Sun Chemical consolidates its global tax obligation with Sovos
case study
Sun Chemical
Sovos made multinational reporting simple for Sun Chemical, allowing it to consolidate its compliance efforts.
Summary
Business Challenges
Sun Chemical sought to find the right solution to minimise the impact of changing mandates on 24/7 business operations.
The company needed to address language barrier among local and technical teams.
Solution
Sun Chemical needed a platform that could consolidate its compliance efforts across all its Latin American markets.
Benefits
The Sovos Business to Government regional solution minimises business delays and disruptions for 24/7 operations.
It offers local support in Spanish, English, and Portuguese, eliminating the language barrier issue.
Without the constant need for legislative monitoring, the Sun Chemical team can focus on innovation.
The Company
Sun Chemical is the world’s largest producer of printing inks and pigments. With more than $3.5 billion in annual sales, the company is a leading provider of materials to packaging, publication, coatings, plastics, cosmetics and other industrial markets in 56 countries. Sun Chemical operates 24 hours a day, seven days a week, and has hundreds of multinational suppliers and partners from around the world.
The Challenge
Sun Chemical cannot afford business disruptions or shipping issues due to its operating schedule. Its e-invoicing process must be seamless across throughout the process, including SAP configuration, middleware performance, connections to the local authority’s compliance server, and printing.
Because of e-invoicing mandates in Latin America, Sun Chemical faced the challenge of conducting constant legislation reviews to determine new requirements that needed to be converted into the system. The language barrier also posed a challenge. With technical requirements being communicated in local languages, fluency to understand the mandates and to convert changes into the system was required. For parties without a high level of technical proficiency in the local language, this caused lag time and confusion, contributing to reduced efficiencies.
The Solution
Based on individual compliance needs, Sun Chemical initially elected to implement different solutions in each country. In Argentina, it selected the regional Sovos Business to Government Reporting solution to maintain its compliance platform. In Chile and Mexico, it selected two separate local providers with two different models, and in Mexico, it implemented an internal solution. Get in touch with our experts for your compliance journey.
“Change is happening, but we’ll automatically solve it with the [Sovos] solution. Converting a legal requirement in a local language into a configuration plan is very complex, so the service of automatic updates to the new legislation was a clear key point of help for us.”
Aldo Magenes
SAPAnalyst, Sun Chemical
The Benefits
The metrics showed a large production support advantage in Argentina, where Sun Chemical had implemented the Sovos Business to Government Reporting regional platform. The company elected to expand its partnership with Sovos to cover its operations in Chile, Mexico and Brazil as well.
The Results
With local support in English, Portuguese and Spanish, the Sovos Business to Government Reporting regional platform helped Sun Chemical isolate its compliance problems and focus on driving business results. The Sovos solution alleviated the need to monitor every single change and translate each of those changes into system configuration plans, saving the team valuable time and reducing the risk of penalties.
Why Sovos?
Sun Chemical evaluated each of its four Latin American e-invoicing compliance solutions with a series of analytics measuring cost and benefits. Company leaders knew the internal team’s time was best spent on innovation and improving business and customer relationships, so they were looking for the solution that would minimise delays and disruptions and keep the team focused where it mattered most.
Real-time processes and responses required by mandates impacting business operations
Limited IT resources to monitor and implement requirements
Solution
Brown Forman selected Sovos’ Business to Government regional reporting platform for:
Brazil Nota Fiscal
Mexico CFDI
Mexico eContabilidad
Benefits
Seamless integration with SA
Constant monitoring and support has resulted in zero business disruptions
Ability to redeploy resources to core business functions
Need for ongoing SAP upgrades and IT burdens eliminated
The Company
Brown-Forman is one of the ten largest spirits companies in the world, distributing products in more than 160 countries. Based in Louisville, Kentucky with offices across the globe, Brown-Forman manufactures iconic brands such as Jack Daniels, Southern Comfort and Woodford Reserve.
The Challenge
International expansion has been integral to Brown-Forman’s success, but this growth strategy placed a great demand on its IT team. The company’s SAP systems needed to comply with the constantly changing financial legislation around the world, and e-invoicing mandates threatened to exceed the Brown-Forman IT team’s bandwidth. This was especially a concern in Brazil and Mexico, where the company operates nine facilities and regulations change frequently.
