One Latin American country that currently does not mandate e-invoicing, Costa Rica, will soon join the 10 countries where this business process is required. The country is currently running a voluntary e-invoicing program as it works toward implementing its own e-invoicing system.
The DGT, Costa Rica’s tax authority, enlisted Servicios Publicos de Heredia (ESPH), a state-owned company providing public services like telecommunications, to develop, implement and operate its official electronic invoicing system. The completion date has yet to be announced, but what’s certain is that mandated e-invoicing is on the horizon in Costa Rica.
Companies doing business in Costa Rica can volunteer to implement e-invoicing now under DGT-02-09. Then, once the DGT finishes its system, mandated companies will have six months to comply (under DGT-R-48-2016). Note that information on this new resolution cannot currently be found on the DGT’s website, since it is not yet mandatory.
Though e-invoicing isn’t currently required in Costa Rica, the wheels are in motion for mandatory compliance, and companies need to start preparing now. Here are three key considerations:
- Build or buy? We’ve covered the pros and cons of building a solution internally versus leveraging an existing solution extensively, but the bottom line is this. Do you want to be in the business of compliance, or concentrate in areas that drive core business value? E-invoicing compliance takes up to 11 full-time personnel (or equivalent), and is often replete with fire drills – taking your most critical resource – your team – away from innovation.
- How do you preserve a centralized system of record while maintaining error-free compliance? Built-in solutions from ERPs are fraught with holes and compliance gaps, yet third-party solutions often take critical information and compliance processes outside of your system of record – leaving you prone to errors, discrepancies and manipulation. The best solution is one that keeps compliance within your ERP for complete corporate visibility and automated validations.
- Where can you create efficiencies through compliance? The standardization that e-invoicing requires means proactive companies that see beyond the requirements can create efficiencies in several key process:
- Accounts payable can be automated so that personnel can focus on discrepancies instead of simple verifications.
- Inbound receiving can be streamlined into a scan-and-click process, since invoices must be approved before goods arrive and accompany shipments.
- Traditional obstacles to supply chain finance are eliminated since all vendors are required to participate in e-invoicing, meaning that buyers can offer flexible payment options and suppliers can opt for immediate payment, improving cash flow.
As mandated e-invoicing is set to be announced in Costa Rica soon, companies should act now so they are not caught off-guard. Check out our customer success stories to see how companies like Philips, Pfizer and Sun Chemical have approached compliance in Latin America.
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About the AuthorMore Content by Steve Sprague