These states are making the move away from free e-invoicing software for several reasons, including the sheer difficulty involved in managing technology capable of meeting Brazil’s compliance requirements. As they do for companies, compliance measures have been forcing these governments into the business of change management, constantly updating and maintaining software, but now they are extricating themselves from the technological components of compliance. For example, states in Brazil would need to invest heavily to be able to handle the TSL protocol required under Nota Fiscal 4.0, and at least one so far (Sao Paulo) has decided not to make that investment.
A secondary, but equally important reason for states to eliminate the access to free e-invoicing software is risk management. The government does not want to be responsible for any errors or technical glitches that result in a company not meeting compliance requirements. Now, that burden will fall solely on businesses operating in Brazil. Businesses will need to ensure that they not only use the appropriate XML e-invoicing structure and correct submission protocols, but also that they have contingency plans in place in the event of transmission issues.
With the transition away from free software, it’s clear that state governments in Brazil have been facing many of the same compliance challenges that businesses do – most notably, constant change management and risk reduction. These governments are starting to realize that it’s too resource intensive to be in the business of compliance technology. Businesses are realizing the same. Those that have managed compliance internally are facing constant fire drills to update their systems with each regulation change, and are turning to intelligent compliance solutions that create efficiencies and minimize audit risk.
At Sovos, our clients have seen decreased costs, improved operations and reduced fines and penalties based on this Intelligent Compliance approach. Read our case studies to see how.