Demanding real-time processes and responses, any e-invoicing oversight in these countries would affect both the finance and supply chain teams, and could significantly impact business operations.
The Solution
With limited in-house IT resources to monitor and implement each country’s fiscal requirements, Brown-Forman needed a solution that would help it adapt to the ever-changing Latin American landscape and also integrate into its single global instance of SAP ERP.
Given the extensive scope of its operations in Latin America, Brown-Forman realised that it needed a specific subject matter expert. In addition, the company required a predictable cost structure during its heavy expansion.
“Because Sovos provides the network upgrades as well as the SAP ERP configurations, we have been able to work with one vendor across multiple countries and confidently manage the changes to Brazil’s Nota Fiscal and Mexico CFDI’s legislation.”
Randy Isdahl
Director, SAP Process Architecture at Brown-Forman
The Benefits
Sovos provides Brown-Forman with constant monitoring and support, ensuring no compliance-related business disruptions. Plus, the Sovos solution seamlessly integrated within Brown-Forman’s existing systems, allowing the company to manage multi-country compliance directly within its internal SAP system.
The Results
With Sovos e-invoicing compliance in place, Brown-Forman was able to redeploy resources to core business functions, including account receivables and account payables, and focus on supply chain and logistics enhancements. In addition, the partnership has eliminated the ongoing SAP upgrades and IT burdens caused by the constantly changing e-invoicing regulations.
Why Sovos?
Brown-Forman selected the Sovos eInvoice and eAccounting regional solutions to simplify its compliance efforts in Brazil and Mexico. The company sought a solution that could help it cut down on human resource capital and technology investments, and Sovos’ SaaS platform allowed it to accomplish that goal.
W.R. Grace eliminates the burden of ERP maintenance with Sovos
case study
W.R. Grace & Co.
Sovos relieved the burden of managing SAP modifications and maintenance internally for W.R. Grace & Co., allowing the company to focus on its global expansion initiatives.
Summary
Business Challenges
Multiple on-premise solutions
Difficult to support due to lack of subject matter expertise
Unbudgeted updates to SAP as a result of changing country requirements
Solution
W.R. Grace selected the Sovos Business to Government Reporting regional platform to manage compliance for:
Brazil’s Nota Fiscal
Mexico’s eContabilidad
Benefits
Regional platform works seamless with SAP
Changing regulations can be implemented with no business disruption
One system of record means no inconsistencies in government reporting
The Company
W.R. Grace & Co is a global leader in chemicals and materials, offering innovative products, technologies and services that improve their customer partners’ products and processes in over 150 countries around the world. Grace employs approximately 6,500 people in more than 40 countries.
The Challenge
W.R. Grace had to take a hard look at how it was managing the complex and demanding compliance landscape in Latin America. Each Latin American country in which Grace was doing business had previously implemented a different on-premise e-invoicing mandate. These various requirements and the frequent changes in the compliance landscape were causing multiple business issues across the organisation, including:
A need to patch each solution per constant changes in business-to-government regulations
Unbudgeted and unplanned efforts to update SAP with every country change
The Solution
Ultimately, the impact of this complex technology infrastructure was resulting in higher maintenance costs and increased exposure to business shutdowns should any of their e-invoicing solutions go down, prompting the company to seek a regional solution across Latin America. One of Grace’s top requirements was a regional platform that would work seamlessly with SAP ERP.
“We selected [Sovos] because they provide a single platform to handle our regional requirements including Brazil Nota Fiscal and Mexico CFDI. Their solutions are specifically tailored to multinationals managing a global SAP ERP landscape.”
Srini Vanga
Director of Enterprise Applications, W.R. Grace & Co.
The Results
The power of on-premise integration with the cloud eliminates the burden of managing SAP modifications and maintenance internally. The added benefit of SAP now being the system of record for reporting back to government dramatically reduces the risks and costs of compliance with local regulations throughout Latin America.
With the everyday burden of complying across Latin America resolved, Grace can now focus their internal resources on global innovation instead of constant regional changes to SAP.
