In an age where the way the great powers handle their economies is very questioned, the electronic billing has become a very important support for tax collecting strategies in Latin American countries, but at the same time it is allowing the creation of new business models, primarily financial ones, from the online digital sharing between millions of providers and buyers of all kinds and sizes.
Chile, which was the pioneer country implementing electronic billing since 2003, has finished the process for its total massification, requiring it as obligatory after many years where it was being spontaneously adopted by companies, motivated by its obvious benefits. More than 97% of billing in the country is electronic, issued by more than 400,000 companies.
It is surprising the great focus that taxing authorities have in e-Factoring, so for that, they have been doing legal and technological adjustments recently. Because of the former, there has been a strong increase of thispara kind of operations in Chile, especially SMEs that never used this kind of financial services and now are able to anticipate the payments of their electronic very easily, going from the proactive offers received from financial entities.
In Mexico, the second country to adopt this kind of rules (2005), electronic billing is mandatory for all companies, but to achieve that goal their 2010 model had to be heavily reformed. The e-Factoring is getting more relevant in Mexico as a concept and their authorities are studying at the moment which would be the best legal and operational model to implement it.
Brazil, regardless of starting a little later (2006), is the country that helped position Latin America as a world leader in electronic billing, because of the acceleration that was printed the adoption of the model and the high penetration levels that it quickly got. But, lately the project has been a little stagnated and the topic of e-Factoring shines with its absence.
Peru began a lot later (2012), but it took the task of studying very well all the successful models that already existed and currently is the country in the region with the best adoption rates. It’s also surprising the great vision that the Peruvian authorities have regarding e-Factoring, which they have named “negotiable billing” and there’s not only a set of rules, but also the first steps for its implementation have been taken, so all the necessary conditions are there for a strong growth of this funding mechanism in the country.
Colombia, which in theory is the first country in the region to have an electronic billing normative (1996), in practice it has not been able to successfully implement it and had to recently reform its rules, which is currently in its first steps towards its implementation.
In parallel, it is been legislated about e-Factoring and there have been steps taken also so it can be put into motion, using as inspiration what has been done in Chile and Peru. The new electronic billing model in Colombia is definitively very promising in every sense and after this first phase, it is expected to be massively adopted by the companies in the country, and also the negotiation of bills.
Meanwhile, Costa Rica has electronic billing for some years now, but it has been announced its obligatory condition, so it is expected to be massified soon.
Uruguay, Ecuador and Guatemala have solid models for electronic billing and have pushed for its massification. Argentina is also taking steps to raise the adoption from companies, but their model is not recommended, because basically, it is only useful for the taxing authorities purposes, not promoting much-added value to the businesses of the companies.
Other countries in the region, primarily Central America, have been well advised to launch soon their own rulesets.
In summary, Latin America has not stopped growing in the electronic billing adoption, placing itself as the leading region worldwide and by the way, the implemented models in some of these countries have served as inspiration and guidance for governments in other parts of the world. But maybe the most powerful thing is that when solving very complex taxing problems, Latin American taxing authorities have helped push new mechanisms that have the potential of radically improve the financial processes of companies.
The main beneficiaries –by far- are the SMEs, that when getting better and cheaper funding they raise their chances to survive in such a competitive world, at the same time they can get a better control over the collection of taxes, which should reply in a better sustainable development in our countries and our opinion, this should actually be the attention focus of our governors.
About Mario A. Fernandez
In 2011, Mario founded Gosocket. As CEO of this company, he has led the process of developing this network and has been in charge of designing his monetization strategy, through factoring and electronic payments. In 2009, Mario wrote the book Facturación Electrónica, Transformación Tributaria y Empresarial Inteligente, which has become a very useful guide for Tax Entities in several Latin American countries, helping them to understand and implement the best practices used in electronic invoicing.
About Gosocket
Gosocket, a B2B networking platform with a mobile component that provides services and a means for companies to interact with each other and streamline information sharing. Gosocket provides an application-programming interface (API) so enterprise users and third-party vendors can offer additional solutions and capabilities to augment the platform, such as accounting, inventory, and collaborative solutions.
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