Sectorial Impacts from the use of E-Invoicing in Mexico - October 2016 by AMEXIPAC

Sectorial Impacts

from the use of E-Invoicing in Mexico October 2016

CONTENT Introduction

I. The study

II. Methodological appendix and the sample

III. Matrix of the economic benefits and processes for companies

IV. Characteristics of the companies of the sample

V. Analysis of the responses to the sectorial surveys

VI. Attitudes and degree of conformity of companies

1. E-Invoicing

2. Adoption of E-Invoice

3. Current operation

VII. General sectorial conclusions

1. Invoicing Volume

2. Invoicing Process

3. Accounting Processes

4. Audit process

5. Receipt of the E-Invoice

6. E-Invoice

VIII. Statistics of interest

STUDY LEADER Leonardo Zepeda

Leonardo Zepeda is a business consultant and lecturer in the fields of economy and finance. Has participated in the development of over 90 strategic business structuring with various objectives, from the planning, design and implementation of business strategies for various companies to the planning, design and implementation of public policies in the field of tax collection. The experience of Mr. Zepeda covers various sectors with particular emphasis on business models for banking, ICTs and more recently in the infrastructure sector. Mr. Zepeda has also served as Chief Economist and strategist for fixed income markets for Mexico in one of the largest banks with a global presence, and as economist for one of the most important Telecommunications companies. In addition to his experience as a consultant, Mr. Zepeda has executive experience in Leadership positions as head of financial areas in banks, in the tax and financial sector of the Federal Government of Mexico and for companies and corporations of the private sector in infrastructure and telecommunications. Leonardo has a Master in Business Administration with specialization in Global Banking and Finance from the University of Birmingham in England. He is a Candidate to the Chartered Financial Analyst by the CFA Institute and has a Bachelor in Economics from the Center for Research and Economic Teaching (Centro de Investigaciรณn y Docencia Econรณmica or CIDE for its acronym in Spanish), in addition to having taken various courses and specializations in the field of Taxes and Financial Mathematics both in Mexico, United States and the United Kingdom. With 16 years of experience, Mr. Zepeda has worked in business consulting for financial issues for various public entities and private corporations, in financial structuring and projects operations in both the public and private sectors and under the innovative scheme of Public-Private Participation. In recent years, Mr. Zepeda designs securitization mechanisms of infrastructure projects and works with enthusiasm in an academic research focused on redesigning the fiscal policy strategies applying evolutionary concepts of justice.

INTRODUCTION This study is based on the efforts of AMEXIPAC from over three years ago when the regulatory outlook of the E-Invoice in Mexico was in the middle of a revolution. At such time we performed a confidential and anonymous survey with hundreds of taxpayers to identify the advantages, and when applicable, disadvantages of the E-Invoice vs. the paper Invoice. Amongst the questions that the participants answered, they shared their volume of issue of invoices, rejection percentages, courier deliveries, storage costs, amongst others. They also provided us with details on their invoicing processes, which allowed us to calculate savings in time and resources from the adoption of the digital invoice. We learned from the voice of the taxpayers of the risk of paper issues, of the demands of the market for the digitalization of the business processes and the strengthening of the controls for fiscal compliance, which became available thanks to the use of the information technologies. Today, in light of the maturity of the digital invoicing model in Mexico, more than two years after 100% of the invoices in the country are E-Invoices and five years after the coming into force of the regulations that resulted in the current version of the digital internet-based CFDI, CFDI v3.2, we believe it convenient to detail the previous efforts to listen again to the voice of the taxpayers. This time, beyond the impacts of the use of the E-Invoice vs. the paper invoice, we intend to focus in particular on the analysis of the sectorial impacts that have stemmed from the use of the E-Invoice in the country. With the participation of companies belonging to the 14 key sectors of the industry in Mexico, which are cataloged according to the Industrial Classification System of North America, SCIAN 2013 in force to date, this study documents the special implementations of the E-Invoice in each sector, as well as the impact on the communication between the taxpayer and the fiscal authority, the opportunities and areas of improvement, and the efficiencies obtained from the digital fiscal evolution. Lastly, this study also analyzes those formalities relating to each sector that could benefit from its evolution to an electronic document. We hope that this study will be useful to our readers.

