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Author's profile photo Erika Buson

SAP S/4HANA 2021 – E-invoicing and statutory reporting made easy with SAP Document and Reporting Compliance, a holistic approach to compliance reporting regulations

As the latest digitalization trends are transforming compliance regulations, tax departments are facing new challenges to keep the business running smoothly. With SAP S/4HANA and SAP S/4HANA Cloud, SAP can support you in the topic of tax compliance while transforming a perceived tax burden into value-adding transformation opportunities.

Legal authorities continuously evolve mandates for corporations with the goal to increase tax controls, prevent tax evasion and maximize efficiency of tax collection.

In the past decades, many changes in the legal requirements have continuously increased the complexity of compliance for enterprises, potentially putting at risk operational efficiency. Yet, all these changes to tax processes have been incremental. For example, authorities have increased the amount of detailed data to be disclosed, while they have continued to rely on periodic ‘tax bills’ (returns prepared and paid periodically).

As a more recent trend, changes to tax legislations are more disruptive: companies are required to alter their well-known business processes, that might have been optimized for long periods of time, as well as the way they handle tax compliance. While some countries still require only periodic aggregated data, another trend is clearly gaining momentum: with the introduction of electronic business documents, the world has been evolving toward continuous transaction controls (business processes extended with an additional step that sends business documents to the tax authorities for registration / approval). These translate to tax authorities becoming gatekeepers controlling, validating, or even approving tax transactions before they can take place and, as a result, tax authorities becoming the source of truth of the tax liabilities to be settled.

The digitalization of tax clearance not only translates into tighter controls with higher risks of business disruptions, it also forces a paradigm shift with inversion of traditional roles in compliance: enterprises, as a taxable party, will find themselves transitioning from preparation of periodic reports to audit the draft returns prepared by authorities. And they will need to do this in no-time within the existing or even decreasing operational capacity.

While it might sound simple, audit activities can involve the analysis of thousands or even millions of records, so automation and technology are quickly becoming essential to prevent unacceptable explosion of tax compliance costs.

 

Fig.%201%3A%20The%20journey%20of%20business%20compliance

Fig. 1: The journey of business compliance

 

To provide enterprises with an arsenal of abilities to address these challenges, SAP has combined SAP Document Compliance and SAP solutions for Advanced Compliance Reporting into one holistic solution: SAP Document and Reporting Compliance.

It is one SAP solution to fulfil all types of mandates from real time electronic business documents to statutory reports, and enables enterprises to address the emerging number of continuous transaction controls. A holistic approach to address all types of mandates is a key pre-requisite to facilitate reconciliation and guarantee consistency between real time, business document submissions and statutory reports as this becomes the new operating standard.

 

Fig.%202%3A%20The%20end-to-end%20compliance%20process%20enabled%20by%20SAP%20Document%20and%20Reporting%20Compliance

Fig. 2: The end-to-end compliance process enabled by SAP Document and Reporting Compliance

 

SAP Document and Reporting Compliance is brought to life with an integrated dashboard that, for the first time, allows to manage all types of mandates in one place. This is a stepping-stone to enable seamless transition from real time electronic documents to statutory reports, so tax accountants can easily ensure they are fully in sync and run compliance effectively. Check out this video for more details.

 

 

SAP Document and Reporting Compliance enables enterprises to stay compliant in the digital world, and it goes beyond. With its streamlined approach to tax compliance and embedded automation, the solution allows also to re-think compliance processes maximizing efficiency, reducing both compliance risks and costs, and increasing sustainability of tax operations.

For more details on SAP Document and Reporting Compliance, read this blog from Elvira Wallis which includes valuable recordings, spanning from live demonstrations to working sessions where SAP customers shared insightful use cases for the solution.

And, if you want to learn more about the business value of the finance innovations as part of the SAP S/4HANA and SAP S/4HANA Cloud releases, read this blog from Benno Eberle which includes several product update videos.

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      26 Comments
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      Author's profile photo Renan Correa
      Renan Correa

      Hi Erika,

      Thanks for the update on the topic, I personally like the strategy of linking Document and Compliance reporting together as it makes sense for me nowadays.

