Small and medium-sized enterprises in Latin America are often considered “insufficiently creditworthy” by financing institutions. This affects the owners of innovative ventures, medical practices, restaurants and even businesses in the legal industry.
The main cause of this problem is that, in many cases, not 100% of sales are invoiced. Consequently, these businesses lack supporting documentation and become caught up in informal processes without even realizing it.
Another cause is the absence of a digital tool that would make tax and administrative processes easier for them to manage.
Business-management technology tools for the legal sector
Management technology tools for law firms have not been entirely suitable over the years. In fact, they have often been presented as overly complex solutions designed to meet the needs of a large multinational company, but not those of a newly established business, a family-run firm or an organization with only a small number of employees.
Most
accounting software, CRM platforms and other ERP systems have been designed for large corporations, so entrepreneurs in the legal sector regard them as oversized for their needs.
The price of these digital tools has also been a problem for such businesses, as it is often considered too high for a firm that may generate significant revenue but does not have a particularly complex internal structure, for example.
That said, the market for accounting, invoicing and payroll software applications for small and medium-sized enterprises—including those in the legal sector—has been explored in greater depth in recent years, with a focus on adapting products to the market.
Cloud-based technologies
A clear example is the
cloud-based technologies and
SaaS platforms that have emerged in the market. These can help law firms reduce costs because they record sales and expenses transparently and provide a complete picture of the company’s profits or losses.
Their fast and intuitive features also generate considerable time savings.
Anyone using this kind of software can easily complete administrative tasks, allowing them to focus on activities that may prove even more profitable for the company.
According to the study
“Access to Technology as a Driver of Productivity in SMEs,” conducted by administrative-software company
Nubox, Colppy and US consultancy Americas Market Intelligence,
Latin America’s technological advantages will determine the ultimate evolution of the continent’s small and medium-sized enterprises.
Tax returns: the greatest obstacle for businesses?
A World Bank survey of certain businesses in Latin America, including the legal industry, found that 31% consider
the burden of filing tax returns a major obstacle to conducting successful business in their markets.
And this is indeed the case: because many of them do not have a detailed understanding of tax matters, they operate informally without realizing it and misstate information, causing them to breach certain regulations.
This has therefore not been easy for the region’s governments to monitor.
Some countries see opportunities to regularize tax collection through electronic invoicing. Other government initiatives have included automating traditionally manual processes, such as signing documents and completing tax returns.
These regulatory initiatives have the ultimate goals of promoting a more formal economy, reducing fraud and increasing tax revenue. They undoubtedly also increase the productivity of organizations in every sector and encourage them to embark on a digital transformation that promises countless improvements.
- The cloud-based technologies and SaaS platforms that have emerged in the market can help law firms reduce costs.
Originally published by Nubox on the Lemontech blog
- Some countries see opportunities to regularize tax collection through electronic invoicing. Other government initiatives have included automating traditionally manual processes, such as signing documents and completing tax returns.
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