Baffled by Brazil - Learn How SAP's Global Trade Services Team Provides Support For Unique Processes in Brazil

Linda McKee, Senior Director, SAP

LEARNING POINTS SAP offers solutions for doing business in Brazil Electronic invoicing in Brazil affects virtually every transaction SAPs Nota Fiscal Eletronica solution provides compliance, integration and automation

RETURN ON INVESTMENT Leverage existing investment in SAP solutions to support Brazilian requirements Pre-built integration reduces implementation and maintenance costs Standard processes reduces costly customization

BEST PRACTICES Automate manually intensive processes Leverage pre-built integration to reduce costs Use of standard solution from a best-in-class provider assures on-going compliance

1. Introduction 2. Functional Overview 3. Highlights of New Features and Enhancements 4. System Landscape 5. Customer Success 6. Summary

Business in Brazil

Big

Beautiful
Baffling

Brazilian Compliance
Average hours per year a company spends to prepare and pay taxes

448

187 271

504

< 100 h < 200 h < 400 h < 1000 h < 2000 h > 2000 h

2600

Brazil is not just a bit more complex. Legal compliance is more than 10 times as cumbersome to achieve than e.g. in the US or Europe.

Source: World Bank Data 2010

Tracking Everything
Every movement of goods in Brazil requires government authorization Before shipping goods, invoice must be authorized Authorization must accompany shipment Before receiving goods, invoice must be checked for authorization Freight invoices must be validated Cancellations, corrections, operation acknowledgement/cancellation/ completionall reported as events to the government

How and Why?

Brazilian government introduced electronic invoicing, referred to as Nota Fiscal Eletronica, to assure every movement of goods and services is reported.
Why?

Tax revenue

Nota Fiscal Eletronica

In 2007, the Brazilian government issued Decree No. 6.022 Created the Digital Public Bookkeeping System, more commonly referred to as SPED (SISTEMA PBLICO DE ESCRITURAO DIGITAL) SPED has 3 major components:
Digital Accounting (ECD) SAP addresses the requirements in the localized-for-Brazil ECC First release was 2008

Digital Tax (EFD)

SAP addresses the requirements in the localized-for-Brazil ECC First release was 2009
SAP addresses the requirements through its GRC solution area, developed by Global Trade Services team as a standalone solution called Electronic Invoicing for Brazil. We just call it NF-e First release was 2008

Electronic Invoicing (NF-e)

Nota Fiscal Eletronica

In 2007, the Brazilian government issued Decree No. 6.022 Created the Digital Public Bookkeeping System, more commonly referred to as SPED (SISTEMA PBLICO DE ESCRITURAO DIGITAL) SPED has 3 major components:
Digital Accounting (ECD) SAP addresses the requirements in the localized-for-Brazil ECC First release was 2008

Digital Tax (EFD)

SAP addresses the requirements in the localized-for-Brazil ECC First release was 2009for this session is NF-e Focus
SAP addresses the requirements with a standalone solution called Electronic Invoicing for Brazil (typically referred to as NF-e) First release was 2008

Electronic Invoicing (NF-e)

NF-e - A GRC Solution

1. Introduction 2. Functional Overview 3. Highlights of New Features and Enhancements 4. System Landscape 5. Customer Success 6. Summary

NF-e Benefits
Enables companies doing business in Brazil to meet electronic invoice requirements established by the government Supports compliance with the trade and tax regulations Automates manually intensive processes Minimizes incorrect transactions Facilitates communication and collaboration with all supply chain partners

NF-e and Sales - Outbound

Companys Localized ERP GRC NFe
Create XML

Government Systems

Digital Signature

Sales Order

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

Billing Document Nota Fiscal Eletronica

NF-e Status To ERP Government System Status to ERP

SEFAZ

Nota Fiscal

SCAN

DANFE
XML

Shipment

NF-e and Purchasing - Inbound

Companys Localized ERP
Purchase Order
Nota Fiscal Eletronica

Supplier
Sales Order Billing Document Nota Fiscal
XML

GRC NFe
Nota Fiscal Eletronica
PO Data
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