I. THE STUDY Companies affiliated to AMEXIPAC, distributed a survey created by the organization between 32 voluntary organizations in different sectors of the national economy. The identity of each company is confidential. The study has limitations in terms of its value and statistical representation due to the absent methodology for the selection of a representative sample. The results must be considered with caution. To obtain the conclusions that are presented herein, some statistical techniques such as tables of absolute frequency, ranges, mean, and percentages, among others, were used. The conclusions from the analysis of the replies in the surveys may be grouped into four main sections: 1. Matrix of the economic benefits and processes for companies 2. Analysis of the responses to the sectorial surveys 3. Attitudes and degree of conformity of companies 4. General sectorial conclusions

II. METHODOLOGICAL APPENDIX AND THE SAMPLE AMEXIPAC with the support of Value Edge created, tested and implemented the survey in question of which we took the task of consolidating the results, creating a database and interpreting them. We followed simple steps using technological tools to create the database of results to later proceed to its analysis. We had to organize each of the surveys received by assigning a specific ID. Once we had the consecutive IDs, we identified the questions with a descriptive header that encapsulates the meaning of each question. We proceeded to empty the replies of each one of the surveys to integrate this database. Subsequently we performed a cleaning of data because some replies had errors in the filling, unanswered questions, ambiguous answers. For each one of these corrections we made sure to include a remark on the reason for the cleaning of the same. To represent the replies to the survey and take into account their statistical limitations, we have created tables of absolute frequency, percentages, and in some questions that warranted it, we calculated ranges and the mean. For each question of the first section of the study, we organized the statistical results in a table by assigning to each data its corresponding frequency and the percentages in respect to the total. The absolute frequency is the number of times a particular value appears in a statistical study. With this representation and with the percentages we can create graphs to gain a better understanding of the results. The sample chosen for this study consists of 32 companies that are part of 14 different sectors of the national economy. For the following stages of the study, we have to broaden this sample according to a statistical methodology and include other sectors, since at least from 9 (according to the SCIAN classification), the results of these surveys will not reveal data.

The following image shows details on who many companies are part of each sector:

SCIAN classification

No. of survevs

Agriculture, breeding and exploitation of animals, forestry, fishing and hunting

Mining

Generation, transmission and distribution of electrical power, water supply and gas by pipeline to the end consumer

Construction

Manufacturing Industries

Pharmaceutics

Wholesale trade

Retail trade

Transport, mail and storage

Information in mass media

Financial and insurance services

Real estate and movable and intangible property lease services

Professional, scientific and technical services

12A

Professional, scientific and technical services

Corporations

Business support services and waste management and remediation services

Educational services

Health care and social assistance services

Cultural entertainment and sporting and other recreational services

Temporary accommodation and preparation of food and beverages services

Other services except governmental activities

Legislative and governmental activities, those relating to imparting justice and of international and offshore agencies.

It is important to describe in general terms how the survey is made up to understand how we have addressed the study of the results. The material allows us to identify the characteristics specific to the companies: their economic sector, how their share capital is made up, number of employees, number of branches, number of customers, their volume of Invoicing, amongst others. In this section there are open questions that do not establish categories for the responses and some other are categorized. It also includes diatonic questions, in which only two response alternatives are given (Yes and No). Afterwards, the survey seeks to know the situation of the companies before the implementation of E-Invoicing and after the same. It is built to describe the situation of companies in relation to their invoicing, accounting, auditing, receipt of invoices and technological implementation processes; based on the situation before and after the implementation of the E-Invoice. Its results permitted to interpret the economic benefits and procedures for taxpayers after adopting and using E-Invoicing. As in the previous section, open questions that are difficult to categorize, other diatonic questions, and finally certain categorized questions are included. The next section of the survey measures on a Likert scale attitudes and the degree of conformity of respondents with suggested statements. This allows us to put the opinion of the sample into context and with the organization in categories, to learn about the intensity of the feelings toward various statements with respect to E-Invoicing, the adoption of the latter and their current operation. The last part of the study that was analyzed without quantitative considerations, and was made up of open questions. These questions provides us more in-depth information with the inconvenience that the replies are hard to evaluate and subject to interpretation. We also faced with the problem that some of the companies surveyed, omitted completely filling out this section, so that the information will be incomplete. The next section of the study used a Likert scale to obtain the answers. They provided responses from 10 (fully agree) to 1 (strongly disagree) to determine the correlation between points in a survey, which cannot determine the causality. It is important to remember the Likert scale used to understand the graphs of the entire section.

