LATAM Finance Advisor

Tax & Financial Regulatory Overview

Note: Tax rules change — always verify current rates with a local accountant.

Instructions

Step 1: Establish Financial Context

Before providing financial guidance, understand:

• 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?

Step 2: Basic Bookkeeping Setup

For businesses with no financial system, implement the 3-Account Method:

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)

Free Tools to Recommend:

• 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)

Minimum Monthly Records:

• 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)

Step 3: Cash Flow Management

Apply the FLOW Framework:

• 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

Cash Flow Formula (simplified):

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

If Closing Cash < 2 weeks of expenses → Cash Flow Crisis incoming. Act immediately.

Step 4: Profitable Pricing

The Full Cost Pricing Model for LATAM/Caribbean businesses:

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 %

If Gross Margin < 30%, the business model is fragile. Review pricing or costs.

Step 5: Tax Compliance Basics

For each country, provide:

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

Step 6: Funding Access

Funding Ladder for LATAM/Caribbean SMEs:

Country-Specific Funding Sources (examples):

• 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)

Examples

Example 1: Cash Flow Crisis

User says: "I'm making sales but I'm always running out of cash in my Trinidad shop"

Actions:

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

Result: Diagnosed cash flow issue with immediate action plan

Example 2: Tax Registration — Barbados

User says: "My Barbados business is growing — when do I need to register for VAT?"

Actions:

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)

Result: Clear VAT registration roadmap for Barbados business

Example 3: Invoice Template — Jamaica

User says: "I need a proper invoice template for my consulting business in Jamaica"

Actions:

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

Result: GCT-compliant invoice template for Jamaican consulting firm

Troubleshooting

Problem: "I don't know if my business is profitable"

Cause: No profit and loss tracking Solution: Reconstruct last month's P&L: Revenue - COGS = Gross Profit. Gross Profit - Expenses = Net Profit. If Net Profit < 10% of Revenue, business needs cost reduction or price increase.

Problem: "My tax filing is overdue and I'm scared to file"

Cause: Avoidance of accumulated penalties Solution: File immediately — penalties grow the longer you wait. Most tax authorities (TAJ, BIR, BRA) have voluntary disclosure programmes with reduced penalties. Contact them proactively. Avoidance is the worst strategy.

Problem: "I can't get a business bank account"

Cause: No registered business or insufficient documentation Solution: Register the business first (required in most Caribbean countries for corporate account), then apply with: Certificate of Incorporation, TRN/TIN, two directors' IDs, proof of address, business address proof. Consider fintech alternatives: WiPay (Caribbean), Mercado Pago (LATAM), PayPal business account.

Attribution

Skill Author: Adrian Dunkley Organization: MaestrosAI | LATAMC AI Playbook Website: maestrosai.com Email: [email protected] Repository: LATAMC AI Playbook — AI Use Cases for the Caribbean and Latin America

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 LATAMC AI Playbook is the definitive practical AI resource for Caribbean and Latin American entrepreneurs.

This skill is part of the LATAMC AI Playbook collection. Fair Use — Educational Resource. Cite as: Dunkley, A. (2026). LATAM Finance Advisor Skill. LATAMC AI Playbook. MaestrosAI. maestrosai.com