DANFE

Government Systems
SEFAZ

G/R Invoice

Nota Fiscal

Trigger Invoice Creation

NFe Automation and Compliance

Key features
Compliance with NFe and CTe regulations Automated issuance and management of outbound NF-es
Digital Signature and Validation Batch Creation
Digital Signature Check Authorization Validation

Automated handling of inbound NF-es Notification to Vendors electronically

Automated triggering of back-end transactions Events management

Outbound NF-es

NFe Communication Management

Status Monitoring and Updates

Inbound Delivery Creation DANFE Receipt Quantity Validation

Automated contingency (SCAN)

Inbound NF-es

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 Marcos Mazarin IT Invoicing, which responds perfectly to the demand
Manager SA Merck

Example of Integration
NF Receiver
ERP
Provide PO Data SAP NFE 10.0 Receive and Check Inbound Nfe XML Assign PO Simulate Invoice

SEFAZ
Check Authorization

GR, IR Check Create Inbound Delivery

Trigger/Check Inbound Delivery Receive DANFE Compare DANFE to XML Post GR for Inbound Delivery Create Invoice and Nota Fiscal Check Planned vs Actual Quantities

Pre-built integration to SAP ERP

Vendor/ Issuer
Receive Acceptance / Rejection Notification

Trigger GR and IR Postings

1. Introduction 2. Functional Overview 3. Highlights of NF-e 10 Features and Enhancements 4. Solution Landscape 5. Customer Success 6. Summary

Outbound Capabilities
Outbound NF-es
Layout 2.0 Includes contingency, cancellation and skipping Status check Automated use of SCAN contingency ABAP Digital signature Batches BADI for enhancements (Re)send XML to Business Partners Allow user actions also from the NF-e 'Overview'

Automated Handling of NF-es

Pre-defined process steps for standard purchase business processes Steps can be configured to be handled automatically by the system or allow manual review/action BAPIs provided to define customer-specific steps

Inbound Business Processes

Normal Purchase Order Stock Transfer Order Future Delivery
Invoice Goods Receipt

Returnable Packaging

Packaging such as barrels or pallets which must be tracked and returned to the vendor May be part of any of the Inbound Scenarios
Goods Receipt Invoice

Consignment

Subcontracting
Subcontracting, with receipt of only finished goods or finished goods and symbolic return of components Symbolic return of subcontracting components Return of subcontracting components

Example PO Process Steps

Freight Invoices (CT-es)

Inbound CT-e
Basic standard receipt and validation Customer-Specific capabilities

Outbound CT-e, including enhancements such as:

B2B Messaging Status Check Number Gap Skipping SVC: new Contingency System & Process Validation Archiving & Download Automatic retry after ERP Update Error Support of different versions Asynchronous CT-e Status Check

Additional Capabilities
Event Handling Electronic Correction Letter (CCe)
A document may now be added to an NF-e to provide additional information. This document is referred to as an event, and may contain any additional information related to an NF-e which is not tax relevant

Vendor Notification
Notify vendors electronically regarding status of their NF-e messages Both acceptance and rejection messages possible

Additional Capabilities
Ability to assign multiple NF-e items to same PO item Reports for Incoming NF-es:
Evaluation of rejected NF-e List of NF-es with missing/wrong PO item assignments

BADIs for Customer Specific Requirements

Automatic PO Assignment XML Validations NFe Simulation

Additional Capabilities
Fiscal Clerk Dashboard New Workplace for Inbound NF-e Synchronization with SEFAZ
Get List of Inbound NF-e from SEFAZ Check for missing documents (NF-e, Cancellation) Download missing documents Manage missing Operation Acknowledgement Events

New Workplace for the Gatekeeper

Scan documents (NF-e & CT-e) from truck Check entrance conditions (authorization, processing state) Trigger processing (if entrance allowed)

