Electronic Invoicing for Brazil

SAP BusinessObjects Electronic Invoicing for Brazil (NF-e)
Greg Ertel, Director, Solution Marketing SAP Linda McKee, Director, Solution Management, SAP Anil Mahendra, Vice President of Sales, Politec October 13, 2011

Agenda
Introductions

SAP
Nota

in Brazil
Fiscal Eletronica Background Electronic Invoicing for Brazil Solution

SAP’s

 Scope  Functionality  Landscape  Roadmap
Implementing

NF-e with Politec

 SAP Relationship
 Key Brazil Localization Topics  Critical Success Factors  Lessons Learned
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Introductions

Gregory Ertel SAP

Linda McKee SAP

Anil Mahendra Politec

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SAP in Brazil

SAP BRAZIL
 15 years in Brazil
 656 employees and 48 trainees  Best enterprise solutions in 25 industry segments

 Indirect workforce of ~11,100 certified consultants
 1.5 million end-users  Strong ecosystem: 113 partners (Integrators and Channels)

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SAP BRAZIL
2.700+ Customers

Small

Large

Medium

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Some of our customers in Brazil

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Nota Fiscal Eletronica Background

Why Nota Fiscal Eletronica?
Notal Fiscal Eletronica (NF-e) is part of the Digital Public Bookkeeping System for Brazil, more commonly known as SPED. SPED consists of 3 main pillars:

Part of Decree No. 6.022 – Issued January 22, 2007

Fiscal
SAP Solutions:
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Accounting

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What is Nota Fiscal Eletronica?
Companies selling products in Brazil must send each invoice electronically to the government for validation before shipping their goods. Companies purchasing goods in Brazil must check the electronic invoice at the government before receiving the goods. Bottom line: The government wants to be sure they are getting all of their tax revenue. Companies need to handle these activities with an automated solution that can scale to high volumes of invoices and meet their business process requirements.

SAP BusinessObjects Electronic Invoicing for Brazil
or more commonly referred to as

Nota Fiscal Eletronica (NF-e)

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SAP’s Electronic Invoicing for Brazil Solution

Where is Nota Fiscal Eletronica supported within SAP?
Enterprise Performance Management
Strategy Management Planning, Budgeting, and Forecasting

Governance, Risk, and Compliance
Risk Management Process Control Access Control Global Trade Services Sustainability Performance Management

Profitability and Cost Management

Consolidation

Environment, Health, and Safety Management

Spend and Supply Chain

Nota Fiscal Eletronica

Business Intelligence
Reporting Interactive Analysis

Enterprise Information Management
Data Integration Data Quality Management

Dashboards and Visualization

Data Exploration

Master Data Management

Metadata Management

Advanced Analytics

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Value Drivers
Reduced Integration Costs
•Pre-built

Reduced Manual Effort
•Stop

Country Version Brazil

integration between NFe and backend SAP ERP
•No

shipments automatically if outbound NFe not authorized
•Automate

processes required to check NFe’s from suppliers
•Automatically

custom tables

•Reduced

risk during changes/upgrades

trigger creation of inbound delivery for faster receiving
•Automate

MIRO/MIGO

•Fewer errors

with information transferred automatically from XML

Reduced Time and Effort During Audits

Reduced Supply Chain Delays

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SAP’s Electronic Invoicing for Brazil (NF-e) - Automation and Compliance of Nota Fiscal Eletronica Processes
Key features
Compliance with NFe regulations Automated handling of inbound NF-e’s Automated triggering of back-end transactions ABAP Digital signature service
Automated contingency (SCAN)

Automated issuance and management of outbound NF-e’s
Outbound NF-e’s
Digital Signature and Validation Batch Creation
Digital Signature Check Authorization Validation

Notification to Vendors electronically
NFe Communication Management Status Monitoring and Updates
Inbound Delivery Creation DANFE Receipt Quantity Validation

Inbound NF-e’s

PO Assignment Invoice Simulation Vendor Notification

Trigger of Goods Receipt and Invoice Creation

“

We issue 15,000 to 16,000 invoices per month, reaching a peak of 500 to 1,000 per hour. All of them must be validated by SAP Business Objects Electronic Invoicing, which responds perfectly to the demand Marcos Mazarin
IT Manager Merck SA
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“Outbound” Nota Fiscal Eletronica – Tied To Sales Process at a Company, Versions 1.0 and 10.0 of NF-e
Company’s Localized ERP GRC NFe
Create XML Digital Signature

