Electronic Invoicing – The Mexican mandate is not just a matter for the Mexicans

Electronic Invoicing – The Mexican mandate is not just a matter for the Mexicans

Posted by Pete Loughlin in AP Automation, e-invoicing, Electronic Invoicing 20 Jun 2013

The electronic invoice goings on in Mexico have, understandably, attracted a great deal of attention. While nations like the US and the UK continue to sit on the fence, the Mexicans are setting the pace. But this isn’t just a matter for the Mexicans. And it’s not just Latin America that needs to keep a watchful eye on what’s going on as I realized when I spoke to Christian Lanng, CEO of Tradeshift and Steve Sprague, VP Product Marketing and Strategy for Invoiceware International.

I spoke to Christian and Steve shortly after they announced a strategic alliance in May. The press releases that go out alongside these announcements are often dry and lacking detail so I was eager to hear what was so special about the Tradeshift and Invoiceware partnership and to get some insight from the people on the ground.

Purchasing Insight logoWithout living and working in a country it’s not possible to fully understand the nuances of business and as Steve pointed out, operating within Latin America and complying with the new and still evolving invoice regulations is extremely complex. Latin America is multi-country, multilingual environment and maintaining the compliance rules is non-trivial to say the least. This is what Invoiceware bring to the table. They don’t do e-invoicing per se (at least not in the sense that Tradeshift and the other networks do) – they do the compliance. “We distribute to the end customer” explained Steve. “We track that distribution and we collect from the suppliers and correspond with them if the invoice is invalid.  It is all done just a bit differently than the traditional e-invoicing network.”

The second area of synergy is less obvious but very powerful. Within Latin America, both buyers and suppliers are obliged to use electronic invoices. But sellers still have to accept invoices from outside the Latin American jurisdiction. That gives them a challenge. They need to have electronic invoice records from their customers who are sending them paper. This is where Tradeshift’s CloudScan creates the second area of synergy. In simple terms, CloudScan allows sellers to verify the integrity of electronic invoices that have been scanned from paper. It’s a simple but powerful solution to the mixed environment that the Latin Americans have to manage.

The final area of synergy is the Tradeshift business model – it just fits. There is something very different about Europe and the USA when it comes to e-invoicing. In those territories electronic invoicing has been buyer driven. The message has gone out: “We require electronic invoices. Please send them to us in this prescribed format.” That won’t work in Latin America. There, the message has gone out from Government: “You are required by law to send and receive invoices electronically. You will all use this single prescribed format.” Tradeshift’s flexible, interoperable, free-to-supplier format will work well in Latin America and proprietary standards just won’t be allowed. This is not to say of course that other operators cannot thrive in Latin America. It’s just that the buyer driven model won’t work because in Latin America, e-invoicing is government driven.

So Tradeshift and Invoiceware are right to be excited about their partnership. As the World Cup and the Olympics – not to mention Brazil’s rapidly growing economy – makes Latin America an even more attractive market place, more and more global businesses seeking to capitalize on the opportunity are going have to accommodate electronic invoicing as a business process. The impact of the Mexican mandate it seems, could go much further than the Mexican borders.

Pete Loughlin can be found on twitter @peteloughlin

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