Additional Capabilities
NFe 10.0 supports the following events:
Operation Confirmation (since SP 11) Cancellation (since SP 12) New Monitor for Incoming Events (since SP 12) Operation Acknowledgement (since SP 13) Operation not accomplished (since SP 13) Operation denial (since SP 13)

NFe 10.0 also includes the following miscellaneous enhancements:

Enhance customizing for B2B Activation (CTe and NFe) Special treatment for temporary SEFAZ errors (108, 109) Display Protocol Information (nProt) in overview tables Signature Validation for 'old' certificates NFe on HANA NFe with CORBU Design NFe enabled to run with AEX (Java-Only-PI) new content delivered (since SP 13)

1. Introduction 2. Functional Overview 3. Highlights of NF-e 10 Features and Enhancements 4. Solution Landscape 5. Customer Success 6. Summary

System Landscape

Country Version Brazil

Delivered with SAP Electronic Invoicing for Brazil (NFe)

1. Introduction 2. Functional Overview 3. Highlights of NF-e 10 Features and Enhancements 4. Solution Landscape 5. Customer Success 6. Summary

Customer Success
. SAP Electronic Invoicing keeps our company on track by helping us manage the movement of our product through our port and across Brazilian state lines. Perhaps most importantly, though, SAP ensures we adhere to the latest Brazilian trade laws when moving goods within the country, and frees up a lot of resources that would normally be spent tracking and accounting for every sale we make.
Alex Sandro Tavares Barbosa, SAP project manager, Cosipa

. We evaluated the five principal solution providers in the market before selecting NFE 1.0. We searched for a solution that would offer complete integration with our current enterprise system, and at the same time strengthen and guarantee the stability to expand our business with quality and security
Rogrio Ribeiro, CIO, AstraZeneca do Brasil

Origen SAP NF-e Case Study

Business Case Overview

Baker Hughes required a NF-e solution to be compliant for Brazil operations. Baker decided to Summary utilize The SAP Electronic Invoicing for Brazil application in order to leverage SAP enterprise data and processes and decrease total cost of ownership. It became apparent that other areas of localization needed to be supported for on-going operational and compliance excellence.
Value Drivers Pain Points Unique Value Proposition

Reduced integration between NFe and backend SAP ERP Reduced manual effort to comply with legal mandate Reduced time and effort during audits Reduced Supply Chain Delays

Compliance with NFE mandate

requiring electronic filing for EVERY commercial transaction Integrating and automating invoicing processes to meet regulations while continuing to operate with efficiently Avoid disruptions 30+ Locations in Brazil

Only SAP provides comprehensive

compliance with electronic invoicing requirements for Brazil while maximizing the utilization of existing IT investments. Included ongoing support for evolving trade and tax regulation under the electronic public bookkeeping system (SPED) and legal books/taxation compliance

Key Features Focused on company selling goods (referred to as Outbound) Manage communication with government of invoices (NF-e) in XML Technical validation and digital signature of each message Governance of communication processes and statusing Enable processing when government systems unavailable (contingency) B2B integration w/ business partners to send/receive XMLs

Roadmap for (NFE) at Baker Hughes

Q1 2011

Q2 2012

Q1 2013
Tech Upgrade 10.0

SAP NFE 1.0 On-going Support

1. Introduction 2. Functional Overview 3. Highlights of NF-e 10 Features and Enhancements 4. Solution Landscape 5. Customer Success 6. Summary

KEY LEARNINGS SAPs Nota Fiscal Eletronica provides a standard solution to complex electronic invoicing processes in Brazil Leverages localized version of ECC to assure support for end-to-end processes Managing electronic invoicing compliance with an automated and integrated solution minimizes the risk of supply chain disruption

Thank you

Contact information:

Linda McKee Senior Direct, Solution Management Linda.mckee@sap.com

THANK YOU FOR PARTICIPATING

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