Product Information
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. 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. 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.
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
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
Thanks Erika.
Waiting to upgrade my test system to S/4HANA 2021 and check the news within staturoty reporting.
Regards,
Renan Correa
Great blog Erika, thank you!
Great job, Erika!
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 ?
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
Great blog Erika, thank you for sharing.
Great work Erika
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.
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
Thanks Renan
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
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
Also provide your comments on for ESL Listing, Intrastat and other reports will be in used from tax perspective.
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
Thank You Erika. I will bother again if I have more questions on DRC.
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
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
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
Appreciate your reply and advise. Your book is silent about this scenario.
I will also wait for Erika thoughts too.
Regards, Sanjay
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
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
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
Thank You Erika. I will come back. Can I get your e-mail in case, I need your advise.
Regards,
Sanjay
Sanjay - please refer to the SAP contacts in the dedicated PartnerEdge page.
Thank you,
Erika
Hello Erika,
Trust you must be doing well. I wanted to check about the License cost of DRC in detail.
Is it possible for you to share the information?
Regards, Sanjay
Sanjay - Reseller partners can find license details in the price list and customers can contact their account executives. Appreciate your understanding.
Erika
Great blog Erika, thank you for sharing.
Hi Erika, trust you are doing well ! I am sure you are enjoying at SAP. Great to see you speaking over video.
I have a query regarding statutory reporting - can it be done out of central finance at segment(=profit centre) level with the combination of document reporting compliance and AVL? Have you, as part of SAP, seen any client with such requirement?
Regards.
Hi Debasis - Hope you are well too! For which reports would you like to use PC?
In general, we don't support indirect tax reporting by PC. See also in note 1707438 for permanent establishment (PC paragraph).
If you refer to generic financial statements, yes, it's supported. You can see here: https://help.sap.com/viewer/3cc1da1e1e364fadb9b1af653a9597d2/2021.000/en-US/9bf041186bf04f7eae8d3373c382e553.html.
Hope it helps. Feel free to contact directly if anything.
Thank you. Erika
Hi Erika
I am exploring some solutions for the migration to the S/4HANA for the client, and one of the concerns is whether we can make changes in the transactional data using DRC. Do you know if this is possible ? If Yes, where I can find related material.
Regards, Sanjay
Hi Erika,
Please let me know if you can share any comments
I am exploring some solutions for the migration to the S/4HANA for the client, and one of the concerns is whether we can make changes in the transactional data using DRC. Do you know if this is possible ? If Yes, where I can find related material.
Regards, Sanjay
Hi Sanjay,
Document amendments for reporting only are not supported as figures reported must fully reconcile with the system of record (that is read in real time). Users can correct financial documents (reversals, invoice cancellations, credit memos, etc.) and corrections can be reflected in the right reporting period via SAP Document and Reporting Compliance. Details can be seen in this demo: https://sapvideoa35699dc5.hana.ondemand.com/?entry_id=1_wtonip50 or this How-to video: https://sapvideoa35699dc5.hana.ondemand.com/?entry_id=1_67802s9k
Last-minute adjustments are supported with full audit trail and controls.
Thank you,
Erika
Thanks Erika - Regards Sanjay
Hi Erika
One more clarification -
I think it's your last comment around last minute adjustments that Client is seeking to clarify. Are we saying it is possible to make changes to transactions in DRC during vat return prep? Example - A tax code or tax amount, where there is no time to correct in core ERP.
Early reply would be appreciated. Regards, Sanjay
Hi Erika
One more clarification -
I think it's your last comment around last minute adjustments that Client is seeking to clarify. Are we saying it is possible to make changes to transactions in DRC during vat return prep? Example - A tax code or tax amount, where there is no time to correct in core ERP.
Another, question is whether a change can be made to transactional data within DRC to arrive at correct VAT return numbers (tax code or tax amount is one example of a field that may need changing).
Regards, Sanjay
Sanjay - just to clarify, there are no transactional data within SAP Document and Reporting Compliance (there is no data replication), it reads the data from core ERP in real-time and seamlessly produce the reports. There is no a replicated set of data to be edited for reporting only (that would create inconsistencies and audit problems), it's embedded in the ERP that is the true only single source of truth (for tax and financials).
'Last minute adjustments' can be done to the report itself. You can check this video in SAP Help: https://help.sap.com/docs/SAP_S4HANA_ON-PREMISE/3cc1da1e1e364fadb9b1af653a9597d2/289f1556d7a94b879f39b221f129907e.html?locale=en-US
Thank you
Erika
Thanks Erika - this helps
Hi Erika,
Another question - how many Man-days do you think are necessary for a global roll-out of SAP DRC?
Regards, Sanjay
Hi Sanjay,
That depends on many factors such as number countries, level of complexity of the legal requirements, company industry and processes implemented in the respective country.
If you roll out a sales subsidiary with a couple of scenarios it's usually completely different than roll out of production plants or retail/wholesale operations.
If you implement DRC in a country with only VAT and no electronic documents it's completely different than Brazil/Argentina/Mexico/Russia/Italy where you can have import specific details, special taxes and also electronic document exchange.
Any response with a precise number of days without evaluating context is an educated guess, at most.
regards,
Renan Correa
Renan - thank you. I can only echo your comments.
The actual time to configure a standard SAP system for a country can be even less than a day (even for several countries). But to enable the end to end process in production strongly varies, depending on how close a customer's system is to standard, how extensive the testing process is and how well prepared the related tax and logistic departments are (e.g. documents capture the right information in the right fields, tax code to tax box mappings, etc.).
Thank you,
Erika
Thanks Renan and Erika for your comments
Do you have examples of the standard reports in Mexico, Colombia and Argentina?
Mario - The files produced follow the format/schema provided by the Tax Authorities and they can be reviewed using standard preview functionalities (similar to what you can see for SAF-T here). You can find the reports supported in SAP S/4HANA here (for SAP S/4HANA Cloud here). If we have an equivalent ABAP report in ECC, you can find it in the Technical Information column. For CO reports in ECC, you can check note 3129875.
Hope this helps. If you would like a demo, please contact your Account Team.
Erika
Hello Erika,
Do we have any limit in reporting the transactions to the tax authority from S/4 Hana DRC OP/Cloud. if there is any limit - do we have any extra license cost for OP/Cloud versions?
Regards
Sanjay - Yes, SAP Document and Reporting Compliance requires a license. Customers should reach out to account teams for more details.
Thank you. Erika
Thanks Erika - Yes I know for SAP DRC it requires License. However, is there any limit in reporting the transactions to the tax authority? from SAP DRC - OP/Cloud.
Sanjay - can you please articulate further what type of limits you are referring to? You can refer to SAP Help documentation for the compliance scenarios we support (links in the comment above) and, of course, license can be scaled base don countries and volume in scope.
Thank you - Erika
Thanks Erika for reply. Sorry, if my question was not clear enough for number of transactions (I meant number of lines) - Is there any limit in number of lines/volumes which are to be reported to tax authority from SAP DRC OP/Cloud versions. If Yes, does that mean extra cost even after having the advanced version of license of DRC - OP/Cloud.
How much volume or number of lines it can handle with advance version of license of DRC - OP/Cloud?
Let me know, if this is more clear now.
Regards, Sanjay