Wednesday, April 28, 2010

Electronic Invoicing and ERP Processes, Part 2

In Part 1 of this series we discussed the challenges third party, and ERP agnostic, electronic invoicing service providers experience trying to be compliant with government and tax authority mandates due to the need for ERP's to support specific and unique business processes.  The bottom line is that ERPs must be set-up and configured by ERP experts to support many e-invoicing requirements.

I worked on a project where an American equipment rental company needed to be compliant with Mexico's e-Invoicing requirements (Servicio de Administracion Tributaria (SAT).  They were required to use the Firma Electronica Avanzada (FIEL), an advanced electronic signature authorized by the SAT.  The biggest problem we had on this project was not in supporting the required data formats (something most electronic invoicing service providers like OB10 could do), but getting the rental company's ERP to support the required processes.  The key point is that the challenges were not in the messaging and formatting but in the internal ERP processes.

Electronic invoicing service providers, that are ERP agnostic, must simply throw their hands up in the air and step back when there is an ERP process issue.  That means they are increasingly throwing their hands up, because more and more countries are mandating major changes to the way the business processes, including the invoice, transportation, data warehousing, and bills of lading processes must be completed.

In the case of the Mexico e-Invoicing requirements, companies must archive digital signatures and unique invoicing numbers issued by SAT on the physical premises of the business location in Mexico.  This in itself is a new process not included in ERPs without some new configuration and design.

The bottom line - third party, ERP agnostic, electronic service providers cannot in themselves support electronic invoicing globally.  The ERP vendor must be involved as the processes in the ERP must be configured to support each country's unique requirements.

See related articles:
Author: Kevin Benedict Principal
Consultant/Founder Netcentric Strategies, LLC
SAP EDI Consultant, Mobile Industry Analyst and Web 2.0 Marketing Consultant
 ***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.

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