e-Accounting now a reality in Mexico

Sistema de contabilidad electrónica en México

The new accounting requirement for Mexican companies calls for sending of electronic accounting records as of January 2015, and applies to all legal entities for those documents to be generated in the 2015 period, as well as documents generated and transmitted in the second half of 2014 ( July to December). The regulation is described in detail in the second resolution of amendments to the RMF and Appendix 24 thereof, whereby the SAT develops the new regulated electronic schema for the issuing of electronic documents or accounting reports.

 

Electronic accounting system challenges

Creation

Companies must generate three XML files corresponding to three types of accounting reports. These are:

  • Chart of accounts (single submission and each time a change occurs)
  • Trial balances and summaries (monthly submission)
  • Journal entries (monthly submission)

Construction of the XML file policies involves great complexity, as in order to maintain thorough control of the movements of companies this accounting file must include the UUIDs (universal unique identifier of invoices, aka “tax folios”) of all receipts issued and received by businesses, including invoices for travel expenses or payroll checks.

EDICOM Solution

Our data mapping technology allows us to automatically extract all data from your own accounting system and transform it into XML format. In addition, our system is able to extract the UUID codes for each receipt or invoice issued or received by companies for construction of the vouchers file.

Delivery

Once the messages are generated, the taxpayers must upload them to the Tax Mailbox . This is a private portal accessed with username and password through the SAT website.

EDICOM Solution

The EDICOM platform’s integration capacity allows us to reintegrate the XML files generated back into your own information or accounts management system, ready for delivery to the SAT.

Safekeeping

Under Article 34 of the Regulations of the Fiscal Code of the Federation, accounting files in their XML format must be preserved and stored as part of the accounting procedure, in compliance with the relevant official Mexican standards on generation and preservation of electronic records.

EDICOM Solution

The solution stores the XML files generated under high security conditions, with accessibility guaranteed, at the EDICOM Data Processing Centre. Likewise, all accounting documents follow the technological process associated with recordkeeping rule NOM -151, which certifies their origin and integrity against any future contingency.

Access official information provided by the SAT.

Integral quick start solution

This is a procedure which companies can outsource to an EDI (Electronic Data Interchange) service provider such as EDICOM, whose platform implements the necessary developments to generate the XML files and integrate them with each company’s own accounting system. This way, companies that have an EDI or electronic invoicing solution with EDICOM can roll out this new electronic accounting service quickly, which is a crucial asset, given the imminent requirement announced by the SAT.

 

E-billing growing exponentially in Mexico

CFDI MEXICO

Mexican taxpayers sent more than 2.4 billion electronic invoices in the first 6 months of the year. These figures from the Tax Administration Service (SAT) confirm the spread of Digital Invoicing via Internet (CFDI) scheduled for this year 2014. The main reason for this exponential growth is the implementation of legislative measures from the beginning of the year making it mandatory for physical and legal persons to use the so-called CFDI.

The study E-Invoicing/E-Billing: International Market Overview & Forecast published in February by Billentis consulting already highlighted Mexico as undisputed leader in e-billing worldwide. Indeed, this North American country showed the highest growth rates in 2013.

The figures presented now by the SAT, 2400 million electronic invoices, contrast with those of just a few years ago. For example, in 2011 Mexican taxpayers generated no more than 119 million electronic invoices. In fact, the number of CFDI sent in these first 6 months of 2014 already represents 21 % of all electronic invoices generated in the last 10 years, since this new system was rolled out in the country.

Mexico was one of the pioneers in the compulsory introduction of e-invoicing. With the 2nd Resolution of Amendments to the Omnibus Tax Ruling for 2013, the SAT announced that all taxpayers billing more than 250,000 pesos a year should migrate to CFDI before January 1, 2014, although a three-month extension was subsequently agreed.

Electronic invoicing has helped improve the fight against tax evasion in Mexico, but has also entailed a great number of benefits for taxpayers. With the automation of procedures and the use of electronic means to replace paper, Mexican companies have gained both in savings and productivity.

 

EDICOM, first PAC in Mexico

Edicom is the first PAC in Mexico authorized by the SAT. Our electronic invoicing solutions are designed to meet all legal requirements, while enabling users to take full advantage of the CFDI. In addition, we are endorsed by certificates such as ISO, SOX and NOM151 (electronic notary).

 

Mexico’s big hitters rely on Business Mail Payrolls

Business Mail Payrolls

From more than three months now, payroll issuance using the CFDI schema has been mandatory in Mexico. This is part of a technological modernization strategy making this North American country one of the most advanced in electronic management. The path towards limiting the use of paper is also marked by a considerable economic saving which, for payroll receipts, reaches 80% per document.

This information is taken from a survey carried out by EDICOM, showing how prior to rolling out CFDI, the payroll issuing and delivery process used to cost around 37 pesos each time for Mexican businesses. This sum mainly went on tasks such as printing, delivering and safekeeping of the pay check signed by the worker.

With the electronic process, however, these tasks have disappeared, and the whole procedure is currently done practically automatically through a solution such as Business Mail Payrolls. Through this platform, EDICOM generates, stamps and submits all the payroll receipts to the SAT. In addition, workers can sign documents electronically without leaving their post. All the pay checks are then stored in a secure high availability environment where both employees and employers can consult the documents at any time.

This is why major companies with a considerable number of workers, such as Eli Lilly, Pilgrim´s and Star Medica, UNILEVER, Robert Bosch, Volaris, Continental, BMW, McCormic, Prosegur, Fermic, Hanesbrands or Alucaps Mexicana trust and benefit from solutions such as Business Mail Payrolls to handle their administrative transactions and finally wave goodbye to paperwork. Thanks to this type of software, they can cut costs and boost employee productivity, as workers no longer have to line up during working hours to sign their pay checks.