III. MATRIX OF THE ECONOMIC BENEFITS AND PROCESSES FOR THE COMPANIES In this matrix we have grouped conclusions of the different sections that make up the study. We consider it relevant to the objectives of the study developed and disseminated by AMEXIPAC to create a table of easy understanding that groups the economic benefits and processes for the companies. The construction of this matrix was based on the analysis of the situation that was experienced by the organizations at two different points in time; before and after CFDI.

Benefit

Type of benefit

Impact

Reduction in the cost of sending invoices by courier

Economic

Low

Lower staff dedicated exclusively to the invoicing process

Economic

Medium

As of CFDI, the number of people that are employed in the companies for the invoicing process decreased, which is a cost reduction.

Increased use of ERPs

Processes

Medium

The use of an ERP increased after CFDI, although the percentage of companies that had such a system was already high. Using an ERP improves the management, control and use of information within an organization, for which the increase in its implementation was considered beneficial.

Improvement and definition of the invoice validation processes

Processes

High

Expense reduction in annual payments made to the printer for invoices

Economic

Medium

The estimated time of receipt of invoices on behalf of customers

Processes

High

The estimated time of receipt of invoices on behalf of customers changed considerably after CFDI, the E-Invoice has improved the delivery time of the document.

Less time to recover accounts receivable

Economic/ Processes

High

The estimated recovery period of accounts receivable after CFDI decreased considerably. While it is true it could not be solely due to this factor, the companies collect their receivables faster.

Decrease in staff dedicated exclusively to accounting

Economic

Low

Description The E-Invoice has significantly reduced the percentage of invoices sent by courier, which is an indication of cost reduction. The result is inconsistent with those of another section of the survey, where a change with regard to the expenses of the organizations is not shown in annual payments made for sending invoices via courier, comparing the situation before and after CFDI.

After CFDI, the invoice validation process has improved, which is a significant improvement in administrative and control processes of the organizations. In addition, they already have established defined validation processes.

A greater number of companies spends on the printing of invoices a small amount, however according to the results of the survey, the economic benefit is medium.

One hand the number of people employed for accounting activities grew in the smallest range, but decreased for the largest range. We can conclude that there is an economic benefit after CFDI but with the information included is not attributable solely to E-Invoicing, we must consider it as a factor.

Benefit

Type of benefit

Impact

Economic/ Processes

High

After CFDI fewer companies have a greater number of employees for this function.

Decrease in staff dedicated exclusively to auditing activities

Economic

High

The companies have reduced the need for staff dedicated exclusively to audit activities after CFDI.

Less staff dedicated exclusively to the classification of invoices issued

Economic

High

Fewer people devote their time exclusively to classify invoices issued after CFDI, which saves costs and time to devote to the business activities.

Development of an internal invoice validation service

Processes

High

A greater number of companies developed an internal service instead of hiring an external one. The development of an internal invoice validation service allows companies to increase their validation percentage, with fewer staff required for this activity. However, this implies a monetary and time investment for the institutions.

The E-Invoice has enabled organizations to focus more on areas of business value

Processes

High

After CFDI companies have been able to devote more staff and resources to activities that generate value for their organizations.

Improvement in response times of the administrative area

Processes

High

The majority of companies increased the efficiency of the response times of the administrative area of their business after CFDI.

Better response time and relationship with the fiscal authority

Processes

High

The companies in all the sections of the study seem to agree that the relationship with the fiscal authority has improved, fewer visits are required and response times have increased.

Decrease in staff dedicated exclusively to the classification of invoices issued

Description

IV. CHARACTERISTICS OF THE COMPANIES OF THE SAMPLE • We can see that the 63% of the companies surveyed are of exclusively national capital and only 38% have foreign capital. • The size of the organizations in terms of number of the employees ranges from a minimum of 1 employee up to a maximum of 100,000 workers, with a mean of 4,315. • 58% of the companies have between one and fifty branches, while 32% do not have any. • The company with the fewest clients has 18 and the one that has the most has 1,200,000 and there are three important ranges in percentage. 34.62% of respondents have between 101 and 500 customers, 23.08% have between 5,000 and 1,200,000 customers. The range between 1 and 50 clients has 15.49% as well as the range of between 501 and 1000. • The majority do not have a registration number in the register of importers and exporters. • 63% of companies finds rules fiscally even without it being mandatory, while 37.5% of the organizations prefer not to do so. • 71.88% have an internal tax area and 68% also have an area of internal Information Technologies.

