Digital Compliance & Receipt Digitization is the new Black!
The current COVID-19 situation worldwide has accelerated the digital transformation process. Receipt Digitization is not a new topic and SAP always had coverage for digitization of receipts in its product portfolio and SAP Concur’s expense product was no exception. The current COVID situation has accelerated this adoption by many folds.
Localized flavors & requirements of receipt digitization are super critical to ensure regulatory compliance in various geographies SAP Concur operates in.
In this blog, I would like to touch upon receipt digitization localization support in SAP Concur for Japan, Spain and France.
Listen from our product experts Pradeep and Nikhil explaining the localization support in SAP Concur for Japan, Spain and France.
Digital Compliance Basics
Some basics of receipt digitization in SAP Concur Expense module…
SAP Concur Expense provides a very simple interface and process view to have receipts digitized.
It can be summarised as below: (Fig 1)
- Scan the receipt
- Check Compliance
- Receipt available for attaching to an expense report
What’s important is to ensure that it’s Audit compliant (Fig 2). Some basic audit services include:
- Substantiate Receipts: audit matches the associated expense including date, amount, vendor, expense type, and receipt clarity
- Support Tax regulations: verify item tax values match the supporting receipt for improved tax and regulatory compliance
- Audit Exception
Japan e-Bunsho Digital Compliance
Few years back Japan relaxed its e-Bunsho regulation to allow travelers to hold a photo of a receipt to make a claim in SAP Concur expense management system. Japan’s business travelers can digitize the receipt instead of submitting voluminous papers to employee’s finance department for review and expensing.
It’s not just digital copy of receipts… this act requires to add digital timestamp to the receipt images of the receipts to prevent manipulation. This timestamp has to be issued by Japanese timestamp suppliers authorized by Japanese governmental organization (Example: SEIKO Time service)
This requirement is for all companies who pay taxes to Japan government. It means even if the company which pays a tax to Japan is the subsidiary of US firm/conglomerate, it needs to use timestamp.
Timestamping is a core technique to prove the authenticity of electronic documents. It proves that a digital file exists at a “point in time” and provides base to prevent manipulation or its content has not been altered since that “point in time”.
The overall e-Bunsho process can be summarised as below:
- Use SAP Concur UI or App to scan the physical receipt
- Extract meta-data from the uploaded receipt
- Timestamp it with authorized provider
- Persist the Legally compliant timestamped receipt
Refer to Fig 3 below for a basic overview of this process.
This feature works on Gateway UI as well as with NextGen Expense UI.
Receipt Digitization Compliance for France and Spain
For EU members, the EU Council Directive 2010/45 provides a framework on the requirements for paper and electronic invoices, including the conversion of paper invoices into digital copies and storage as electronic records with legal validity, provided those adequate measures are taken to ensure
- record’s authenticity of origin
- integrity of content
- legibility during the entire retention period.
In addition to these statutory requirements relating to electronic conversion and retention of invoice records, most member states have their own regulations and requirements on how to achieve compliance. Expense software products like SAP Concur Expense are indirectly impacted by these regulations, as they need to support their customers in going paperless by providing a solution compliant with in country regulations as well as international standards. In some markets, the ability to implement a paperless expense report process represents a real revolution, being one of the key drivers for companies when selecting a T&E solution.
As part of the phase 1 of Receipt Digitalization in paper into digital compliance on Concur Expense Professional and Standard for France and Spain is available.
In Spain this is called homologation of Certified Digitization software. Agencia Estatal de Administración Tributaria (AEAT), the Spanish Tax Agency, has the required regulation in place and holds the authority to approve homologation of Certified Digitization software.
With this, digitized invoices have the same legal validity as original paper-based invoices.
The image above (Fig 4) shows this invoice digital compliance process for Spain, where apart from verification and compliance check, there is a need to store the same in SDR (Structured Data Record) format.
Here the expense User can choose to edit receipt information and enter receipt content information and • The receipt content record is stored as a supplement to the expense information.
This feature needs that NextGen Expense UI is enabled for both SAP Concur Standard and Professional Editions. End users must have access to the Concur mobile app on their smartphones. ExpenseIt is not a requirement; digitalization works for both ExpenseIt and non-ExpenseIt users.
In the next blog “SAP Concur adding value to customer in Receipt Digitisation and Compliance” get to know how to configure the features and business processes we discussed in this blog…
About SAP Concur
SAP Concur, imagines the way the world should work, offering cloud-based services that make it simple to manage travel, expenses & Invoices. By connecting data, applications and personas, SAP Concur delivers a digital & cloud first experience and complete transparency into spending.