Electronic invoicing and concerns about the Mexican mandate

Electronic invoicing and concerns about the Mexican mandate

It was announced a few weeks ago that the Mexican Government has given businesses just 6 months to prepare for a major legislative change that will directly affect hundreds of thousands of small and medium sized businesses. And it’s not a trivial change. If businesses want to get paid for goods and services they supply, they’ll need to ensure that they generate invoices correctly and in accordance with the new rules. It’s not optional. There’ll be no excuses.

It seems like a good idea to insist on the use of electronic invoices. It’s a mandate for common sense. The Mexican Government is embracing the digital age and at the same time implementing a zero tolerance approach to business taxes. But the rate of change they are imposing could create chaos as businesses fail to meet the deadline.

Purchasing Insight logoUp until the end of 2013, it’s only relatively large businesses that are obliged to send electronic invoices in Mexico – a business with revenue of less than MXN$4,000,000 escapes the mandate. But from January 2014, any business with a revenue greater than MXN$250,000 will need to issue Combrobante Fiscal Digital por Internet (CFDI) invoices generated by authorized third parties. The use of self-generated CFD invoices will no longer be allowed.

To put this in perspective MXN$250,000 is approximately US$20,000. This is a very low threshold and the change could affect 500,000 businesses.

So how will they cope? Will the Government infrastructure be up to it and will the authorized third party service providers be ready?

OB10 recently marked the 1st anniversary of their relationship with one such service provider Buzón E and while they’re not underestimating the challenge, they are confident that they can meet it.

“It takes years to build the necessary capabilities to generate and process compliant e-Invoicing in Mexico,” says Benito Celorio, Managing Director at Buzón E. “By combining our certification capabilities with OB10’s global e-Invoicing network, we are helping companies keep up with changes to our regulations.”

“Unlike other offerings in Mexico, we not only validate that invoices are compliant, but that they can also be processed by the buyer’s ERP system without causing costly manual failures,” added Paul Frederick, President at OB10, Inc. “Combined with our world-class technology and approach to supplier onboarding, more companies are enjoying the benefits of true e-Invoicing.”

An exciting time for the solution providers – an anxious time for businesses being forced to change. But it’s not all bad news for small business and we are already seeing some unintended but positive consequences as some of the business ground rules become standardized across a whole economy. More of that to come.

Pete Loughlin can be found on twitter @peteloughlin

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