V. ANALYSIS OF THE RESPONSES TO THE SECTORIAL SURVEYS The following conclusions were obtained after reading, reflecting on analyzing the responses that were submitted by the companies to the open questions of the survey. We will organize our comments by economic sector. The section to analyze is divided into two parts. The first seeks to know particularities of the economic sectors in the adoption of the E-Invoice. The key moments on which we intend to gather information are the operational panorama in the world of paper audit, the migration to the E-Invoice and the current operation of the companies 5 years after the adoption of CFDI as sole invoice standard in Mexico. The second part of the section seeks specifications relating to each sector. It seeks to obtain responses from special applications that related to the economic sectors that have started or bolstered the use of the E-Invoice. It also seeks information regarding communication with the authority, areas of improvement, efficiencies or missing impacts to develop from the continuity of the use of the E-Invoice. Finally, with a vision of the future, it looks for potential impacts from digitalizing documents that are exchanged with the authority.

A. SECTOR 5 Manufacturing Industries

The experience of the three analyzed companies in this sector has been positive with regard to the change E-Invoicing. The companies consider that the tendency is to reduce the use of paper, which has become obsolete. However, one of the companies does in fact believe that it is important to manage stationery for the operation. The migration to the E-Invoice has allowed them to save on time and deliveries. They do not indicate any conflict as a result of the migration, although they believe that acceptance to the change is still low and clear specifications that are communicated to all areas of the companies are missing. Five years after the adoption of CFDI as sole Invoice standard in Mexico, the operation of companies according to the responses has been affected by the change of rules of the fiscal authority. They believe that there is an exaggerated control of the information by the Government, and that the Ministry of Finance shall eliminate errors and streamline mechanisms. Although the question was looking for special features of the sector, they did not mention any point in reference to the same. The companies of the manufacturing industries sector noted that they have experienced savings in the communication with customers and suppliers. The use of mail as the method for exchanging information with banks has increased. One of the companies pointed out that the exports have become faster and more agile. With regards to the communication with the fiscal authority, there is a widespread belief that it has improved and increased, especially for queries due to confusion. The report to the authority is much more constant. There are details that still need to be reviewed with accounting firms. The areas of improvement as a result of the continuous use of the E-Invoice are diverse from the point of view of the companies in the sector. Some of the points that have pointed out is that the structure of the Invoice should no longer be modified. It is further believed that governmental systems are still slow, with failures in the system, so they have a margin of significant improvement in their electronic platforms. The study group of the sector of manufacturing industries considers that there are other documents in the flow of information with the fiscal authority that still have to be digitalized. Amongst them are the import and export declarations and the check policies. They believe that if other documents are digitalized, there will be impacts on the time and the clarity with the authority. It has an impact on the training of the staff of the company whenever there are changes.

B. SECTOR 5A Pharmaceutics

The organizations in the sector believe that the paper trend is about to disappear, as increasingly more digitalized documents are recognized by regulatory and tax authorities. One of the companies surveyed noted a complicated operational picture of the sector in the acquisition of inputs from areas that are not economically developed, especially in field operations due to the lack of technological infrastructure and knowledge of the operations. The migration to the E-Invoice was not so simple due to the lack of clear specifications in particular within the companies. They consider the transition model to be right, although improvable since the authority has made excessive additions of fiscal requirements and has made a decision to accelerate the process and exert pressure on those who still are not aligned with the electronic platform. Five years after the adoption of CFDI as sole invoice standard in Mexico, the companies believe that it has become an agile, secure, stable and efficient process. However, they noticed that there is potential to be applied in other areas of the activity, such as in Customs. The companies noted that there are special uses and applications that are directly related to the sector, which have initiated or been bolstered by the use of the E-Invoice. The supplementation processes of the Customer-Supplier commercial cycle for the issue receipt, greater control of the company through electronic systems. One of the companies pointed to the use of addenda to link the information from these with process areas in their companies, such as one of the applications. The relationship with the fiscal authority has improved. The visits to the authority have decreased. The communication is more assertive and has more contact with taxpayers. However, the companies feel that by having all communication via the internet, the relationship has become null in a direct manner. Some of the improvements that the study group of this sector has proposed is the improvement of the site to view the information and to be able to download it in Excel and that the authority is able to perform queries of receipts and thus avoids requesting printed documentation from the taxpayers for return, compensation, and auditing processes, amongst others. They indicate other documents of the flow of information with the tax authorities that should be digitalized. They pointed out the bidding processes for the procurement areas and the information of foreign trade. The impact of the digitization of other documents shall be the investment in time and economic resources to adopt new processes. Processes will be simplified, even when they mentioned the vulnerability of electronic information as a risk.

