Colombia changes to the billing model for e-invoicing

With the UBL 2.1 e-invoicing mandate of the Colombian tax authority DIAN, the country switches from the reporting model to the billing model for the electronic invoicing on August 01, 2019. The transition period is set for one year. Thus, Colombia follows the example of its neighbors Brazil and Mexico.


What is the difference between the reporting and the billing model?

Within the current reporting model, DIAN validates electronic invoices within 24 hours of a transaction.

According to the new billing model, DIAN must validate an invoice before a supplier sends it to a customer. Companies must use the XML protocol UBL 2.1 to submit invoices for validation. Without confirmation from DIAN, the supplier cannot charge the buyer for the goods and the buyer cannot receive a shipment that has an impact on the business processes of AR, AP and logistics. The new model validates the invoices in real time, requiring system-level integration between the ERP system and the business transaction management software such as P2P (Procure-to-Pay) or Order-to-Cash systems.



This change will have a profound impact on companies doing business in Colombia. Companies currently billing electronically must go online by 2 November, 2019. For companies that do not yet issue electronic invoices yet, the implementation date will depend on their ISIC code and the group assigned to them in the calendar issued by the DIAN. The first phase begins on August 1, 2019 and runs until August 1, 2020. For all companies though, the subject of compliance must increasingly be in the foreground of their ERP considerations.


Which changes accrue from the billing model?

The change to the billing system is accompanied by the following requirements:

• Obligation to notify DIAN of all electronic invoices, credits and direct debits.
• The reports are displayed synchronously: Every invoice, credit or direct debit must be reported and validated by the tax administration.
• The new standard XML format defined by DIAN is UBL 2.1.
• The DIAN no longer authorizes the use of PACs for the audit process! The DIAN is the only body involved in the receipt, validation and authorization of invoices, credits and direct debits.
• Each electronic invoice must be accompanied by the consecutive number series authorized by the DIAN, the CUFE and the digital signature.
• The new validation fields, the integration of CUDE for credits and direct debits, the date and time of the validation and the validation certificate are now combined in one document to pre-validate the electronic invoice.
• The presentation of the PDF of the electronic invoice must contain the corresponding QR code.
• The emergency process must comply with the standard set by the DIAN in the event of a system failure.
• Electronic billers must receive a proof of delivery (acknowledgment of receipt).
• Documents must be kept for 5 years.


How does the billing model affect the change to SAP S / 4HANA?

The new e-invoicing mandate in Colombia reminds SAP once again that compliance must be at the heart of digital transformation efforts and migration to SAP S / 4HANA.

This applies in particular to the central financial system with which financial information is to be consolidated. An SAP system designed to deliver a much-anticipated single source of financial data can only function smoothly if it incorporates changes in compliance with global e-invoicing regulations, such as the Colombia mandate. Ideally, this happens in real time, because changes like those in Colombia happen regularly, quickly and worldwide without much notice.


How must compliance be secured?

Compliance issues are currently often resolved from country to country, leading to the following disadvantages:

  • High cost of building, monitoring and maintaining different systems
  • A separate system in each country only blocks the data consolidation that is required for SAP S / 4HANA

What SAP customers need is a solution that facilitates continuous compliance across the world. Ideally, country-specific mandate changes must be made automatically in a single system. As a result, the development of new e-invoicing solutions must focus on compliance.


These regulatory changes could affect your business with view to customizing or support of your ERP/SAP system. Please contact us to learn about possible necessary reactions to the changes – we are happy to assist you!