A Year of Changes in Brazil (Part 3): Bloco K Presents Inventory Management Challenges

What Is Bloco K?

Bloco K is an expansion of Brazil’s SPED e-accounting measures, requiring an electronic book of production and inventory. Mandated for all manufacturers that sell goods (and therefore, issue NFe), Bloco K reports contain production and manufacturing information related to the usage of raw material and components. It requires details regarding ICMS and IPI collected, inventory and stock movement, finished products manufactured, raw materials, components lost during the process, third party manufacturing information and more.

What’s the Implementation schedule?

  • January 1, 2017: The SEFAZ, Brazil’s tax authority, required companies with revenues exceeding 300M Reais (~$95M USD) to begin submitting inventory information.
  • January 1, 2018: Bloco K will go into effect for companies with revenues exceeding 78M Reais (~$25M USD).
  • January 1, 2019: All companies will be required to comply with Bloco K.

Bloco K represents a major shift in the way companies track inventory, requiring not only new reports, but also new internal tracking and documentation processes. Manufacturers that have not began preparing for the 2018 deadline should do so immediately or risk a delay in compliance and significant implementation challenges.

Why did Brazil introduce Bloco K?

The SEFAZ will use Bloco K reports to monitor the full cycle of goods, matching SPED reports with incoming and outgoing NFE to track purchases, sales and production. Inconsistencies between each of these reports will trigger audits and fines.

What are the specific requirements?

On a monthly basis, manufacturers must produce the following reports:

  • Standardized Specific Consumption
  • Bloco K opening
  • ICMS/IPI Collection Dates
  • Carrying Stock
  • Other Internal Movements
  • Produced Items
  • Manufactured Products
  • 3rd Party Manufactured Products
  • 3rd Party Inputs Usage
  • Block Closing

How should companies prepare for Bloco K?

Bloco K presents several challenges to manufacturers, including the implementation of new cost accounting measures to track this level of detail, understanding exactly which reports they have to comply with and determining how they will extract and report the required data.

To learn more about these changes in Brazil, listen to our webinar replay: What You Need To Know For Brazil NFe 4.0, EFD-REINF and Upcoming Compliance Mandates

The post A Year of Changes in Brazil (Part 3): Bloco K Presents Inventory Management Challenges appeared first on Sovos Compliance.

About the Author

Gustavo Jimenez

Gustavo Jimenez is the Product Marketing Manager for Sovos’ solutions in Latin America and is based in Atlanta, GA. Gustavo is responsible for go-to-market strategy for Sovos LatAm Reporting solutions in countries with existing and upcoming eReporting mandates. He has more than five years of experience in eInvoicing, middleware integrations, and regulatory research. He works closely with the product management and development team as well as sales and marketing to facilitate compliance process transformations for Sovos clients. Prior to joining Sovos, Gustavo was responsible for marketing activities and strategy at Invoiceware International, a leading eInvoicing solution for businesses with operations in Latin America. He focused on the go-to-market strategy of their solutions as well as communications with the LatAm market about regulatory changes and new solutions.

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