C. SECTOR 6 Wholesale trade

We only had survey within this sector, and therefore the opinion is from a single entity and cannot be considered as the generalization of all companies within the same. No opinion was expressed on the paper invoicing, but they described the process of migration to the E-Invoice as gradual and it was perfected over time with regards to the validation mechanisms. They believe that the E-Invoice has contributed to lower costs for the distribution of the invoice, immediate responses of acceptance or rejection of the receipts, better collection processes and tasks. The migration to the E-Invoice achieved to reduce the risk of generating or receiving false or outdated documents or those that do not meet the scheme, which put at risk the deductibility of some expenses in the event of reviews of the authority. Some improvements they suggested to the Tax authority is using the electronic documents (XML) to conduct reviews with taxpayers, as the PDFs are still being requesting in in-person reviews, which could discourage the use of the model. Answers with respect to other documents to be digitalized for the flow of information between the authority and the taxpayer were omitted, as well as the impact that this would have.

D. SECTOR 7 Retail trade

The paper invoicing are in decline due to savings in costs and to the ease in the validation of the E-Invoice for the companies of the sector. The migration process was considered relatively easy, however again as in previous sectors, they believe that the amendments are too often, which makes it a little more complex. One of the companies points out that one of the reasons that in the end facilitated the process was E-accounting. The current operations 5 years after the adoption of CFDI as sole invoice standard in Mexico has had improvements with its maturity, it has become an easy to use and practical model, which has benefited customers, suppliers and companies in security and transparency. Some special applications that have been bolstered is an information manager, electronic receipt of the employee and on income. However, from the four companies surveyed two did not notice relevant changes in the uses or applications specific to the sector. The relationship with the authority is noted with fewer problems and with more automated processes. Some proposed improvements as of the continuous use of the E-Invoice is not having to undergo changes so frequent, the speed of the system in the internet, and develop a constant validation of invoices issued. The sector proposes some additional documents to be digitized to be digitized of the information flow with the tax authorities. They proposed electronic rulings, collection and payment of invoices, as well as electronic transfers. The impacts of the digitalization of these documents would be considerable with regards to the costs, but positive in the long term with better controls and processes.

E. SECTOR 8 Transport, mail and storage

The companies of this sector did not issue considerations with respect to the current situation or the operational panorama in the world of paper invoicing. In this sector the migration was considered much more complicated than in the other sectors. A long process due to the line of business of the companies and with exceptional cases. It also took a long time to enter a stabilization phase due to the constant changes in requirements and improvements. However all companies of the sector that were surveyed, agree that after the migration process things have worked in a better way, with faster and simpler processes. In the considerations of the sector references are made to uses or special applications that have been initiated or bolstered with the use of the E-Invoice. The verification and the training to obtain the receipts immediately has been bolstered, the payments to vendors with direct information of their system to schedule payments without the need to audit them, and a physical management of the receipts to which little time is devoted. They coincide with the companies of the previous sectors in that that communication with the authority is more active, has improved and has become much more practical. From their point of view, there are areas of improvement, such as having greater clarity in the new requirements of the fiscal authority, adjustments to have the actual information they want to obtain and an enhanced version of CFDI to mobile devices and which is more up-to-date with the technological trends in the world. Some documents they propose to digitalize are the tax reports, open letters, non-tax or custom documents and other areas on the issues of migration, permits, agricultural aspects, common law, etc. The impact that in their opinion the digital migration of the documents would have are time savings to focus on business activities, and quick and timely information. Finally it was suggested that when digitalizing additional documents, a virtual identity could be created to perform all kinds of procedures and queries.

