Does electronic invoicing benefit small and medium-sized companies in Ecuador?

Andrea Cruz has become accustomed to the fact that the establishments where she goes to buy send the invoice to her email. A few days ago, he bought clothes and shoes in a store in the north of Guayaquil and the document reached his e-mail. “I declare taxes and I need the invoices. At first I was not used to electronic invoices, but with the pandemic I changed my mind and now I see it as normal. In addition, I have the feeling that more companies send the invoices to the mail ”.

According to the Internal Revenue Service (SRI), the pandemic yes the number of taxpayers issuing electronic receipts has increased. According to figures from the entity, until March 2020, prepandemic, there were 123,271 taxpayers who opted for this option, but at the end of that same year the figure rose to more than 146,000.

Since 2014, electronic invoicing is mandatory in the country, so the SRI established a schedule of taxpayers that must be added each year until 2024. In 2021, individuals and companies that register for amounts equal to or greater than $ 1,000 They must issue an electronic receipt for each transaction.

By 2022, individuals and companies with annual income between $ 200,000 and $ 300,000 will be added. In 2023, they will be those that register income between $ 100,000 and $ 200,000. Meanwhile, in 2024, individuals and companies with annual income from the previous fiscal year are equal to or greater than the amount contemplated for small companies and whose tax domicile is in Galapagos and that do not maintain establishments in continental Ecuador.

Small and medium-sized companies (SMEs) in Ecuador are already required to issue this document since 2018 and 2019, respectively. For Martha Córdova, owner of a small company that sells soaps and body essences, at first this requirement was an imposition, but she affirms that now that she uses the electronic invoice, she sees many advantages.

“There is a reduction in mobility costs, ease of operation because I can do it from a mobile phone and prevent transactions or sales from stalling“, He says. In addition, it speeds up the delivery of the document to your clients.

According to the Directory of Companies and Establishments of the National Institute of Statistics and Censuses, as of 2020, 846,265 companies were registered in Ecuador. The vast majority of them are SMEs.

For the financial consultancy Paola Aulestia, the fact that this system has not yet become widespread, especially in SMEs, responds to “fear of change, digital and the belief that it is expensive.”

“Online already has codes, prices recorded and preparing an invoice can take up to 5 seconds. On the other hand, in filling the booklet more time is spent and in going to leave the client even more and mobilization. All that generates costs”, he says.

Even, adds the specialist, taxpayers who are in the new Simplified Regime for Entrepreneurs and Popular Businesses (Rimpe), which will come into effect from 2022, will also be required to bill electronically. The rimpe will be applied to businesses and ventures with income from $ 0 to $ 300,000.

The Rimpe, ‘a mix’ between RISE and RIM, generates expectations for its early entry into force

“There are entrepreneurs who are dedicated to marketing digital, freelance, remote work or natural persons who use the SRI’s own system to generate invoices, which is free. The only thing they have to cancel annually is the acquisition of the electronic signature”Says Aulestia.

In addition, electronic invoicing is a “formalization” of entrepreneurs, since it allows them to have an automatic record of their monthly sales and generate a history that, in the medium term, allows them to access loans in financial institutions.

“Many times entrepreneurs do not see this and that is why it is difficult for them to access credit, since they are in informality”, It indicates.

Another benefit is that electronic invoicing facilitates the monitoring and control of invoices. In fact, through certified platforms the issuance and reception of these documents can be monitored, which optimizes customer service and eliminates the risk of losing them, says Óscar Plaza, manager of Contífico, a company that manages accounting systems and that is powered by SIIGO.

“The billing and collection cycle is accelerated because the logistical times of printing, distribution and receipt of invoices are eliminated, improving the company’s cash register”, He says.

Electronic invoice is mandatory for the sale of hydrocarbon derivatives and biofuels

He claims that the pandemic forced many entrepreneurs to change the way they work. Teleworking was positioned as the first option and processes became automated and finding solutions according to what companies needed was a priority.

“Cloud solutions are the way for businesses to become more competitive and effective and take their management to another level; With such a system you can record the entry and exit of money, accounts payable and receivable, invoices or sales records, automate inventory management based on sales, and even deal with your SRI taxes online”, He maintains.

While electronic invoicing is beneficial, there are also risks to consider, says Aulestia. For example, a user can issue invoices to record an unreal increase in their sales. “This can be mitigated in other ways”, such as greater controls by the competent entities.

Although the SRI to mitigate the risks of fraud, verifies the origin and integrity of the invoice and the corresponding signature.

Apart from the invoices, the documents that can be issued electronically in Ecuador, according to the SRI, are:

• Settlement of purchases of goods and provision of services
• Credit notes
• Debit notes
• Withholding vouchers
• Reference guides

For the issuance of these documents, you can choose your own issuance systems or use the free tools provided by the SRI.

What are the requirements to access the issuance of electronic vouchers in Ecuador?

• Access code to SRI online
• Registered debit agreement
• Be “up to date on your obligations”
• Digital certificate of electronic signature obtained with RUC
• Software that generates electronic receipts (they can be the free tools provided by the SRI or a taxpayer’s own system). (I)