Written by Richard Cornelisse and Robbert Hoogeveen


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If the aim of your organization is full VAT automation of AP and AR, it is important to have a clear understanding of your material risks at hand, and your lowest performing processes in order to define the functional specifications for a solution.

The first step is to understand what exactly makes standard SAP not functioning optimally from an Indirect Tax perspective. Only then it is possible to validate whether companies’ objectives can be achieved with upgrading standard SAP functionality and/or implementing a tax engine?

In our article “Case study: cross-border chain transactions and the weakness of Standard SAP” we made the core weaknesses of Standard SAP visible using a case study. 

We explained amongst others that for a correct VAT determination of a cross border chain transaction the VAT relevant data of company code A and B has to be linked real time as Standard SAP itself is only processing a transaction within one specific company code. That means a helicopter view is needed to make that happen.

This is only possible if tax logic is based and generated on a higher SAP’s hierarchy: Client Level combined with implementing the basic tax rules into the logic. Client level includes all the company codes working on the same SAP platform.


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Questions to ask before you commit


If you know the underlying weaknesses of SAP, your own indirect tax risk areas that exceed your company’s risk appetite and your underperforming processes, it is important to get a clear understanding whether or not solutions that are available in the market are actually closing the spotted gaps.

The following is a non-exhaustive list of questions that could be raised during tax software vendor selection. For readability we use ‘Solution’ to refer to the product of the respective tax software vendors.


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Written by Richard Cornelisse and Robbert Hoogeveen


Fast adoption of technology
Add-on for SAP offers high-quality data for tax managers and
lowers work pressure for the IT department


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Compliant tax software solutions for the global management of tax processes


In essence, HRMC’s increases its expectations towards large businesses with regard to a more and more transparent tax management strategy. However, the publication of a tax strategy will clearly not be sufficient. It is just the starting point for the provision of a clear picture about the risk management and controls in place of tax relevant processes. The daily management turns on the radar.


State-of-the-art tax compliance management software is required.


In difference hereto, the view into the current daily practice provides a different and non-compliant picture:


Widespread use of Excel spreadsheets, decentralized storage of tax relevant documents, lack of documented controls, lack of automation, global lack of tax compliance software tracking individual changes and filings, lack of standardized reports immediately available upon request, lack of in-built double-checks for the calculation of current and deferred taxes on reporting entity level, lots of tax relevant data stored at external outsourcers (e.g. external tax advisors and accounting firms), several tax software tools in place at various locations which are neither interfaced among each other and with the ERP systems in place, etc.


It is obvious that tax departments which are not adapting its process management to the requirements addressed by HMRC and other tax authorities may struggle with regard to compliance, efficiency and transparency.


Therefore, compliant tax software solutions for integrated tax management like the U² software from Universal Units become more and more important


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