F. SECTOR 10 Financial and insurance services

The companies of the sector deem the paper invoicing was obsolete. There was an excess of physical documents that required storage space. Performing searches or queries were tedious activities. The control was more complicated. There were difficulties for the validation of documents and an excessive need to establish controls for the issuance and folios. In general they agree that the management and preservation of information was difficult. The migration process generated changes within the companies and was difficult due to the adaptation to change of going from printed to electronic invoices. With regards to the current operation, the characteristics that are mentioned most often among the companies in the sector is the reduction of time spent in the generation, search, reporting and sending of the information; with greater control and cost-savings. Some uses or applications directly related to its economic activity that stemmed from the use of the E-Invoice by the companies in the sector are: control of the issuance of invoices and efficiency in the collection processes with the automation of systems, communication with suppliers and customers, better control in the search and finding of invoices. The communication with the authority is more efficient and simpler from the perspective of the companies of the sector. The visits to the offices of the authority have decreased. They are faster in their response times and have a better interaction with respect to questions answers. With regards to improvements, efficiencies or impacts still to be developed from the continuous use of the E-Invoice, the companies of the sector suggest reducing the constant amendments and improvements on behalf of the authority, in addition to making them more understandable, they also noted that the access to the websites should be facilitated, without requiring as many updates. In addition, one of the companies commented that there are still delays from some customers and suppliers in training in order to achieve a completely digital exchange. They did not point out specific documents that should be digitalized from the flow of information with the fiscal authority. However, the impact of the digitalization noticed in general within the study group of the sector, was the optimization of resources, greater degree of detail and easy review and validation of documents.

G. SECTOR 11 Real estate and movable a nd intangible property lease services

With regards to paper invoice, in this sector we find a specific feature. In the real estate sector, paper invoice ceased to be used only in the service areas, other transactions still require paper backups. The migration to the E-Invoice was not considered to be difficult due to the specifications of the SAT. However, they also consider that there have been many changes through time. With regards to the current operations, they believe that E-Invoice has contributed to a better management of invoices. No specific applications or uses were mentioned for the real estate sector. They consider that the communication with the authority has improved and has become easier through this scheme. Some areas of improvement of the E-Invoice that the sector proposes, is to improve the issuance and receipt of documents amongst customers in order for it to be more transparent and automatic. They would like to see other documents digitalized, in particular the contracts entered in the various entities that are customers and the real estate agencies, which are not yet digitalized by the type of process. They note that this issue does not generate impacts with the fiscal authority but with other entities.

H. SECTOR 12 AND SECTOR 12A Professional, scientific and technical services

In this sector unlike others, the companies seem to agree that the use of paper invoice is still important. They consider that the adoption of the E-Invoice was not so simple, but in the end it has yielded results by facilitating the audit, and they identified as a problem that the technological systems still do not function 100% and in addition are slow. The current operation has been benefited with E-Invoicing. It improved collection and administrative times, has been good for business, but they suggest improving in validation. A beneficial use they identified and which is not only for their economic activity but widespread, is that the customer receives the invoice in his/her mail immediately. The second one was that the customers and suppliers are charged and the invoice is obtained automatically. With regards to the communication with the fiscal authority as of E-Invoicing, the businessmen believe that it has improved but not significantly. They requested as possible improvements that a site is added to download the CFDI. They would like other documents to be digitalized, such as the payment receipt for their customers and the fines or permits. This would result in positive impacts, such as the control and management of information in a timely manner, greater control in what has already been paid and what has not, quickness in the search for information. However, they believe that getting used to new documents takes time to adapt.

I. SECTOR 15 Educational services

The sector considers in general that the operation with the E-Invoice has significantly improved the management of information, security and timeliness of the same, paper savings, reduction in costs. However, a point to be considered is that they mention that it is still necessary to print paper since some companies request it to store the documentation for less than 5 years. The migration to the E-Invoice is regarded as very complex from the start due to so many changes in requirements, lack of knowledge of the new processes, and that in principle many companies and establishments depended on a supplier, who was authorized by the SAT and generated bottlenecks due to not having more options. Once the invoicing was adopted, they feel that it has been easy. While the organizations of the sector consider that they are still adapting to the scheme, they believe that the current operation has improved with savings in human and material resources. However, they acknowledge that the methodology is still changing, therefore the adaptation continues. They suggest as specific uses or applications that have started as of the E-Invoicing for their sector, the immediate charging of customers and payment in exchange for an Invoice. The use of information technologies has increased in their companies. The communication with the authority for the sector has become faster and more direct. For the sector, there are areas of improvement as pre-defining a single scheme, source and template that allows suppliers and customers to have a single scheme and does not generate conflicts in the use of the Invoicing. They also noted that bulk downloads of the XML files in the SAT should be enabled. This sector does not propose new documents to be digitalized of those that are exchanged with the fiscal authority.

