Last month, Sovos sponsored the annual VAT & SAP Summit in London, a leading event for VAT and SAP specialists alike.
The conference focused on the increasing complexity of VAT in all areas. This was highlighted by many of the speakers presenting solutions within SAP and beyond to optimise VAT processes. Over the two days, we collected 5 key take-aways for you.
- VAT Process Improvement is Becoming More Important Than the Process Execution Itself
Process execution of preparing and filing returns can be a vicious circle when departments are ill-equipped for the increasing complexity of VAT in many multinationals operating in Europe. The pressure of staying compliant and delivering returns within deadlines also poses its own difficulties, but if processes are not set-up to facilitate a workflow that eases those challenges, many companies end up struggling unnecessarily. Gaining time efficiencies is key with fast turn-around times that are required and one cannot skip essential steps like in-depth analyses.
- You are No Longer Limited to the Competencies of Your ERP System for VAT
SAP like many other enterprise systems, are fantastic facilitators for smooth business processes, but is not without limitations. VAT logic and set-up are a continuous effort that requires valuable time and the involvement of IT specialists if trying to manage the process with the ERP alone. Constant rate and rule changes mean that this is an endless process that does not always deliver flawless results.
- Centralisation Helps to Optimise Processes
One of the largest VAT organizational trends is the move to centralise VAT processes either in-house or in Shared Service Centres. Not only can this shift improve efficiency, but also ensures that compliance is handled in one location, and by one well trained team, which can dramatically improve compliance and visibility for VAT directors. Process improvements are therefore much easier to implement and control.
- Improving Data Means Improving Overall Compliance
Data gathering for many is one of the biggest challenges, because gathering data is time consuming and multiple extracts/reports may need to be combined to receive all the data required. Using technologies that enhance the data extraction capabilities will therefore vastly improve efficiency and data integrity. The latest developments in VAT automation enables users to directly adjust and amend errors within the tool, which saves additional time, instead of having to change the master data before continuing to create reports.
- Leaders Automate
Research highlights that the companies which are most effective and efficient with their VAT process already have a technology solution in place to aid process improvement and mitigate risks. On the other hand, a large percentage of multinationals are still using manual processes that are error prone and do not deliver sufficient audit proof. This creates a significant risk for the future, given ambitions of tax authorities to automate their own audit process that will require companies to submit electronic audit trails.
Sovos Compliance at the VAT & SAP Summit
Sovos led a learning lab and an educational case study presentation. The learning lab focused on how to improve data extraction in SAP and cut processing time by up to 70%, while offering insights into how our capabilities, with SAP, offer the ability to capture a wider set of data in one report that captures data from over 200 modules in a fraction of usual data extraction and processing time. By having not only financial data available, but also other data sets such as logistical and sales data, analyses can be created that provide a much clearer picture of the VAT situation. Therefore, accuracy is significantly improved as mistakes are highlighted and easily corrected within the application.
Our presentation was headed by our VP of Product Development EMEA, Jeroen Wensveen. Jeroen demonstrated a case study featuring one of our Fortune 500 clients that have successfully moved their VAT processes to a Shared Service Centre using our VAT automation software together with SAP. He explained how faster, in-depth data extraction and analysis have helped our client to overcome various SAP related challenges and how they have achieved long-term process optimisation. The case study is a great example of the Sovos commitment to not only creating returns like many other providers, but the importance to improve the whole compliance process end-to-end for the long-term success of our clients.
Overall, the conference was a fantastic event providing attendees with the ability to meet industry leaders, while learning how enterprise level VAT technology can work together and compliment an existing SAP platform to improve efficiency and overall VAT compliance. If you are looking to learn more about VAT and ERP alignment please also read our recent whitepaper on this topic or sign up for our newsletter and blog for all types of relevant VAT updates in the European Union and beyond.