Sotrux doesn’t include Electronic Invoicing feature, but it’s a standard that all companies must comply with in Colombia. So we think it’s important to talk about it and for you to know the best practices when implementing it.
That’s why in the following entry, we want to tell you how to do the process and what are the key factors.
Technology advances and the growing demands of a constantly evolving world have been transforming many of the processes and activities of our daily lives. This also includes the way the business generates invoices, opening the way to electronic invoicing which has become a fundamental component within the dynamics of tax registration and payment.
What the electronic invoicing is.
It’s a digital document that acts as an accounting support to guarantee the transactions of a purchase. Regarding legal effects, it has the same validity as the physical invoice, but the fact that it’s digital implies greater advantages. For its issuance it is important to keep in mind several aspects.
First of all, it is essential to update the RUT (Unique Tax Registry) making sure that it includes the information of the legal representative of the company or the taxpayer (individual) according to the case.
In addition to having the RUT updated, it is very important to have an electronic invoicing software, regarding this, there is a free invoicing service that DIAN (National Tax and Customs Directorate, in Colombia) offers and anyone can access. Besides not having any cost, it doesn’t have limit for the issuance and reception of electronic documents.
The procedure is as follow:
- User must register as an electronic biller on DIAN’s page. Then, user logs both as a company or as an individual. After registration, the DIAN will send a message to the legal representative or taxpayer email that appears in the RUT.
- Select the “technology provider” operating mode.
- Click on “free software” option.
- Successfully pass a set of tests to be enabled. These tests consist of sending electronic invoices to DIAN. There must be two proof invoices, a debit note and a credit note for the DIAN operator. For any accounting software, eight test invoices, a debit note and a generation of a credit note.
Once these four steps have been completed, the user must enter the authorization system, where a pop – up window will open requesting the production start date, which is the date on which the RUT is automatically updated. After this, user must enter the MUISCA system that will ask for a username and password for the billing numbering authorization for the electronic modality and electronic invoicing contingency checkbook.
After finishing this process, the user can start billing electronically. In the same way, the user can request a digital signature for free. Although it should also keep in mind that, despite being for free, terms and conditions apply. User can acquire this certificate through any entity authorized by the NAOC (National Accreditation Organization of Colombia, known in Colombia for its acronym in Spanish, ONAC).
Through the DIAN’s free invoicing service, it’s possible to receive invoices from suppliers and it’s ideal for those who want to generate unlimited invoices. User can use it from mobile devices.
Other electronic invoicing options.
Besides the Internal Revenue Service, users have other three options for electronic invoicing:
A DIAN authorized company
Another option to generate electronic invoices is through an entity authorized by DIAN for this purpose. Regarding this, it is very important to select a provider that allows integration with the accounting and administrative programs available for the company, since this offers the possibility of storing the information in one place. On the other hand, having the option of storing information in the cloud offers security of information and that it will be possible to access from any device and at any time.
An accounting software or ERP
It’s also possible to use an accounting software or ERP (Enterprise Resource Planning) that has an electronic invoice module.
A self – develop program
If the user has the technical knowledge to create it, they can use their own software. About this, DIAN offers an annex with the technological specifications that also includes examples of electronic invoices.
Electronic sales invoices.
This is, among all the tax mandatory documents for electronic invoicing, the most used. It’s mandatory for the following users:
- Legal entities that dispose assets and/or services.
- Individuals with gross income that exceeds 3.500 TVU (Tax Value Units, known in Colombia for its acronym in Spanish, UVT).
- Individuals who are State contractors with gross income exceeding 4.000 TVU.
- People who are not: retailers, artisans, farmers or ranchers who also have incomes below 3.500 TVU, but have more than one commercial establishment.
- Persons who work with intangible assets or those who are customs users.
- Taxpayers who are in Simple Tax Regime (known in Colombia for its acronym in Spanish, RST).
Likewise, it includes electronic credit and debit invoices and export invoices.
Also read: What is inventory management and how to master it.
Equivalent documents.
It’s important to consider that ticket generation in store with every sale, must be electronic. These documents are:
- Cash registers ticket.
- Entry ticket to the cinema.
- Passenger transport ticket (land or air).
- Statement issued by: fiduciary companies, individual, mutual, foreign or collective investment funds and stock, pension and severance funds.
- Localized games receipt.
- Gambling games receipt.
- Tolls receipt.
- Operation document for stock exchange and in farming exchange.
- Public services document.
- Entry ticket to public shows.
By implementing the electronic format in the invoicing process, it is intending to:
- Achieve a greater fiscal control by reducing tax evasion and tax flight.
- Optimize the collection process.
- Speed up procedures by automatizing operations and reducing or, in some cases, completely eliminating the human intervention.
- Improve the security of procedures by implementing means of verification such as electronic signatures.
- Promote transparency in processes.
- Encourage foreign investment through fiscal control.
- Reduce storage costs.
- Facilitate the search of old invoices.
- Eliminate the risk of document loss since documents are now in digital format.
However, these are not the only advantages that the electronic format has. On next, a deeper analysis of the benefits it offers.
The benefits.
With electronic invoicing, companies can achieve savings of up to 84% in relation to the costs of generating physical invoices, efficiency can increase by 60% and delivery times could improve by up to 200% and so, what normally takes days, it would take minutes. In addition, being able to access information with just one click without having to move, optimizes these processes.
Likewise, it technifies company processes, increasing efficiency and environmental sustainability. It also contributes to transparency and reduces evasion since it allows a constant review of transactions.
It minimizes and often completely eliminates error rate in the documents which, in turn, speeds up processes such as collections and payment conciliation, which results in a reduction in economic losses.
Companies can generate savings in relation to the documents printing resources (ink and paper). Plus, achieve more corporate control by stop generating printed documents that are vulnerable to loss and deterioration. In addition, it helps to protect the planet since, according to estimations, for each million of electronic invoices, 56 trees are saved and CO2 emissions, paper consumption and transport costs are also reduced. Likewise, greater organization and better storage of invoices is obtained.
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