      I checked the documentation for S/4HANA 2021 and I have questions only about about how to refer to the solution for customers now.

      Should we still use Advanced Compliance Reporting as a name for the part of the solution related to legal reporting, its still eith this name in S/4Hana 2021. Or should we use something like document and compliance reporting for legal reports?

      Apart from that I think the documentation and also presentations about it are really good and the feedback from customer projects related to edocuments and ACR is also very positive!

      regards,

      Renan Correa

      Author's profile photo Erika Buson
      Erika Buson
      Blog Post Author

      Hi Renan - thank you for your feedback. And great to hear! We will officially refer to it as 'SAP Document and Reporting Compliance - Statutory reporting'. In regards to the documentation for S/4HANA 2021, we have started the harmonization here (more to come).

      If any further question, please reach out. Thank you. Erika

      Author's profile photo Renan Correa
      Renan Correa

      Thanks Erika.

      Waiting to upgrade my test system to S/4HANA 2021 and check the news within staturoty reporting.

      Regards,

      Renan Correa

      Author's profile photo Olivia Vorstheim
      Olivia Vorstheim

      Great blog Erika, thank you!

      Author's profile photo Martin Lin
      Martin Lin

      Great job, Erika!

      Author's profile photo Samarth Gupta
      Samarth Gupta

      Hello Erika,

      As we understand SAP DRC is going to be part of S4 HANA 2021 release .

      However , is there any guidance available for customers on S4 HANA previous versions like 1809/1909 who may still license DRC in next few months ?

      Author's profile photo Erika Buson
      Erika Buson
      Blog Post Author

      Hi Samarth,

      The latest holistic dashboard that allows to harmonize the end-to-end process is currently available for 2021 release. Customers on older releases can still have the full legal scope supported in the corresponding S/4HANA release, but they will need to upgrade for the dashboard due to technical reasons.

      Erika

      Author's profile photo Sanjay Kumar
      Sanjay Kumar

      Great blog Erika, thank you for sharing.

      Author's profile photo Ashish Sarkhel
      Ashish Sarkhel

      Great work Erika

      Author's profile photo Sanjay Kumar
      Sanjay Kumar

      Hello Erika

      Will Standard - Advance Sales & Purchase Tax report be continued in S4 or it will scrap - which will be the new report in use as i believe With new version of VAT reports in ACR will replace ATR report. Please if you can provide some detail insight on this report.

      Author's profile photo Renan Correa
      Renan Correa

      Hi Sanjay,

      The SAP Note 2480067 contains the information for "Replacement of Existing Legal Reports with 'SAP Document and Reporting Compliance - Statutory Reports'". It depends on the country where you're running RFUMSV00.

      Regards,

      Renan Correa

      Author's profile photo Sanjay Kumar
      Sanjay Kumar

      Thanks Renan

      Author's profile photo Sanjay Kumar
      Sanjay Kumar

      Hi

      It is not clear like - it looks support is finished for example GB

      GB Great Britain VAT
      Return RFUMSV00
      Advance
      Return for Tax
      on
      Sales/Purcha
      ses - Great
      Britain
      OP 1610
      FPS1 28.02.2018 XX-CSCGB-FI

      Let me know if you are seeing differently

      Author's profile photo Renan Correa
      Renan Correa

      Hi Sanjay,

      That's exactly what is written for GB, support of RFUMSV00 for this country was finished in 2018. For S/4HANA AFAIK the MTD is only available via ACR / ACR-SLH.

      Regards,

      Renan Correa

      Author's profile photo Sanjay Kumar
      Sanjay Kumar

      Also provide your comments on for ESL Listing, Intrastat and other reports will be in used from tax perspective.

      Author's profile photo Erika Buson
      Erika Buson
      Blog Post Author

      Sanjay - Intrastat is not part of SAP Document and Reporting Compliance and it continues to be supported within SAP S/4HANA for International Trade.

