Research: 50% of LATAM businesses don’t understand new e-invoicing mandates

Latin American countries offer multinationals affordable labor, low infrastructure costs and incentives. Despite the rewards, this region is one of the most complex environments for businesses to operate due to governments’ mandated e-invoicing and tax reporting compliance initiatives

To better understand the challenges faced by companies operating in Latin America, Invoiceware teamed up with leading Latin American business publication America Economia to survey 650 business executives.

In an effort to better understand the challenges faced by companies operating in Latin America, Invoiceware teamed up with leading Latin American business publication America Economia to survey 650 business executives.

Survey results

Respondents representing a wide range of industries – from consulting and banking to retail and manufacturing to telecommunications and logistics – agreed that the compliance landscape is a significant factor in their business outlooks. Here are some of the findings that explain why:

  • 49.2% – of all respondents have little or no understanding of new mandates in some of the most complex Latin American countries: Brazil, Mexico, Colombia and Peru.
  • 38.5% have had a delay in operations resulting from an invoice error
  • 15.4% have faced penalties or temporary shutdowns as a result of a government tax audit   or compliance error

The first step to mitigating these risks is staying up to date on regulation changes and requirement specifics. Yet that’s easier said than done. Compliance updates are often complex, frequent and issued in local, technical language – a challenge for multinationals to interpret.

The survey also revealed how companies are currently managing compliance:

1

The Internal Approach

Many multinationals, especially those with dedicated compliance teams, initially strive to stay up to date on new compliance initiatives themselves, ultimately risking missed deadlines, inaccurate reporting formats and other errors. Since Latin American compliance initiatives are among the most complex in the world, and are updated frequently, companies managing updates internally often miss opportunities to streamline processes by outsourcing these critical updates to a knowledgeable compliance partner.

2

The Multiple (Local) Vendor Approach

According to our survey, a large portion of respondents (73.1%) are handling e-invoicing and fiscal reporting requirements at the local level, meaning they must work with a different compliance vendor in each region in which they operate or create their own internal systems for each market. The challenges with this approach include the inefficiencies resulting from working with potentially several disparate vendors, language barriers and varied cost structures.

3

The Centralized Compliance Approach

The most streamlined option, reliance on a regional compliance partner that understands individual requirements on a local level for multiple countries eliminates frustrations mentioned in the two approaches above. By working with a compliance partner that understands their needs on a global level, but also possesses localized knowledge and support, multinationals safeguard against compliance risks. Further, with automatic updates and the ability to dedicate resources to the areas that matter most (business strategy, innovation and performance), companies can be confident in their compliance initiatives.

Click here to view the complete survey results and learn the key challenges faced by companies operating Latin America, as well as how the most proactive global enterprises are addressing these challenges head on.

 


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