Mexico eContibilidad (eAccounting) Reports – 2 Issues Not to Overlook with SAP ERP
As in other Latin America countries, the transactional signing of standardized XML is always implemented with a corresponding reporting element. Brazil has Nota Fiscal and SPED. Chile has DTE and Libros. And now Mexico has CFDI and electronic books.
Taxpayers must maintain accounting records through electronic systems that can create XML format files, which include the following:
- 1. Chart of accounts used during the period. Due in October and if changes are made within 3 days of alterations.
- 2. Trial balance, with initial balances, movement for the period and final balances for each of the accounts of the taxpayer, including assets, liabilities, equity and results of operations (revenue, costs and expenses). Due January 2015 for (July to December) and monthly afterwards no later than the 25th of the following month or April 20th for annual forms.
- 3. Information related to journal entries in the accounting records. Will be due based upon audit requests. In other words – you have to implement them as they will be used to audit you and compare your transactions to the government databases.
Two Issues that you cannot avoid:
- The Chart of Accounts while stating only level 1 and level 2 data, could cause companies a number of issues. For example, what if you don’t break your sales down by the SAT classifications – this will cause you to have to right split procedures or adjust how your accounting system reflects accounts. This is only one of many examples (Depreciation, Rebates, etc…)
- The UUID (which is the unique code identifying a legal, registered invoice) will have to accompany the journal entries. 99% of companies don’t integrate these signing attributes back into their ERP system let alone ensure that valid UUIDs are posted to the accounting documents, as they didn’t implement end to end solutions. Instead, they implemented 3rd party signing solutions that are loosely integrated and have no capability to solve this problem as it is an SAP issue, not a PAC issue.
Transactions equal data to analyze in Latin America; Reports equal the ability to find discrepancies and trigger real-time audits. There have been a lot of lessons in other countries that have moved to this e-accounting process – Brazilian SPED is by far the most complex. But remember, what Brazil started with in 2007 is similar to the Mexico SAT is requesting in 2014. It is only a matter of time before the legislation evolves. So be ready.