Government Systems

Sales Order

Create Batches Authorize, Reject, Deny NF-e Status from Government

Billing Document
Nota Fiscal Eletronica
NF-e Status To ERP

SEFAZ

Nota Fiscal

SCAN

DANFE

Government System Status to ERP
XML

Shipment
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“Inbound” Automation Nota Fiscal Eletronica – Tied To Purchasing Process at a Company, Version 10.0 of NF-e
Company’s Localized ERP
Purchase Order Nota Fiscal Eletronica

Supplier
Sales Order Billing Document Nota Fiscal

GRC NFe
Nota Fiscal Eletronica
PO Data
XML Check Authorization Check Digital Signature

Nota Fiscal Eletronica

Inbound Delivery

Assign PO Simulate Invoice Create Inbound Delivery

Check for XML Enter and Check Received Quantities Trigger Goods Receipt Trigger Invoice Creation

DANFE

Government Systems
SEFAZ

G/R Invoice

Nota Fisca l

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Highlights in Nota Fiscal Eletronica 10.0
Highlight
Automation of Inbound Processing

What it Does
 Automate the handling of inbound NFe’s for Normal Purchases and Stock Transfer Orders  Flexibly determine whether to automate or process steps manually  Trigger supporting back-end transactions  Notify vendors electronically regarding status of their NFe messages  Both acceptance and rejection messages possible  Receive and validate inbound electronic freight invoices  System checks for status of both SEFAZ and SCAN systems  Trigger creation of invoices using SCAN automatically when SEFAZ system not available • Simplified visibility to summarized information for inbound NF-e’s  Create a pdf version of a DANFE for greater ease in comparing information  Use ABAP Digital Signature Service instead of Java Service  Now a synchronous call of the NetWeaver SSF Service

Vendor Notification “Lean” Inbound Freight Invoice (CT-e) Management Automated Switch to SCAN for Contingency

Inbound NF-e Dashboard

DANFE pdf

ABAP Digital Signature Service

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NF-e 10.0 System Landscape

Country Version Brazil

Delivered with SAP Electronic Invoicing for Brazil (NFe)

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Leading Companies Implement SAP NF-e

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SAP BusinessObjects Electronic Invoicing for Brazil NF-e Roadmap
NFe 10.0 NFe 1.0
 Focused on company selling goods (referred to as Outbound)  Manage communication with government of invoices (NF-e) in XML format  Technical validation and digital signature of each message  Governance of communication processes and statusing  Focused on company buying goods (referred to as Incoming)  Check and validate NF-e’s from suppliers  Automation of manually intensive processes:  Compare XML data to purchase order  Creation of inbound delivery  GR and IR  Coverage for normal purchases, stock transfer orders, sub-contracting, future deliveries, returnable packaging, and inbound freight invoices (CT-e)  Change Letters (CC-e) as first phase of new event requirements  SCAN enhancements

Future
(2012 and beyond)

NFe Legal Changes and Updates
 Support legal changes enacted by Brazilian government since release of 1.0, incl. layout 2.0  SCAN  Resource intensive and high priority

 Enable processing when government systems unavailable (contingency)
 B2B integration w/ business partners to send/receive XML’s

 Outbound CT-e  Services electronic invoices  Import/export NF-e’s  Additional events  Enhanced B2B scenarios  Others TBD  On-going legal changes

12/2010 and 11/2011 4/2008

2012+

Important Note: 2011 and 2012+ are for planned, and/or future releases. Everything described is just a plan, not a commitment, and is therefore subject to change or removal at SAP’s discretion.
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SAP and Politec

 Founded in 1970/ 40 + Years in Business

 Leading “Nearshore” SAP & IT Services Provider

 Part of the Indra Group of Companies
 Revenues: US$300M (2010)  Politec/Indra expanded global capabilities
 31,000 employees globally  Presence in 110 countries  Global SAP Services Partner  Centers of Excellence across Americas, EMEA, and APAC