Why Sovos?
W.R. Grace evaluated its options and eventually selected the Sovos Business to Government Reporting regional platform to help with e-invoicing regulations, starting with Mexico and Brazil.
The Sovos cloud platform offers a simplified compliance landscape for Grace, allowing changes in regulations to be implemented faster, with minimum business disruption. Daily process support and government integration within SAP eliminates the need to allocate resources to proactively monitor and respond to each country’s regulatory changes.
More than six months ago the Greek authorities announced their intention to introduce mandatory e-invoicing and e-bookkeeping rules, and enough information is now available to assess what the proposed rules will mean for Greece.
Although formal legislation has yet to be published, it’s expected the new e-invoicing measures by the Independent Public Revenue Authority, the Greek authority responsible for all tax matters (AADE; in Greek, “ΑΑΔΕ”), will be mandated by January 2020.
The Director of AADE recently stated that e-invoicing is incomplete without e-reporting, so the proposed rules must encompass both areas of tax compliance. By January 2020 the goal is for reporting to occur in real-time at the same time as the invoice is issued. The new rules would make e-invoicing and e-reporting mandatory, with a real-time connection from the invoicing system (by transmission of all relevant invoice data) to the electronic system (TaxisNet) of the Greek tax authorities.
Scope of reform
e-invoicing
So far, no real action has been taken regarding the implementation of the new e-invoicing system, e.g. the e-invoicing process, e-invoice format requirements and the software systems to connect to the tax authority have not yet been defined. However, the Ministry of Finance recently published a Decision establishing certification requirements and describing the certification process and responsibilities for e-invoicing service providers, who would be able to perform services of issuance, delivery and archiving on behalf of the taxable person.
Real-time reporting
By comparison, more progress has been made for implementing real-time reporting. AADE has published the technical specifications for transmission of invoice data – however, the scope of the reporting framework covers other tax as well as invoice data – e.g. income tax – to the government portal (TaxisNet) and invoice data will need to be reported on a daily basis (instead of periodically as currently). These technical specifications apply to the connection from the so-called Greek “electronic fiscal devices” – which is the most commonly used compliant method for issuing (and ensuring integrity and authenticity of) B2C invoices in Greece – to TaxisNet, as well as the data transmission software operated by e-invoicing service providers.
For B2B invoices, whose integrity and authenticity can be guaranteed by any method of the EU Directive, no technical specifications have been published yet. Further clarification and legislative action by the tax administration is required. Details about service providers’ software systems and the government infrastructure are expected to be finalised by mid-2019.
Until the implementation of the new reporting framework whereby invoice data will be reported in real-time at the same time as the invoice is issued, AADE is working on the alternative that invoice data will be reported on a regular basis by the issuer only, and not the buyer, which should minimise the overall reporting workload and ensure uniqueness of data. The buyer will be able to amend the relevant reporting field on TaxisNet where there is insufficient invoice data from the supplier.
B2G transactions
On 29 October 2018 the Government published a Bill to transpose the Directive 2014/55/EU on e-invoicing in public procurement; it however still needs to be approved. The Bill makes e-invoicing mandatory for both the supplier and the buyer/government in public procurement scenarios as of 1 April 2019.
Opportunity for structural change
AADE has clearly stated that mandatory e-invoicing would be incomplete without some type of combined transactional reporting; data should be created once and not several times as is currently the case. Therefore, we expect a type of “clearance” e-invoicing model in Greece, however at this stage it’s still too early to categorise the reform as being similar to Italy (“real” clearance e-invoicing) or more like Hungary (real-time reporting as soon as the invoice has been issued). Clearly, Greece is in line with the EU paradigm shift towards increased governmental control over transactional data and recognises the benefits of tighter tax compliance and in taking steps to close its tax gap.
Even if the new measures aren’t particularly welcomed by many individuals in Greece – much in the spirit of a well-held opposition against EU austerity measures which have led to riots and social unrest in the past – these new measures are well positioned to provide the Greek tax administration and government with an opportunity for structural change. The use of technology will enable more effective tax controls and enforcement as well as a more efficient tax environment for business, leading to a positive knock-on effect for future restructuring and rebuilding of the Greek economy.
