Much has happened since RADIAN’s public presentation on November 25, 2020 , when, together with the DIAN directives and the President of Colombia, the large-scale roadmap of what was intended to be the path for what is called “Social Factoring” and publication of the “resume” of any invoice that would be discounted in the country.

Today, already located in mid-2022, progress has been made in: Pilots, resolutions, validations with the different players and an official release of the system, which although it could have had a better deployment in the media like its original launch, is since last July 13, generating real implications on the invoices that are in circulation in Colombia.

Now , are all companies developing the roadmap defined by the different resolutions, decrees and other legal guidelines associated with the RADIAN system and its derived processes? The DIAN assumes that the answer to this question is affirmative and that for all companies, both payers and providers, the process has already been internalized since 2020 and in 2022 the respective event reports are being submitted to the new system.

Companies that are only now finding out about the existence of RADIAN should take measures to catch up as soon as possible, taking into account that the implications of not reporting events on their invoices to said entity will represent negative impacts.

Understanding RADIAN

Before going on to specify any of these, it is key to understand two major components of the new mechanics that RADIAN presents:

1)Before reading this system as the virtual space where I can have traceability of the invoices that are discounted in the Colombian market, the mandatory and determining point of first converting all invoices into Title Valor (TV) must be understood, not only for the tax implications of the issue, but because if they are not TV I will not be able to use them for prompt payment operations. This is how RADIAN, under its latest resolution, requires the reporting of the 3 events : Acknowledgment of receipt of invoice, Acceptance of good or service and Acceptance of invoice.

2) Once point 1 is passed, the subsequent events directly associated with prompt payment operations are displayed and whose main objective is to provide transparency, control and options for those who want to participate in the Factoring ecosystem.

As can be seen, the initial step of converting invoices to TV is key in the materialization of factoring operations, however, its non-conversion not only has negative implications for invoice discounts, but also:

• Companies that do not convert their invoices into TV will not be able to use these documents in their statements to be presented to the control entity, representing a strong impact on cost and expense deductions.
• In the event of a possible dispute over an invoice in question, it is crucial that it be TV first, otherwise any allegation in this regard will be seriously compromised.
• Impacts on the liquidity of companies that usually discounted their invoices, but now if they have not converted them to TV first, they will see a major impediment to alleviating their cash flow.

The system, despite being in the stabilization phase, is already officially generating an impact on companies. It is now key that they focus their efforts on giving continuity to the process or on catching up, if until now they have found RADIAN on their path .