SPED

•PIS/COFINS SPED

•* Most can be covered by standard SAP

•IPI – Federal Tax on Industrialized

Products

•ICMS – State Tax on Goods

Movements

•Substituição Tributária – Tax

Substitution

•ISS – Municipal Service Tax

•PIS, COFINS, CSLL – Social

Contributions

•IRRF, INSS – Withholding Taxes

© 2011 SAP AG. All rights reserved. 26

Project Methodology – Global ASAP

© 2011 SAP AG. All rights reserved. 27

Critical Success Factors

• Select an experienced partner that has proven global delivery capabilities. Make

sure the partner is able to support your Brazil localization requirements

• Ensure your local resources have the bandwidth, especially in the Finance/Tax

department. They will assist in the design, validation and testing of the solution.

• Early participation of local SAP GRC PI expertise is needed to enable messaging

with the Brazilian tax authorities (SEFAZ)

• Invest in Project Management. Significant coordination with global COE’s has to

occur from BOTH a technical and functional perspective

• Do not underestimate complexity of installing technical environment such as

installing the Brazil CATT (BASIS activity) and configuring GRC PI Server

•Certification of the transaction by local agencies tends to take time (GRC PI is

messaging with SEFAZ correctly)

© 2011 SAP AG. All rights reserved. 28

Lessons Learned

Try and standardize global business processes (Global Template approach) to

Brazil as much as possible and focus on uniqueness of localization

Utilize SAP’s native solution for NFe instead of 3rd Party- SAP NFe allows for

tighter integration between SAP components going forward

Invest in a Discovery Session to determine infrastructure, resources, business

and data requirements for the project.

Master Data Quality – Customers, Vendor and Material. The government will

recalculate taxes and penalties can be assessed if not correct

Develop a contingency plan if any communication issues with the government

arise. This is not only a go-live requirement, but a necessity for any time after

the implementation.

Both Parties should have a good understanding of the respective challenges

Thank You! Contact information:

Linda McKee

Senior Director, Solution Management, SAP

Linda.mckee@sap.com

Gregory Ertel

Director, Marketing, SAP

Gregory.ertel@sap.com

Anil Mahendra

Vice President of Sales, Politec

Anil.mahendra@politec.com