Latin America E-Invoicing

Global Platform. Local Compliance.

Today’s Agenda

Steve SpragueVP, Marketing & Product Strategy

Invoiceware

Presented by:

Catherine LiaoHead of Presales

1. Tradeshift Introduction

2. e-Invoicing in Latin America

3. Achieve 100% compliance in LATAM with Tradeshift

Tradeshift Business Cloud

A cloud-based platform enabling business interactions including e-Invoicing, workflow, payments, vendor management and more.

196

Countries

5mil.+

Businesses

15mil.

Invoices

$200bn

Spend

E-Invoicing with Tradeshift

• There are no barriers to join, all companies can sign up and start sending e-invoices for free.

• Buyers and sellers can interact and collaborate in real-time

• A rapidly growing eco-system of applications supporting enterprise invoice presentment and payment (EIPP) processes.

• Companies can extend business processes onto Tradeshift by installing or building their own apps.

E-Invoicing Challenges for Multinationals

Domestic e-invoice &

Cross Border

Domestic Invoices subject to electronic mandates

Cross-Border – still predominately paper

VATTax Remittance

Supplier VAT deductible only from gov’t valid invoices

Coordination of Credit/Debit notes to adjust gov’t registered taxes once goods accepted

PO usage on the rise but still low E-invoice formats don’t support “Straight Through

Processing” – need ability to append data

PO Usage“STP” Capability

SupplierCollaboration

Master Data & Onboarding Requirements Payment Status, PO Append, Dispute

Management, Supply Chain Finance

Different e-Invoicing provider in each country Complex legislation equals high internal support

costs

Multiple Local Vendors

Cross Border

E-Invoicing in Latin America

Differences to other Regions of the World

Different Types of Countries

• Mandated electronic invoicing: Brazil, Mexico, Argentina

• Expanding Countries: Chile, Guatemala, Uruguay, Costa Rica, Colombia

Domestic versus Cross Border

• Domestic equals VAT tax and is subject to country mandates

• Cross Border is predominately paper

Mandates Constantly Evolve

• Can change 3-4 times per year as the tax regulations evolve

• Average multinational spends 2600 hours a year managing Brazil issues versus an avg. of 80 hours a year in other countries

Government in LATAM• Mandates the use of electronic invoices• Mandates that supplier must make e-Invoice available to Buyer• Mandates the Format of the Invoice• Requirement of Supplier Invoice: Approved and Accompany the

Truck• Increases accuracy of what was ordered, shipped and invoiced

• Invoice can arrive even before the Goods

Paper Invoices Supplier Rollout Multiple Formats Accuracy Timing

X X X X X

Gov’t Mandates for e-InvoicingEliminate Common Roadblocks

Real-Time E-InvoicingBaseline Compliance Process Sets the Stage for Straight Through

ProcessingBrazil Real-Time Compliance Mandates

• Real time integration with Brazilian Tax Authority (SEFAZ)• For Accounts Payable – Goods Nota Fiscal, Service Invoices at City Level & CTe -

Transporation • NF-e received electronically by recipient in advance. Must be validated and any

returns accounted for via “return order process”• SEFAZ does not validate your taxes in real time but they do data-mine to check

later• Brazilian companies are responsible for accurate taxes of their suppliers as well

Paper

Electronic

Inbound A/P

• Paper not authoritative for compliance

• Suppliers must provide XML electronically

• Step 6 (required) sets up opportunity for automated matching & “straight-though” processing.

5

E-Invoicing in MexicoCompliance Update

December 31, 2013

– CFD is Repealed

– There is NO “Grandfather” clause – everyone must switch

• Includes all current CFD Users

• CBB (paper) allowed only for companies > $250K Peso (~20K US Dollars)

Mandated Inbound ValidationMexico Moves to CFDI

Mexico SAT - Real-Time Compliance Mandates

• Real time integration – legacy was a batch process• Invoices must be registered and approved before being sent• Printed CFDI is also a valid, legal invoice, XML must be archived for 5 Years• CFDI may be received electronically in advance. Must be validated as authentic

before payment.• Each outbound e-Invoicing solution must also provide for inbound validation as well• IMPORTANT: Step 6 – You do not want to pay invalid invoices – Audit Risk & You

Assume Tax Issue

SEFAZ Solution – Two Way Process Orchestration via NFE “events”• NFE is acknowledged by the receiving CNPJ through event posted back to SEFAZ. • NFE must be acknowledged within 180 days initially, and eventually before

shipment as phased roll-out progresses. • Greater burden on receiving CNPJ, but many large receiving CNPJ are pushing for

these changes to guard against ghost transactions in the first place.• Solution very similar to EMCS for Alcohol/Tobacco/Energy within Europe

Draft, subject to change

Bi-Directional Process Orchestration with SEFAZ as the

Mediator Between Parties

100% LATAM compliance with

Tradeshift

Considerations for E-Invoicing

Compliance

• Avoid ~$250 fine per invalid invoice• e-Invoice received must match the e-Invoice previously

registered with the Tax Authority. • Valid invoice = Okay to Deduct VAT on remittances to

Government.

AP Efficiency

• If PO backed, does invoice = PO = Goods Receipt? • If not PO backed, does commodity manager or buyer

approve? • Have the Goods Arrived and been processed?

Finance Optimizatio

n

• Inability to optimize cash flow (e.g., Missed Discounts)• Liquidity concerns for supplier operations• Short-term investment of cash

A single process to address Fiscal Compliance (OK-to-Deduct) and Commercial Compliance (OK-to-Pay)

Local language phone support

Flexible supplier connectivity options

Highest supplier value proposition

No supplier fees!

LATAM Compliance App(powered by Invoiceware)

How Does It Work?

1

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100% Compliance in LATAM

Guarantee Compliance– Full AP and AR invoice validations

– Immediate upgrades to accommodate any changes in mandated regulations

– Ensure fiscal and commercial compliance

Streamline Business Processes – Eliminate configuration issues

– Cut high cost of localizing & configuring ERP installation

– Support in a local language

Remove Risks – Eliminate the risk of audits, stiff penalties and potential criminal

charges

– Avoid receiving and posting invalid invoices

– Guarantee your ability to ship, collect money, and legally file local taxes

Let Tradeshift assist with your LATAM E-Invoicing rollouts.

Q&A