 

New Tax Law amendments for 2014

The new amendments that came into force on July 1 were rolled out by the SAT specifically to govern the management of CFDI in certain economic and fiscal operations.

In addition, they highlight the new specifications for taxpayers who are required to keep an accounting record of their operations. They are now required to have electronic systems able to generate files in XML format containing a series of fields which include detailed data on their economic activities. Moreover, the accounts listing in the XML format specified must be sent by remote means to the Tax Mailbox on a regular basis (monthly, every time it is modified and at the end of each tax year).

 

Paystream recommends EDICOM e-billing solutions

Paystream recommends EDICOM e-billing solutions

The advisory firm Paystream Advisors has issued a report on e-invoicing in Latin America primarily aimed at large international companies with expanding economic interests in the region.

The first part of the study, headed “A CFO’s Guide to E-invoicing in Latin America”, examines the main features of electronic invoicing in Brazil, Argentina, Chile and Mexico. It also recommends some solutions for starting up the system. Among them, those from EDICOM stand out for their international scope and constant updating.

Latin America is probably the most advanced region of the world in the rollout of electronic invoicing. In these countries, most governments have adopted strict legislation making the use of electronic billing systems an everyday activity spread throughout all scopes, from B2B and B2G, where the generation of electronic invoicing is mandatory for submission to the tax authorities, to its implementation in the B2C areas, as a mechanism that provides a certain degree of fiscal control over individual taxpayers. Electronic invoicing not only entails great cost savings, but is also proposed as a highly effective measure to combat tax evasion.

The rollout of electronic billing in these countries has been progressive, gradually incorporating a greater number of taxpayers over time. In Mexico, for example, the process has been going on for over a decade. The aim of this gradual implementation is that the adaptation should take place without great efforts. However, today multinationals who want to grow in Latin America should implement this system from the word go. A process which can be difficult, especially in countries like Brazil or Mexico, where electronic invoicing is particularly complicated. This is compounded by the fact that many of these businesses come from countries like the United States, where the tax system is completely different.

Companies in the process of expansion should also bear in mind that each State has different technical and legal requirements. In this sense, the guide drawn up by Paystream is very useful, because it approaches the constraints involving e-invoicing in each of these countries. The report also highlights the need to have an international platform like EDICOM’s, which allows users to work with a single solution in different States, regardless of the legal standards, language employed or time zones.

 

An all-round solution

EDICOM has carried out electronic billing and EDI projects in over 60 countries worldwide. Moreover, the International E-Invoicing Observatory, run by renowned experts in the field, makes it possible to constantly update the solutions, so that they are always adapted to the law in each country. These features have consolidated the company’s position as a front runner in the sector.

 

CFDI touches down in Mexican airlines

CFDI Aerolineas

The electronic billing schema currently in force in Mexico (CDFI) has safely landed in the airline sector. And it does so by making it mandatory, as of 1 July, to issue electronic invoice receipts for the sale of airline tickets, as laid down in the Transitory Article Seven of the First Resolution of Modifications to the Omnibus Tax Resolution for 2014:

For the purposes of Articles 29 and 29-A of the CFF, and 18, section VIII and 90, paragraph six of the Income Tax Law, taxpayers providing domestic or international air transport services for passenger or goods shall issue the corresponding CFDI for income received for said services.

In addition, the law also states the obligation to deliver said document to taxpayers who request it, allowing a term of two business days from the moment payment of the transaction takes place:

For the purposes of Article 29, first and last paragraphs of CFF, taxpayers who provide air transport services for passengers or goods, when operating ticketing sales and guides using centralized systems for the monitoring, issuance or distribution of payment and services shared with other providers of the same services, shall fulfill the obligation to issue and deliver CFDI for these operations, within two working days as of the day immediately following the payment date of the transaction.

Download whole resolution.

In this legal context and with just a few weeks before the regulation comes into force, airlines are faced with the need to prepare their accounting and fiscal management systems for the issuance, submission to the SAT and online forwarding of the receipts to those passengers that request them.

 

100 % AUTOMATIC ISSUING WITH EDICOM TICKET PORTAL

To respond to this dual obligation faced by the airlines: to issue the CFDI and deliver the invoices to users, EDICOM has developed the “Airline CFDI Portal”, a technological solution that simplifies and automates CFDI issuing tasks.

With this solution, the airline offers its users an online portal with special security which the passenger can access to get their CFDI by a simple procedure that is 100% automatic and takes place in real-time:

  • The user accesses the portal and enters some personal and fiscal details.
  • The platform automatically generates the CFDI and EDICOM certifies the invoice, introducing the serial and folio number and declaring it to the SAT.
  • The client gets the bill in real time, and can download the receipt at the same time.
  • Invoices issued by the ticketing portal are integrated into the company’s accounting management system.

Some of the world’s major airlines, such as  Volaris, American Airlines, Delta, Iberia, KLM, Lufthansa or Air France, have rolled out the EDICOM CFDI Portal solution with a dual purpose: to comply with the regulations coming into force on July 1, 2014 and integrate the portal into their network of online services for customers and passengers.

Find out more about the EDICOM CFDI Portal.

 

SERVICE FOR TRAVEL AGENCIES

Travel agents will also be affected by the new laws, since in the course of their normal activities they deal with the purchase of large batches of air tickets.

As our CFDI issuing platform concentrates the main airline companies operating in the country, we have developed an “Airlines HUB” which automates all CFDI requests for tickets acquired daily by air travel agents and integrates them directly into the internal management system.

If you would like to know more about this service, please do not hesitate to contact our consultants.