      For the rest (EC Sales List, WHT, etc.), please refer to note 2480067. What is not listed continues to be supported. For what is in the note, explanation above applies.

      Thank you,
      Erika

      Author's profile photo Sanjay Kumar
      Sanjay Kumar

      Thank You Erika. I will bother again if I have more questions on DRC.

      Author's profile photo Sanjay Kumar
      Sanjay Kumar

      Hello Erika, Renan

      Need your opinion on DCR.

      If a  client use a number of billing systems in combination with core SAP.  They will often post batch transactions on aggregate into SAP, and so the underlying transactional information is only stored in these billing systems.

      I have one question whether it’s possible for SAP DCR to be integrated with other third party systems, or can it only pull information together that is stored in SAP.  Need to understand whether it is possible to feed other information sources into DRC for consolidation?

      Early reply would be appreciated.

      Regards Sanjay

      Author's profile photo Sanjay Kumar
      Sanjay Kumar

      Belated Merry Christmas wishes and Happy New Year in Advance.

      I appreciate if I can get some understanding on my query which I had posted earlier.

      "If a  client use a number of billing systems in combination with core SAP.  They will often post batch transactions on aggregate into SAP, and so the underlying transactional information is only stored in these billing systems.

      I have one question whether it’s possible for SAP DCR to be integrated with other third party systems, or can it only pull information together that is stored in SAP.  Need to understand whether it is possible to feed other information sources into DRC for consolidation?"

      Many Thanks

      Sanjay

      Author's profile photo Renan Correa
      Renan Correa

      Hi Sanjay,

      The response to your question depends on several factors such as countries involved and types of SAP systems used for consolidation ( S/4HANA Central Finance, ECC or S/4HANA ) so that it's not easy to simply say yes or no without knowing the context. Also, please take into consideration that the SAP community is a place for voluntary exchange of ideas, if you have an urgent business demand I would recommend to get in touch with consulting experts to help build your business case.

      regards,

      Renan Correa

      Author's profile photo Sanjay Kumar
      Sanjay Kumar

      Appreciate your reply and advise. Your book is silent about this scenario.

      I will also wait for Erika thoughts too.

      Regards, Sanjay

      Author's profile photo Renan Correa
      Renan Correa

      Hi Sanjay,

      Thanks for the comment on the book. You're right about it, this discussion was left out intentionally. Data consolidation is supported in ACR Brazil and also with Central Finance on select countries, but it has to be checked and advised in detail.

      Regards,

      Renan Correa

      Author's profile photo Sanjay Kumar
      Sanjay Kumar

      Hello Erika,

      I hope you had great New Year.

       

      "If a  client use a number of billing systems in combination with core SAP.  They will often post batch transactions on aggregate into SAP, and so the underlying transactional information is only stored in these billing systems."

      I have one question whether it’s possible for SAP DCR to be integrated with other third party systems, or can it only pull information together that is stored in SAP.  Need to understand whether it is possible to feed other information sources into DRC for consolidation?

      Looking for your advise too.

      Regards Sanjay

      Author's profile photo Erika Buson
      Erika Buson
      Blog Post Author

      Hi Sanjay - apologies, just back from the holidays. Happy new year too!

      The above is correct: content from external systems (SAP and non-SAP) can be integrated via SAP S/4HANA for central finance and SAP Document and Reporting Compliance can seamlessly offer statutory reporting on top of it. Additional flexibility/options are provided for Brazil reporting.

      While these are recommended options, if your scenarios don't fit any of them, the extensibility framework (design time) should provide the flexibility required to address customer-specific requirements via consulting solutions (when aggregated data are not sufficient, this varies by report/country). Please setup a meeting if you want to discuss this in more details.

      Thank you,
      Erika

      Author's profile photo Sanjay Kumar
      Sanjay Kumar

      Thank You Erika. I will come back. Can I get your e-mail in case, I need your advise.

      Regards,

      Sanjay

      Author's profile photo Erika Buson
      Erika Buson
      Blog Post Author

      Sanjay - please refer to the SAP contacts in the dedicated PartnerEdge page.

      Thank you,
      Erika