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Politec SAP Overview
Politec is a Gold SAP Service & Channel Partner (Latin America, USA + EMEA) Politec is a complete end>end SAP service provider Established Exclusive “Go To Market” partnership with SAP for NF-e Sales Support and Best Practices implementation approach First CMMI-Level 3 certified ABAP/NetWeaver software factory in Latin America (2006) 1st SAP-Certified Provider of Application Management Services Invitation to participate in SAP Eco-Hub program for success with NF-e campaign Politec is development Partner of SAP involved in important initiatives such as NF-e and Payroll localization for Brazil

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Collection and Reporting of Duties and Taxes Across the Supply Chain in Brazil
Challenge: Every Day is Tax Day
Over 17 taxes that must be paid to the Federal, State and Municipal authorities; Tax is due on 14 different days of the month

Challenge: Constant Changes to Laws
There are over 5,000 tax laws. The production tax (IPI) alone has 14,357 different applications and was modified 216 times in 2007 and 85 times YTD

Challenge: Tax and Accounting Reports
In 2007 a company printed 426 tax and accounting books containing 500 pages each (213,000 pages).. Books are stored for five years for tax auditors

Challenge: Duplicate Information
Tax authorities from each State (27) mandate annual reports consisting of the same data that is reported on a monthly basis for goods movement (ICMS)

Exame, Um Mergulho no Labirinto Tributario, 10/09/08
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Brazil Localization Focus Areas
Organizational Structures Brazil Taxes
•IPI – Federal Tax on Industrialized Products •ICMS – State Tax on Goods Movements •Substituição Tributária – Tax Substitution •ISS – Municipal Service Tax •PIS, COFINS, CSLL – Social Contributions •IRRF, INSS – Withholding Taxes

Master Data
•CNPJ •CPF •State Inscription •Municipal Inscription •Tax Classification •Type

of Business

•NCM •Origin •Usage •Type of

Material

Financials
•Financial Accounting: •Specific accounts

Legal Books

•IN68 / IN86 (Master data, document files, and tables) (e.g. for Brazilian Taxes) •DIRF (Withholding tax report) •Gross revenue posting •CIAP (ICMS credit on fixed assets) •Asset Accounting •Livro Diário, Livro Razão (Journal, list of accounts) •Specific chart of depreciation •Accounting SPED •Tax incentive on investment in assets (CIAP) •Fiscal SPED •Costing and valuation •PIS/COFINS SPED •Trading goods to be valuated at moving average price •* Most can be covered by standard SAP •Manufacturing and importation require period based actual costing
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Project Methodology – Global ASAP

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Critical Success Factors
• Select an experienced partner that has proven global delivery capabilities. Make sure the partner is able to support your Brazil localization requirements • Ensure your local resources have the bandwidth, especially in the Finance/Tax department. They will assist in the design, validation and testing of the solution. • Early participation of local SAP GRC PI expertise is needed to enable messaging with the Brazilian tax authorities (SEFAZ) • Invest in Project Management. Significant coordination with global COE’s has to occur from BOTH a technical and functional perspective • Do not underestimate complexity of installing technical environment such as installing the Brazil CATT (BASIS activity) and configuring GRC PI Server •Certification of the transaction by local agencies tends to take time (GRC PI is messaging with SEFAZ correctly)

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Lessons Learned
 Try and standardize global business processes (Global Template approach) to Brazil as much as possible and focus on uniqueness of localization  Utilize SAP’s native solution for NFe instead of 3rd Party- SAP NFe allows for

tighter integration between SAP components going forward
 Invest in a Discovery Session to determine infrastructure, resources, business and data requirements for the project.  Master Data Quality – Customers, Vendor and Material. The government will

recalculate taxes and penalties can be assessed if not correct
 Develop a contingency plan if any communication issues with the government arise. This is not only a go-live requirement, but a necessity for any time after the implementation.  Both Parties should have a good understanding of the respective challenges
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Contact information:

Thank You!
Gregory Ertel Director, Marketing, SAP [email protected]

Linda McKee Senior Director, Solution Management, SAP [email protected]

Anil Mahendra Vice President of Sales, Politec [email protected]