As in most countries, complying with the myriad of federal, state, and local regulations and their reporting requirements can be very challenging-and Mexico is no exception.
If a foreign entity creates a company in Mexico, it will receive a tax identification number called an RFC. The Mexican company must file monthly and annual tax returns with the tax authorities to stay in compliance even if the company is not yet generating any income. These reports also need to be based on Mexican Financial Reporting Standards.
Tetakawi uses customized accounting software in Mexico to provide its manufacturing clients and partners with premium accounting and tax support. This ensures that they stay current on their reporting requirements so they can continue to reap the many benefits Mexico offers to foreign entities as well as to avoid unnecessary and potentially onerous penalties for noncompliance.
The types of accounting and compliance support most manufacturers request include:
- Payment and reporting of monthly, quarterly and annual taxes
- Reconciliation of bank statements and currency exchange calculations
- Processing of accounts receivable and accounts payable
- Ensuring account balances and cash flow are adequate to cover expenses and operating costs
- Preparation of financial statements
Outsourcing accounting and compliance responsibilities lets a company focus on its core business, while the Mexican partner tends to the many fiscal and report details.
After all, you don't want hard-earned funds to be siphoned off to pay fines that could have been avoided when they could have been used for more productive purposes or reinvested into your company.
Simplified Processes Available With a Qualified Accounting Partner
In addition to meeting regulatory requirements and avoiding penalties for noncompliane, having a local partner who is intimately familiar with accounting practices in Mexico will make a manufacturer's operations run much smoother other ways as well.
Vendor and supplier accounts will be kept current and invoices verified for accuracy. Business in Mexico is built on trust and long-term relationships. If you want to do business there, it's important to stay on good terms with your accounts.
Solid accounting practices will also keep your payroll systems running smoothly. Not oniy does information need to reported to the authorities in a timely manner, but employee satisfaction and motivation can suffer if they aren't paid accurately or on time. This in turn could have a direct impact on productivity.
Lowering Your Exposure and Enhancing Reputation
Accounting figures feed into the reporting done to various agencies. If the numbers are innacurite, a manufacturer might be at risk of losing any number of benefits including lowered Value-Added Tax rates on certain imports and purchases and other benefits offered under Maquiladora, Manufacturing and Export Services Industry (IMMEX) program that was created by the Mexican government to attract and promote foreign investment.
A few of the other types of reporting required in Mexico include:
- Financial, tax, pricing, foreign trade relationships, and other details to theMexican Tax Authority (SAT)
- Details about payroll paid to SAT with supporting documentation
- Monthly reporting to the National Institute of Statistics and Geography about the value of imports (raw materials, packing, VAT of finished goods, etc.)
- Identification of exports and sales to the Office of Economic Affairs
Tetakawi maintains tight control over the finances and related reporting for its clients and partners to show government officials that the company is trustworthy and to preserve the special benefits and privileges granted to manufacturers moving to Mexico.
Take the time to investigate your options and consider outsourcing your administrative functions to Tetakawi. In doing so, you can be confident that your best interests are being managed properly.