J. SECTOR 16 Health care and social assistance services

From the sector be only obtained one survey. In the same the failed to answer the first part. They did not provide any answers regarding the panorama for the world of paper invoice, on the migration to the E-Invoice and its current operation. They believe that with the E-Invoice they started using sites that receive and validate E-Invoices and perform the verification of expenses online. They did not forecast changes in the relationship with the authority. The improvements mentioned were that the general population already knows that neither paper nor images are necessary, only the RFC. They do not believe that are other documents of the flow of information with the authority need to be digitalized. They believe that the impact of the digitalization has been a greater control of the captive taxpayers, while the rest of the population remains without paying.

K. SECTOR 18 Temporary accommodation and preparation of food and beverages services

From the answers we could perceive that with the implementation of the E-Invoice people have grown accustomed to issuing the invoice and scheduling certain times at which they may perform the invoicing. They did not included responses to the operational panorama of the sector in the world of the paper invoice and their experience with the electronic migration. The company surveyed in this sector stated that it is looking for a solution (application) to simplify the E-Invoicing process so that the people responsible for invoicing may perform other activities. They believe that their relationship with the tax authority has not been altered since they have not had any requirements. As areas of improvements they noted that in their case the invoicing is manual, therefore they require a system that minimizes the activities of the people who carry them out. They propose to create a digital solution the customer access, that is to say, automatic invoicing.

L. SECTOR 19 Other services except governmental activities

For this sector the paper invoice scheme required more people focused on the process of preparing, delivering and providing support on the same. This scheme has become obsolete because everything has changed to the electronic scheme. With regards to the migration to the E-Invoice, it was pointed out that the process had implications in operational processes and information systems. One of the companies required 6 months of consultancy. The current operational situation has improved. The companies are certain that the information in the ERP matches the information of the E-Invoices, improving in the control of the portfolio and invoicing. In addition they already have an automated operation and continue the standard day to day. They believe that there are multiple applications for the sector, although they do not provide many examples in this regard. They note that a large part of the processes have been automated, they physical and courier service deliveries of statements of account have been canceled and they underwent a digital transformation. With regards to the communication with the authority, they believe it to be fluid. They propose some improvements as of the continuous use of the E-Invoice. They proposed that the fiscal authority should provide a general repository of invoices where the customers can download the receipts, and thus passing the responsibility to the customer. They expressed their wish for the customer contracts to be digitalized, which would result in easier information exchange processes.

M. SECTOR 20 Legislative and governmental activities, those relating to imparting justice and of international and offshore agencies

In this sector it is noted that paper invoice is still necessary because there is no unification in the laws. One example that has been mentioned is the Law on Procurement (Ley de Adquisiciones in Spanish). The migration process was considered simple, they believe that there was no reluctance, however training was required, which took 3 to 4 months. Currently the operation has changed, since the issuance and receipt of the new process has improved time and accounting costs. The new culture of the digital receipt was adopted in its entirety also in the expense accounts and the duplicates are controlled. The communication with the authority has improved in the opinion of the companies in the sector although in some aspects it has become more complicated. However, they did not specify which these complex points are. They believe that certain electronic documents in their agencies should be standardized and rules should be amended to eliminate or reduce the use of paper. They believe that there is an opportunity of digitalizing other documents that are exchanged with the fiscal authority. They did not point out other impacts because they believe that everything is already handled electronically.

VI. ATTITUDES AND DEGREE OF CONFORMITY OF THE COMPANIES In this section we have grouped of the executive summary all those questions that were evaluated using the Likert scale. This scale allows us to measure attitudes and know the degree of conformity of the study group with various proposed statements. The measurements of attitudes must be interpreted by the reader as "symptoms" and not as "facts".

1. E-INVOICING • Companies regard paper receipts as obsolete but to some extent still see them as indispensable. • The majority of the organizations agreed with the statement that E-Invoices are perfect substitute of the paper receipts. • In general the study group fully agreed with that E-Invoice has the same validity as paper receipts. • In general the companies consider that E-Invoices are easier to use than paper receipts. • E-Invoices can be perceived as less expensive than the paper receipts.

