This year marks the tenth anniversary of electronic invoicing in Mexico. On January 5, 2004, the Ministry of Finance and Public Credit, through the Official Gazette of the Federation, issued the first ever schema for the Digital Tax Receipt or CFD. Since then, approximately 9,000 million electronic billing transactions have taken place. This figure is set to grow in coming years as the CFDI becomes mandatory, making Mexico one of the most innovative countries in this area.
In fact, the rollout of electronic invoicing in the Central American country has aroused the curiosity of the European Union and is now an example to follow, as we reported here. And with the rollout of CFDI, transparency and savings for taxpayers have grown exponentially, through greater fiscal control and process optimization.
The implementation of electronic invoicing in Mexico is the result of a progressive tax adjustment over the past ten years. From the CFD’s debut, with figures for 2005 of only 139,509 transactions carried out by this method, to compulsory use of CFDI for most taxpayers and payroll receipts in 2014.
Payroll issuance and delivery of payroll entails expenses for Mexican companies of over 37 pesos on average. A considerable part of the cost (90%) goes on the tasks of printing, delivery and safekeeping of the receipt signed by the worker. These data are taken from a survey carried out by EDICOM in interviews with benchmark companies in the country with more than 400 employees.
The report also provides other significant data: workers spend around 20 minutes collecting and signing their paychecks, a period that may increase in companies with more employees, where long waiting lines form at the doors of the Human Resources Department. Moreover, it is estimated that 5% of the documents have to be repeated due to mistakes or going missing. These figures show up the operational inefficiencies involved in manual payroll management.
Furthermore, with the recent Tax Reforms, the organizational drawbacks faced by companies in Mexico are compounded by the technical difficulties, as it is now mandatory to issue payroll and salaries in CFDI format for submission to the SAT.
The solution to avoid this type of inconvenience is automation of the process by means of totally electronic management. This can give rise to a saving of up to 88% per document for Mexican companies, but also brings other associated benefits. With the rollout of an electronic solution such as EDICOM CFDI Payroll, there is no more waiting, manual errors or papers going missing, and all the legal requirements are met. The workers sign their paychecks from their workstations with a simple click.
You can find out more about the survey’s conclusions and the EDICOM CFDI Payroll solution here:
As of 1 January this year, most natural and legal persons have the obligation to issue their employees’ paychecks as though they were just another CFDI. To do this, they must have an Authorized Certification Provider (PAC) to stamp these digital receipts and submit them to the Tax Administration Service (SAT) before sending them back to the issuing company.
Companies in Mexico may need to issue up to 4 paychecks monthly, so managing these receipts is a complicated task for many businesses. However, this new tax obligation is a great opportunity to optimize the process, as workers can now sign their paychecks with a single click, without waiting or standing in line. In other words, payroll management can become a 100% electronic process.
To get the most from this new system, EDICOM has created the CFDI Payroll Solution, a management software suite that can cut employer’s costs by 88% by simplifying the process. The solution also enhances security and safekeeping of salary payment receipts.
The Omnibus Tax Ruling (RMF) for 2014 announces certain changes relating to the CFDI. The most notable is the three-month extension granted by the Tax Administration Service (SAT) to some taxpayers to allow them to switch over to the new electronic billing schema. All natural persons who did not earn over 500.000 pesos in tax year 2012 tax may continue with their current billing system until 1 April, after which the CFDI becomes mandatory. This measure, announced by the SAT, could benefit some 563,000 taxpayers.
Moreover, individuals will no longer need to have a digital seal certificate to issue electronic invoices, whether they do so through an Authorized Certification Provider (PAC) or register their income and expenses via the SAT portal. In other words, having the FIEL and RFC will suffice.
Along with this extension, there are also another two related with issuing payroll and salaries in CFDI format. On one hand, the RMF for 2014 states that both natural and legal persons with income in excess of 500.000 pesos will have the period until 1 April to issue the CFDIs corresponding to salaries and withholdings backdated to 1 January. However, this extension will only apply if they have presented their clarification statement on the SAT website.
On the other hand, the document explains that taxpayers contributing to the Fiscal Incorporation Regime (REPECOS) as of 12 January 2014 will not be obliged to issue CFDI until 31 March for salary and payroll remunerations.
The remaining taxpayers who do not meet the requirements are obliged to invoice by means of CFDI as of 1 January.
EDICOM, first ACP in Mexico
EDICOM is the first PAC in Mexico and the most comprehensive on the market. The company has NOM151 (electronic notary services), ISO and SOX certificates. Edicom also has a Service Level Agreement (SLA) guarantee that undertakes to provide 99,9% service availability.
To clear up any doubts or queries about CFDI, visit http://www.cfd-cfdi.mx/
Studies carried out by EDICOM using in-depth interviews with a customer sample reveal that 87% of the cost entailed in managing a salary is invested in its delivery.
The issuing of electronic payslips in Mexico and their certification before the SAT in the same way as any other electronic invoice or CFDI is a new obligation that businesses must fulfil in 2014. But it is also an opportunity to improve their internal processes and reduce costs, if they know how to take advantage of the possibilities technology offers.
Here are three quick tips to help you benefit from the obligation to issue electronic payslips.
Send out your payroll in electronic format
|Issuing a CFDI with the payroll complements guarantees compliance with current regulations. But why keep on printing out the document on paper for delivery to each worker? Take one more step and switch your entire model over to digital, with electronic payroll dispersion services.
Get your employees to sign their payslips electronically
|In Mexico it is necessary for workers to sign their payslips. Why not get them to do so electronically? The digital signature replaces the handwritten, with identical legal value. Moreover, it is a safer and more efficient process than manual signature.
Safeguard your receipts electronically
|Businesses are obliged to keep signed payslips as proof of the payments made. Implementing a fully electronic model lets you keep legal digital files, which take up no physical space and can be swiftly retrieved as required by third parties.
EDICOM “Nomina” Portal: Comprehensive electronic payroll management
“Nomina” Portal, the solution developed by EDICOM, enables businesses to overcome the inefficiencies associated with delivery, signature and storage of payroll receipts. A solution that provides services from a single platform, including:
- CFDI issuing systems with the payroll complement.
- Web platforms for delivery of encrypted salaries
- Electronic document signature solutions for workers, who access their private web framework to check and sign the receipts.
- Storage and safekeeping services for electronic receipts with guaranteed access and retrieval throughout the validity period.
Contact us to find out more about Payroll Portal and get maximum benefit from the obligation to issue Electronic Payroll Receipts.