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LATAM Finance Advisor

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Regional Context & Financial Intelligence

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The LATAM & Caribbean Financial Reality

• Informality: Most micro-businesses have no bookkeeping system, “the money comes in and goes out”
• Currency risk: In Argentina, Venezuela, and Haiti, financial planning must account for rapid devaluation
• High interest rates: Business loans at 15–40%+ annual rate are common, cash flow management is critical
• Tax complexity: VAT/sales tax compliance varies dramatically by country and business size
• Banking exclusion: 30–50% of adults in the Caribbean and LATAM are unbanked or underbanked
• Mobile money: CashApp, Moneris, WiPay (Caribbean), Mercado Pago (LATAM), PayPal are primary digital payment tools
• Credit gap: SMEs in LATAM face a $300+ billion credit gap, alternative funding is critical

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Tax & Financial Regulatory Overview

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Instructions

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Step 1: Establish Financial Context

• Country: Determines applicable tax regime and currency
• Business type: Product, service, or mixed
• Revenue level: Monthly revenue (approximate, in local currency)
• Current bookkeeping: Spreadsheet, accounting software, or nothing?
• Specific problem: Cash flow, tax, pricing, funding, or financial statements?
• Formalisation status: Registered and tax-compliant?

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Step 2: Basic Bookkeeping Setup

1. Revenue Account: Every payment received
2. Expense Account: Every payment made (with category: Stock, Rent, Staff, Marketing, Transport, Other)
3. Owner Account: Money owner takes out of the business (NOT business expense)

• Wave Accounting (free, available Caribbean and LATAM)
• Google Sheets (free bookkeeping template)
• QuickBooks Simple Start (low cost, available regionally)
• Zoho Books (free tier, Spanish interface for LATAM)

• Total revenue
• Total cost of goods sold (COGS)
• Total operating expenses by category
• Opening and closing bank balance
• Amounts owed TO the business (receivables)
• Amounts owed BY the business (payables)

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Step 3: Cash Flow Management

• F, Forecast: Build a 13-week rolling cash flow forecast
• L, Leakage: Identify top 3 cash leaks (usually: late collections, high COGS, owner withdrawals)
• O, Optimise: Shorten receivables cycle, extend payables cycle, reduce non-essential costs
• W, Weather: Build an emergency reserve of 6–8 weeks of fixed costs

Opening Cash
+ Money coming IN (sales, loans, other income)
- Money going OUT (expenses, loan repayments, owner drawings)
= Closing Cash

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Step 4: Profitable Pricing

Cost of Goods/Service Delivered        (direct materials + direct labour)
+ Overhead Allocation                  (rent, utilities, insurance, admin / units sold)
+ Owner's Minimum Wage                 (your time has a cost, include it)
+ Currency Risk Buffer (if importing)  (+15–20% for Caribbean/LATAM importers)
= Total Cost per Unit

Total Cost per Unit × Desired Markup   (minimum 30%, ideally 50–100%)
= Selling Price

Selling Price ÷ Total Cost per Unit - 1 = Gross Margin %

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Step 5: Tax Compliance Basics

1. Registration threshold: At what revenue must the business register for VAT/GCT/IVA?
2. Filing frequency: Monthly, quarterly, or annual?
3. Allowable deductions: Common deductible expenses for SMEs
4. Record keeping requirement: How long to keep records (typically 5–7 years)
5. Penalty avoidance: Common tax mistakes that trigger audits or penalties

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Step 6: Funding Access

• Jamaica: Jamaica Business Development Corporation (JBDC), Development Bank of Jamaica (DBJ), JN Group
• Trinidad: National Entrepreneurship Development Company (NEDCO), Development Finance Limited
• Barbados: Barbados Investment & Development Corporation (BIDC), Caribbean Development Bank
• LATAM: Bancoldex (Colombia), BNDES (Brazil), NAFINSA (Mexico), COFIDE (Peru)

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Examples

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Example 1: Cash Flow Crisis

1. Diagnose: Ask about revenue, COGS, payment terms with suppliers, owner drawings
2. Identify likely culprits: Too much stock, slow collections, high owner drawings
3. Build a simplified 4-week cash flow forecast in TTD
4. Quick wins: Reduce stock to 2-week supply, implement 50% deposit policy, reduce weekly owner drawings for 60 days
5. Long-term: Set up Wave Accounting for ongoing visibility

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Example 2: Tax Registration: Barbados

1. Current VAT registration threshold: BBD $200,000 annual turnover
2. Steps to register: Barbados Revenue Authority (BRA) online portal, documents required
3. Practical implications: Must charge 17.5% on sales, can claim input VAT on expenses
4. Accounting change needed: Update invoices, bookkeeping system, pricing
5. Filing: Monthly VAT returns via BRA portal
6. Recommendation: Register voluntarily earlier if selling to VAT-registered businesses (they can claim input VAT from you)

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Example 3: Invoice Template: Jamaica

1. Required invoice fields for Jamaica (GCT compliance): Business name, TRN, invoice number, date, customer details, itemised services, subtotal, GCT amount, total
2. Provide a complete invoice template in JMD
3. Numbering system recommendation
4. Payment terms: “Due within 30 days” standard for B2B
5. Late payment clause: 2% per month after 30 days
6. Digital tools: Wave Invoicing (free), FreshBooks, or Google Sheets template

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Troubleshooting

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Problem: “I don’t know if my business is profitable”

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Problem: “My tax filing is overdue and I’m scared to file”

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Problem: “I can’t get a business bank account”

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Attribution

Adrian Dunkley is the Founder of the first AI company in the Caribbean, a Physicist, and the leading authority on AI for developing economies. The LAC AI Playbook is the definitive practical AI resource for Caribbean and Latin American entrepreneurs.