Upgrading Brazil Nota Fiscal 2015: Is your business at risk? [Compliance checklist]

Companies over the last 6 months have been working diligently on upgrading Brazil Nota Fiscal environments to version 3.1 . And while the IT projects is almost over, the business impact has yet to begin. Shipping Issues and Audit Risks back to 2009 are key areas of potential business impact.

Are you at risk of not being able to ship?

If you are relying on the new on network contingency models of the SEFAZ, you are at risk of not being able to ship. There have already been issues with the Sao Paulo web service back up known as SVC. Over the last 6 months, the government has been changing the way that they manage contingency as they have eliminated SCAN and DPEC.

Today there are three options.

  1. SVC (replacement of SCAN): SVC is a backup web service that has the benefit of not requiring reconciliation and after the fact registration at the state. However, it is not an end companies’ choice but rather the government’s decision to switch. Key takeaway: If this is your only backup plan, then you are at risk of not being able to ship.
  1. EPEC (now managed under Eventos): EPEC is the ability to connect to a national web service, when you choose, if a particular state web service is down.  The problem many people have, and the reason many companies have not implemented this is that even after you register with the national web service, you still need to get approval from the state servers. In other words, you need to reconcile your documents. Key takeaway: If you have not built this into the process – it can mean spreadsheets and nightmares for controllers so that they don’t find themselves at risk of audit.
  1. FS (provisional DANFe): FS is actually the only true way to ensure you can always ship.  It is your choice to switch at any time. And if you have configured your solution correctly, you can ship as long as you have connectivity and power to your printers.  Key takeaway: Much like EPEC, you must reconcile your invoices with the state servers once you come back on line.

For Invoiceware customers, all three of these solutions are supported and embedded as part of our portfolio. More importantly, instead of using spreadsheets to reconcile, our system automatically reconciles invoices after the fact. This automation provides not only peace of mind, it provides massive cost savings as the finance team doesn’t have to worry about the manual review process at the end of the month.  Instead, the technology does the work.

Do you have all your vendor XML since 2009?

If you ask this of your local finance teams in Brazil, you will find in over 90% of the cases the answer is a resounding NO! This is more than likely due to the fact of changing ERP systems and manual processes. However, the law does state that you should collect, validate and archive these Nota Fiscals for a period of 5 years.  The penalty is approximately 500 Reais (250 USD) per XML issue. I spoke with a company the other day that was missing 100,000 XML since 2009 – that is an amazing 25 Million USD potential fine based on the law.

Fortunately, the government released a “Recovery XML” option. Organizations can and should use this event to ensure that they have all of their invoices registered to their CNPJ tax id.  Now, this is important. Don’t wait to do this recovery.  There is a limit of how many XML you can download from the servers, so it will take time. And if you are audited, they won’t wait for you to go back and collect.

Look at this new web service as a good thing (you can get all the XML registered to your name in your archive) but also look at it as a bad thing (the government took any excuse away of not having the XML because they provided this new service). And the SEFAZ, provides this automation for their benefit.  In our next blog, I will discuss how this Recovery XML process can be used to drive Inbound Logistics, but in the short-term ensure you address these issues immediately.

Want to learn more about what to expect Brazil electronic invoicing in 2015?  You can find out more in this Brazil 2015 Compliance checklist



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