The Electronic Invoice System

Colombians are very proud of the recent advances in electronic invoicing. We have ceased to be one of the economies that lagged behind the leaders of the region.

The concept of electronic invoicing is evolving to a broader one, which is that of the electronic invoice system. It comprises the electronic documents that are part of the purchase and sales book, which will be the heart of the suggested tax declarations for both VAT, national consumption, and income tax.

The electronic invoice system includes the massification of electronic invoices, debit notes, and credit notes, receiving close to 5 million daily electronic documents from more than 600,000 companies and individuals. DIAN technology and regulations are ready to begin shortly with electronic payroll, e-factoring, and support for users not compelled to use invoices. Additionally, before the end of this presidential term, it is projected to finish with the import documentation and all other equivalent documents, as well as the other necessary fiscal receipts from the purchase and sales book.

The Colombian model of the electronic invoice system is very particular. It is the sum of the positive and negative experiences of the countries of the region, accompanied by recent technological advances, which have allowed us to have shorter paths, but with a national touch:

  • Prior validation of each operation. DIAN directly validates each invoice before the supplier issues it to its client.

  • There is no intermediary between the issuer and the DIAN, real-time validation of each electronic document takes less than a second.

    electrónico.

  • Technological solution hosted in the cloud.

  • The digital signature of the documents, guaranteed by a third party, grants the authenticity, integrity, and non-repudiation of each operation, allowing security in commercial transactions and promoting e-factoring.

  • UBL 2.1 standard.

  • Inter-operability through email.

  • Additional information for special sectors parameterized with number-value fields.

  • Invoice as support of costs, expenses, and tax deductions.

  • Once the electronic invoice is accepted, it becomes a security, which allows it to circulate through the figure of the endorsement.

  • Real-time analytics of alerts.

It is quite a long way to go, and surely there are adjustments to be made, however, the push of the country in general, listing businessmen, unions, and the government, keep us in an unstoppable dynamic that is leading us to say that the electronic invoice system is the first tool in the country to combat evasion and smuggling, and for entrepreneurs with the possibility of carrying out profound technological transformations.

I would like to expand the concept of electronic factoring in Colombia for this blog. As I mentioned, when the electronic invoice becomes a security instrument, it will be allowed to circulate in the national territory, which will be the first step of e-factoring. The potential in Colombia is immense, with USD $ 8.5 billion in paper operations in 2019, compared to USD $ 37,000 in Chile. Now, these paper operations, in addition to the possibility of negotiating with the electronic invoice the amount of 5 million electronic invoices, of which 60% are on credit, make us the big player in the region.

To achieve this, the Ministry of Commerce has regulated what is necessary for the circulation of the electronic invoice as a security instrument, through decree 1154 of 2020 and the DIAN regulated through resolution 015 of 2021 the RADIAN, which is the Registry Managed by the DIAN.

Solid foundations are laid for the electronic invoice system platform to record the events associated with the circulation through the same digitally signed XML technology, such as endorsement, payments, mandates, endorsements, limitations, among others are all electronic, which have to date more than 30 technology providers, fintech and financial entities testing the RADIAN, to start the second half of 2021 to such an important initiative whose final objective is to finance SMEs at times when you need it the most.

Important challenges come for e-factoring in Colombia, such as strengthening the sending of events by the buyer, such as the acknowledgment of receipt of the invoice and the goods and their acceptance, as well as the maturity of the risk models of payers, so that banks and funds irrigate resources to SMEs as we all hope will happen.

We are grateful to CIAT for these spaces so that we can exchange experiences between countries of the region. Without a doubt, Colombia has been one of the great beneficiaries of listening about other experiences in the region, which we recommend as an effective practice, and which we are now willing to share with you in the same way.

 

 

 

Disclaimer. Readers are informed that the views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the author's employer, organization, committee or other group the author might be associated with, nor to the Executive Secretariat of CIAT. The author is also responsible for the precision and accuracy of data and sources.

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