Importance of VAT enabled ERP for your Business

An assessment of the capabilities of existing IT systems and re-configurations necessary in order to generate VAT compliant outputs is crucial. In many cases, significant changes will be required to IT platforms and present workflows and processes.

Your business’s enterprise systems will need to be enhanced and modified to incorporate all aspects of VAT implementation. From your point of sale terminals, invoice and accounting systems, information technology systems and management reporting systems, VAT will have an impact on your whole of business systems. These adjustments must be considered in the context of minimizing interruption to your existing business requirements, while testing them to verify they have the capability to meet compliance requirements.

 Against this background, focusing on what really is important to be prepared for VAT and ongoing compliance can be considered through these elements:

• VAT mapping of business processes and transactions to identify which systems and how they are impacted.

 • Ensuring underlying Enterprise Resource Planning (ERP) changes are made to reflect all relevant VAT processes.

• Determine the need and beneficial use of VAT specific tools (transaction integrity checking, cash flow monitoring, automated VAT filing/reporting).

• Appropriate governance and controls to ensure VAT regulations and commercial drivers change systems are kept up to date.

An important feature of VAT is its accruals nature, which means that all related systems impacted by VAT need to reflect this and do so in the context of the VAT rules on the correct timing of the taxing point. As a transaction based tax, VAT must be verified and accounted for, producing compliant documentation for each individual transaction. Your enterprise systems must be able to guarantee accuracy and the ability to generate all necessary information as required, in the event of a request or audit by the tax authorities or management.