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Author's profile photo Steve Sprague

Mexico CFDI eInvoicing – Red Flags to Avoid or You May Miss the Deadline

So, you have received the news by now. And, most likely the Mexico change is starting to make waves through the organization.  Well, hopefully it is making waves because if it’s not, it surely will come crashing down January 1, 2014.  We estimate that 20% of multinationals or more will struggle to meet the deadline because they will fail to evaluate solutions properly.

And as the reality of this change and size of this change sets in, there will be a mad rush to find solution providers.  The problem is that most companies will look at the wrong problem or think that there is a standard solution from their ERP provider – rest assured this is nothing like CFD.  It is not a simple XML schema or an internal signature that can be managed via a middleware like SAP PI.  You have to have 3rd parties involved beyond the ERP system as you need a government signature – and if you miscalculate the implementation, day to day maintenance and change management – you will not be able to ship, collect from customers or ensure you pay your VAT remittances correctly.

Many companies will put a fire drill together and find a low cost way of doing this as it is not a budgeted project.  However, the low cost solution will only look low cost because they will leave you doing all the work. Getting the “timbre fiscal” and unique IDs through the government providers is not the real problem with CFDI. The real problem is with the SAP configuration and customer specific requirements that you deal with on a daily basis. 

So here are RED FLAGS to be aware of:

If a solution providers says to you:  “Just map your SAP data to this standard file format” — please raise the flag and start waving. This is the most overlooked issue and the one that will derail your project and create issues with Customer collections and Supplier payments.

Why you ask: it is because there is no such thing as a standard SAP solution.  No one company has implemented SAP ERP the same, there are pricing configurations unique to their business, unique internal processes such as payables processing, and unique end customer requests.

  • Classic data extraction issues include but are not limited to:
    • Discounts – there is only one field on the Mexico XML
      • What if your customers wants to see the discount per line item on the PDF
      • Is a discount a percentage, a flat rate, or some arbitrary logic that is customer specific
      • Question – how many customers do you have, how many different pricing configurations do you have – all of this will be difficult to map into a rigid XML
    • Surcharge
      • The Mexico XML has no field for Surcharge
      • Most customers want this as a line item on the invoice – how do you manage just this one example of an “Extended Attribute”
        • Extend Attributes are the issue with deploying along with Master data issues – if your provider doesn’t help you – you will be left with coding this and maintaining this throughout your SAP upgrades as well as through the constant government changes

If a solution providers says to you: “We support the entire process for electronic invoicing in Mexico” – please ask what “the entire process” means to them as it most likely leaves out the major issues.

  • Most solutions will handle the general compliance, but the main issues are behind the firewall
    • Issues with your unique SAP system
    • Issues with printing the PDF to place on the truck
    • Reconciliation issues – Canceled Invoices, or managing Credit/Debit notes when a supplier invoices has the wrong tax information or pricing on it.
  • Most solutions stop at a “Service Transfer Point” meaning: once they hand the signed file back through the firewall – they are done. In reality, the process isn’t done until it is integrated to SAP and released for Payment.

If a solution providers says to you: “It is just a local issue, and you don’t need a global project team or support team” – please ask yourself one question: where is my SAP system located? If it is not in Mexico and it is centralized in the US, Europe or Asia – then it is a global issues.  It will affect the SAP system, require integration technology, require constant SAP monitoring and upgrades to meet the mandates, and more.  For a multinational – the SAP deployment affects the local team, and the in country requirements always affect the global IT teams.

If a solution providers says to you: “If you can just wait for a month or two, we will have a solution ready”

  • What does this mean?  Many large organization are going to wait on so called standard solutions because they saw these for CFD.  However, CFD doesn’t have all the process issues of CFDI.
  • Also, CFDI has been around for more than 18 months — many companies had to transition in  July 2012. How does any credible provider for CFDI not have a solution ready when it has been around for so long?

I have recently put together an RFP check list for SAP multinationals to ensure they are asking the right question. Please feel free to connect with me.

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