Take Action
Find out how Sovos can keep companies compliant with e-invoicing regulations in Greece and around the world.
Companies struggling to meet Italy’s electronic invoicing deadline of January 1 will get some relief from financial penalties if they can’t immediately issue invoices at the moment of supply, but it seems the Italian Tax Authority will not delay rolling out the system.
The government had stated that invoices that did not comply with the new mandate after January 1 would be subject to penalties ranging from 90 to 180 percent of the applicable tax. The tax authority will consider invoices not correctly formatted or not issued through the new SDI reporting system to be non-compliant.
But many businesses, especially smaller firms, have had trouble transitioning from their existing processes to the new e-invoicing framework that requires real-time e-invoice clearance through the state-operated Sistema di Interscambio, or SDI, platform.
In response to business concerns, the government is opening up to a grace period of sorts: Instead of postponing the e-invoicing roll-out as such, Italy will waive penalties for delayed clearance transmission. Furthermore, as of July 2019, Italy will loosen the main rule for when an invoice must be issued, which effectively will allow businesses more flexibility in the e-invoicing process.
Businesses get a grace period for Italian electronic invoicing penalties
The new rules on penalties allow for a short grace period. The tax authority will not apply penalties for e-invoices that are issued and cleared by the SDI within the VAT liquidation period to which the invoice belongs – in other words, by the 15th of the following month in which the invoice should be issued and consequently cleared (according to Decree n. 100 from 1998, updated in 2018). For e-invoices that the SDI issues and clears by the end of the following VAT liquidation period (usually the end of the following month), the tax authority will reduce the penalty by 80 percent.
For example, if a business can’t transmit invoices in compliance on January 1, it can delay the clearance transmission of an invoice that should have been issued to February 15 without any penalties for the delay. If the business still needs more time, it can delay the clearance transmission of invoices through the SDI until March 15 and pay an 80 percent reduction of the regular penalty.
Italy eases timing of electronic invoicing issuance
Italy is also loosening its requirement for the timing of issuing an invoice. Since 1972, Italian VAT law has stated that suppliers must issue invoices to the government at the point of supply. However, beginning in July, suppliers will be able to issue invoices through the SDI platform within 10 days of supply. Invoices not cleared by SDI are not valid for fiscal purposes, so taking 10 days to issue an invoice could cause delays in receiving payment.
For companies doing business in Italy, the relief is welcome, but it is also a sign that Italian e-invoicing is moving forward on schedule. That means companies with Italian operations need to get their systems ready to comply with the new mandate or face penalties by mid-February.
Takeaways: What this means for doing business in Italy
What is also clear from the latest developments is that e-invoicing regulations in Italy can change at any time. The problem becomes exponentially more difficult to solve when businesses figure in similar changes happening all over the world. Adopting a system that automates e-invoicing and provides a single source of truth for data in both accounts payable and accounts receivable is essential.
Take Action
Sovos has been keeping companies in compliance in Italy for more than a decade. Find out how Sovos saves clients from penalties, cancelled shipments and other potentially expensive e-invoicing pitfalls.
By Andy Hovancik – President & CEO
Today, we announced the acquisition of Stockholm-based TrustWeaver to create a clear leader in modern tax software.
TrustWeaver has become a seal of approval for the world’s largest procure-to-pay and AP systems. This is a testament not only to the effectiveness of its e-invoicing software and integrations, but also to its ability to monitor and interpret regulatory change around the world.
With the acquisition, we are poised to do three big things together:
Create the first complete solution for global e-invoicing, handling both post-audit and clearance models in 60 countries.
Combine the talented teams that pioneered e-invoicing software — and in the process, shape the future of digital tax compliance worldwide.
Deliver a complete tax solution, including tax determination and reporting, in the world’s leading purchasing and AP systems, including SAP Ariba, IBM and Coupa.
We’ve reached a tipping point in modern taxation.
Governments are quickly adopting digital models to better collect every type of transactional tax, including VAT, GST and sales & use tax. As a result, businesses are faced with mounting complexity, rising costs and unparalleled risks.