2. ADOPTION OF E-INVOICE • In general, the adoption of E-Invoice was perceived as a simple process. • The adoption of E-Invoice was considered by the study group as not expensive. • The companies considered that the adoption of the E-Invoice has facilitated the operations of the enterprises. • In their majority, the study group considered that the adoption of the E-Invoice reduced costs of operation of the businesses. • They considered that the adoption of the E-Invoice has facilitated the control tasks of control in businesses.

3. CURRENT OPERATION • The companies appear to be very familiar with E-Invoicing. • The E-Invoice has enabled organizations of this study to focus more on areas of value of their businesses. • The E-Invoice has improved the collection times of the businesses. • The E-document has improved the response times of the administrative area in the business. • The response times and the relationship with the fiscal authority has improved with E-Invoicing.

VII. GENERAL SECTORIAL CONCLUSIONS This section of our summary, shows the relationships that exist between the responses of companies that are part of the same sector. The assessment of this information was carried out through open questions for which the measurement and comparison of the same is not a completely reliable method to come to a conclusion. The following pages contain the tables created to show the sectorial relationships.

SCIAN classification

5 Manufacturing Industries

Migration to the E-Invoice

Current operation 5 years after adopting CFDI as sole standard

Tendency to reduce the use of paper, which has become obsolete.

Positive experience, lack of acceptance of the change within the companies.

Better communication with customers and suppliers, savings in times and deliveries of the document. Affected by the constant changes of rules of the fiscal authority.

Pharmaceutics

Trend of the disappearing paper.

Was not so simple due to the lack of clear specifications within the companies. Excessive additions of fiscal requirements.

Agile, secure, stable and efficient process.

6 Wholesale trade

No opinion is recorded in this regard.

Gradual process that was improved over time with regards to validation.

They consider that costs have decreased, immediate responses of acceptance or rejection of receipts, better collection processes and tasks.

7 Retail trade

Its use has decreased.

Relatively easy process, however affected by constant amendments of the authority.

Has become an easy and convenient model that benefits customers, suppliers and companies in security and transparency.

8 Transport, mail and storage

No opinion is recorded in this regard.

The migration was considered a long process due to the line of business of the companies and with exceptional cases. It took a long time to enter a stabilization phase due to the constant changes in requirements and improvements.

The verification and training to obtain the receipts immediately has been bolstered, easy payments to suppliers and little time devoted to the physical management of receipts.

10 Financial and insurance services

Paper receipts are obsolete.

The process led to changes within the organizations, therefore the adaptation was not easy.

Decrease in the time spent on generating, searching, reporting and submitting information; greater control and lower costs.

Only paper receipts ceased to be used only in the service areas, other transactions still require paper backups.

Was not considered difficult, although they would have preferred less amendments from the SAT.

Has contributed to a better management of invoices.

11 G.

Paper receipts

Real estate and movable and intangible property lease services

SCIAN classification

Paper receipts

Migration to the E-Invoice

Current operation 5 years after adopting CFDI as sole standard

12 and 12A Professional, scientific and technical services

Paper receipts are still important.

Was not as easy, but in the end it has yielded results by facilitating the audit.

Has been benefited, better collection and administrative times.

15 Educational services

Consider that it is still necessary to print paper.

Very complex from the start due to so many changes in requirements and the lack of knowledge of new processes.

Improvements in the management of information, security and timeliness of the same. Paper savings and a decrease of costs in general.

No opinion is recorded in this regard.

The people have become accustomed to making the invoice and scheduling times to create it.

No opinion is recorded in this regard.

Other services except governmental activities

Obsolete scheme.

The process had implications in the operational processes and information systems.

Best operational situation, the control of the portfolio and invoicing increased.

20 Legislative and governmental activities, those relating to imparting justice and of international and offshore agencies

Necessary because there is no unification of the laws.

Simple, but required training for months.

The new digital culture was already in its entirety and invoice duplicates are controlled.

16 Health care and social assistance services

18 Temporary accommodation and preparation of food and beverages services 19

SCIAN classification

5 Manufacturing Industries

5A Pharmaceutics

6 Wholesale trade

7 Retail trade

8 Transport, mail and storage

10 Financial and insurance services

11 Real estate and movable and intangible property lease services

Specific uses or applications of the sector

Communication with the tax authorities

Improvements, efficiencies or impacts to be developed