What is an EFO? – Detect these people

EFOS are a real problem in companies, since they threaten their economy and reputation, so organizations must be alert and take measures to avoid these people or groups. So, this article explains what is an EFO, what are its characteristics and what do they do with a company’s invoices. Likewise, it mentions how to detect them and how to avoid them, as well as the consequences of using an EFO.

What characteristics does an EFO have?

In the business world, there is a word that is gaining a lot of fame due to its importance in recent years. The word EFO consists of an acronym that is used to describe the work of a person. It is an activity in which invoices for purchases, sales and other types of fiscal documents are issued. However, the term has a negative meaning since said invoices tend to be false or do not have the due legality for documents of such magnitude.

An EFO is a person who is dedicated to issuing apocryphal or false invoices. In general, they are documents that do not correspond to a real operation. These types of invoices are very common, since conglomerates use them so that companies can carry out tax evasion of taxes. Its main drawback is that represent a problem for the economy and the finances of the country.

An EFO allows individuals and businesses to deduct expenses that do not correspond to actual operations. Thus, this kind of fraud can be carried out both individuals and companies who engage in this illegal activity. It should be noted that when it comes to EFO companies, they tend to have a more complex structure than EFO people, since they have more power and financial resources. Thus, this system has a network of accomplices, as well as fictitious companies with which they carry out their illegal activities.

In general, EFOs display certain characteristics that make their ID is possible or distinguishable:

  1. They work informally: The EFOs usually do not go to work in formal places in order to avoid raising suspicions, in addition, these people or entities tend not to register with the tax authorities.
  2. Issuance of false or apocryphal invoices: This is your main activity, so commercial invoices must be verified very well.
  3. Dummy operations: The operations simulation Commercial transactions such as fictitious purchases and sales is another of the activities they carry out, since this allows them to justify the issuance of false invoices.
  4. Use of shell companies: Fictitious operations are carried out between fictitious or ‘ghost’ companies, that is, corporations that only exist on paper.
  5. bank accounts on behalf of third parties: EFOs do not use their real names, documents, or accounts. In reality, they open bank accounts in the name of third parties and thus receive payments for their illegal activities. Usually, they tend to trick or bribe that third party into putting their signature on the documents.

How to avoid an EFO?

If you have a company and you want to avoid an EFO, it is important to follow some recommendations, as well as carry out good practices that will help reduce the risk of working with fake suppliers:

  1. Make a tax information verification supplier before closing a deal. It is important to check the registration with the tax authorities. To do this, consult the Tax Administration Service (SAT) database.
  2. Run a pre-investigation to verify the supplier reputation and market experience.
  3. Ask for the supporting documentation of operations commercial, such as contracts, purchase orders, invoices and payment vouchers.
  4. Set internal control measures such as periodic review of invoices received and the verification of the fiscal information of the suppliers.
  5. Use technological tools such as EFOS verifier from Bind Mexico, that allow verifying the validity of electronic invoices and detecting if the issuer is an EFO.

What are the EDOS and EFOS of the SAT and how to identify them?

He Service tax administration (SAT) is the tax authority in charge of regulating and controlling economic activities in Mexico. Thus, the SAT has a system for identifying and monitoring people and companies that act illegally, that is, those that issue false or apocryphal invoices.

For their part, they are known as EDOS to the Companies that Deduct Simulated Operations and EFOS to Issuers of False Invoices. TOYes, to identify the EDOS and EFOS, the SAT uses a system of tax information analysis and financial. In this way, it is possible to detect suspicious patterns and behaviors. In general, there are some signs that indicate that a person or company is an EFO or EDOS:

  1. Billing without real economic movement.
  2. employment of shell companies.
  3. They carry out commercial movements with entities that are in the blacklist of the SAT.
  4. They tend to repeat billing operations and invoice stamping.
  5. Use of false tax addresses or nonexistent.

How to detect EFOS?

On the internet there are technological tools such as applications that can be used to detect EFOS. Thanks to this, you can choose which one suits your needs and start using one. It is important that companies receive education on this subject and protect themselves from any illegal activity carried out by EFOS and EDOS in order to preserve their heritage, sustainable development and reputation.

manual verification

It is valid to do a manual verification of invoices in order to determine and verify the validity of an electronic invoice. To do this, you need to do a search on the list of operations. This tool allows you to check if the invoice is real or false, as well as if the issuer is registered with the SAT.

Bind Mexico EFOS Verifier

bind Mexico It is a company specialized in providing technological solutions in the management of business commerce. Among its solutions, the EFOS verifier stands out. This is a great tool that performs a detailed analysis of the data provided in the invoice and compares it with other information found in the database.

In addition to identifying EFOS, Bind México has other features that make the job of managing electronic invoices easier. For example, authentic bills and validate the tax information of the issuer, it also has a friendly and easy-to-use interface.

Automatic verification with Bind ERP

Similarly, there is a resource known as ERP, which is a tool with which it is possible to verify the validity of an electronic invoice and detect that it was written by an EFO. Here a system of artificial intelligence which proceeds to make an analysis of the fiscal and financial information of the issuer. With this procedure, the patterns and suspicious behaviors mentioned above are detected.

What are the repercussions of having an EFO as a provider?

If an EFO is a supplier to a company, it is possible for that organization to get into serious trouble and have serious repercussions. Well, when using false or apocryphal invoices in order to deduct expenses, companies can receive penalties from the SAT. The most common sanctions include fines, temporary or permanent closure of the company, and in extreme cases, even jail. In addition, the use of false invoices will negatively affect the reputation, so that the trust of customers and suppliers in the company will decrease. This is counterproductive because your sales and market position will decline.

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