Last month, the European Commission granted Italy permission to mandate e-invoicing, making it the first country in the European Union to do so. Italy’s move paves the way for rapid expansion of real-time, transaction-level reporting in Europe.
The game is changing
Here at Sovos, we’ve assembled the only solution capable of dealing with the complexities of modern tax, a complete software platform with global tax determination, complete e-invoicing compliance and a full range of tax reporting solutions including e-accounting and e-ledger.
TrustWeaver is our third e-invoicing acquisition in two years, and it’s one of the most important acquisitions in our history.
TrustWeaver has built up coverage across Europe, the Middle East, Africa and Asia Pacific regions, complementing our strength in Latin America. And, it adds support for “post-audit” compliance, including e-signatures in compliance with the eIDAS Regulation, which is an onerous set of standards for electronic trust and identification in Europe.
With the addition of TrustWeaver, we’re one step closer to our mission, which is to reduce the friction between businesses and governments so commerce can grow faster and communities can thrive by simply collecting the tax they’re already owed.
Royal Philips eliminated unnecessary manual infrastructure maintenance and improved its reporting process by implementing the Sovos Business to Government Reporting solution.
Summary
Business Challenges
Philips had over 140 legacy systems, which created a massive support burden and used substantial internal resources.
The company’s existing on-premise platform was due for a significant upgrade to process impending NF-e.
Solution
Sovos Business to Government Reporting replaced the outdated on-premise solution, eliminating the need to manually maintain infrastructure requirements.
Benefits
Philips saw an 80 per cent reduction in maintenance costs and a 25 per cent increase in employee productivity.
The company also enjoyed automation in its reporting processes, cutting down on necessary internal resources devoted to reporting.
The Company
Royal Philips of the Netherlands focuses on improving people’s lives through meaningful innovation in the healthcare, consumer lifestyle and lighting segments. Headquartered in Amsterdam, the company is a leader in cardiac care, acute care and home healthcare; energy efficient lighting solutions and new lighting applications; male shaving and grooming; and oral healthcare.
The Challenge
Philips’ global architecture and IT department is dedicated to providing innovation and support services to various business units throughout Brazil. However, its technology was already showing signs of obsolescence and creating a support burden as Philips’ 140+ legacy systems required extensive labour to complete routine annual maintenance. The problem was further compounded when Philips’ then-current on-premise system required an upgrade.
The Solution
Philips either needed to substantially upgrade its existing system to issue e-invoices (NF-e) and keep its infrastructure intact, or find a SaaS solution that could perform the necessary processes more efficiently. The company analysed the market and realised it needed to break away from its outdated practices.
“Our biggest challenge was that Philips had a global IT architecture and strategy based on our ERP platform…the international team not only approved the adoption of the [Sovos] system; the solution became part of the overall architecture strategy.”
Alexander Quinze
CIO & Head of Operational Excellence at Royal Philips
The Benefits
By implementing the Sovos Business to Government Reporting solution, Phlips saw an 80 per cent reduction in maintenance costs, since it was no longer responsible for infrastructure management. The company was also able to free up internal resources from the tedious reporting process.
The Results
Philips has achieved a 25 per cent increase in productivity among employees across all business units of the Brazilian multinational due to the Sovos platform’s availability and reliability. The migration process was smooth and had no impact on users’ daily routines, and ongoing operations are backed by an enterprise support team with a Service Level Agreement (SLA) of 99.9 per cent.
Because of the product’s unprecedented nature, Philips’ corporate IT team extensively audited the Sovos solution. The teams only required a small change in the final architecture — due to a company-specific security requirement — in the aftermath of the evaluation. The successful implementation in Brazil has opened up opportunities for Philips to deploy the solution in other Latin American countries in which it operates.
Why Sovos?
After a competitive selection process that included four different vendors, Philips chose the Sovos Business to Government Reporting regional platform. The company found solace in Sovos’ ability to automate its reporting processes and eliminate its need to manually perform maintenance on a complex system.
The project was divided into two phases: The issuance of NF-e was the first priority, while implementation across the organisation occurred gradually over the course of three months.
