Any business with operations in Latin America knows what a burden e-invoicing and tax reporting compliance can be. From constantly changing legislation to business disruptions and financial penalties, the challenges associated with Latin American compliance are profound, and continue to compound with each new mandate.
Businesses are approaching these challenges in two ways:
- Reactive compliance: This approach involves rapid responses to any new mandates that come along and mad dashes to fix any issues that arise. Companies miss the advantages that compliance can bring when they use this method; and they are often forced to spend countless dollars and human capital to keep pace with compliance.
- Intelligent Compliance: This is a proactive approach to compliance that boasts greater efficiency, improved accuracy and centralized information. Ultimately, companies leveraging this approach reduce both the risks and burdens associated with compliance.
Intelligent Compliance embodies two core components: centralization and automation.
Error-free compliance starts – and ends – within your ERP. Having a centralized system of record ensures that there is a single source of truth for all invoices and accounting reports. That equates to a strong audit trail in the event of a government inquiry – which is increasingly critical in light of the trend toward real-time audits. This approach also ensures visibility and transparency, as there is no room for data manipulation or discrepancies within one centralized compliance hub.
However, ERPs alone are no match for the complexities of compliance in Latin America, making it important to find a solution that works within your existing centralized systems that doesn’t maintain any external data. Employing a centralized approach within your ERP results in streamlined updates in the event of regulatory changes, requiring fewer resources and fire drills.
A centralized strategy, coupled with the standardization required to comply with Latin America’s strict e-invoicing requirements, can power greater automation within enterprises. For example, real-time, standardized e-invoicing facilitates automated tax reports – as details can be auto-filled from these invoices into the government’s preferred form. Likewise, since error-avoidance is such a critical component to effective compliance, automatic validations can be created to ensure that purchase orders, invoices, goods receipts and tax returns all match. This not only reduces errors, but also eliminates manual data entry and allows internal staff to focus on more profitable initiatives.
For a more thorough look at how to reach Intelligent Compliance, including examples from forward-thinking companies like Brown-Forman and Philips, download our detailed guide to The State of Regulatory Compliance here.
The post Intelligent Compliance Key to Success in Latin America appeared first on Sovos Compliance.