Issue

Syensqo has a legal obligation to create and exchange sales e-invoices with many global regulatory authorities. Additionally responses are often required back to confirm they have been correctly submitted. Without this information goods cannot be sold in these jurisdictions and fines can be imposed.

Recommendation

Use the S/4 functionality and integration provided in the ‘Document & Report Compliance’ toolset (DRC). This will provide the most robust, compliant, auditable and scalable solution for Syensqo whilst maximising ease of use.

Background & Context

Currently, e-invoice exchanges with the regulatory authorities are required when selling goods and services to the countries below - an e-invoice is sent to the authority and often a message is sent back to confirm the approval. Approximate invoice quantities shown below:

The number of countries that require this reporting is expected to rise each year - for example, all EU countries by 2028.

Even though there are similarities between the formats required they can differ substantially by each country. For example, Brazil has a different submission required depending upon the type of good or service sold.

Therefore Syensqo needs an efficient, robust and reliable method to send and receive the legally required sales invoice information.

Assumptions

Specific licence costs still need to be established with SAP - need to ensure future invoice volumes included in this estimation.

SAP S4/HANA will be the ERP (Enterprise Resource Planning) application that will enable the management and execution of the sales through to billing processes.

SAP keeps up the maintenance of the DRC to be compliant with the differing requirements of each country.

Constraints

The e-reporting tools chosen to support Finance and Procurement - there is also similar functionality required for tax and inbound invoice government submission / reporting - therefore this KDD should be considered as part of an overall e-documentation approach. (KDDs from Procurement & Finance to come)

Impacts

The initial configuration and testing of the DRC may take significant amount of technical resource and expertise. Even though many countries have a similar set up, each may have variances - in particular when comparing European country requirements to those of LATAM.

Additional licensing and therefore costs will be incurred for S/4 DRC solution.

Business Rules

None identified.

Options considered

1. Option A: Automate with SAP S/4 Document and Reporting Compliance.

The automated DRC functionality can operate in 3 x different ways to cover differing country specific requirements:

1. Document and Reporting Compliance via cloud - exchanges an e-invoice in with selected governments in the format required via Peppol - e.g. Belgium, Poland, France. This is licensed by the number of documents processed.
2. Document and Reporting Compliance via integration suite - exchanges an e-invoice with selected governments in the format required. For example, Saudi Arabia, Chile & Peru. Additionally, file format and transmission provided via integration suite for the Chinese Golden Tax transactions. Licensing?
3. Document and Reporting Compliance for Brazil - exchanges an e-invoice with the Brazilian government in the format required using S/4 Nota Fiscal functionality. Licensing?

The basic flow is defined below:

Option B: Automate with 3rd party solution

This option would integrate a 3rd party provider software into S/4 in order to automate the exchange of sales invoice documents.

Use EDICOM as example?

Option C: Manual download / upload process from S/4 into government portal

This option would required manually downloading the sales invoice from S/4 in the correct format and then manually uploading this document into the relevant government authority portal.

Is this allowed? Check with Marcella what currently done 

The S/4 DRC is recommended for the key reasons below:

Compliance with Regulations:

• SAP e-Invoicing supports compliance with global e-invoicing regulations, including those in countries like Italy, Brazil, Mexico, and others where e-invoicing is mandated by law.
• The solution is regularly updated to keep pace with changing legal requirements.

Integration with SAP ERP:

• Seamlessly integrates with SAP ERP systems (such as SAP S/4HANA and SAP ECC), allowing businesses to generate e-invoices directly from their existing financial and accounting processes.
• Supports integration with third-party ERP systems as well.

Automated Invoice Processing:

• Automates the entire invoicing process, reducing manual effort and the potential for errors.
• Includes features for automated validation, approval, and transmission of invoices.

Standardized Formats:

• Supports multiple e-invoicing formats (such as XML, UBL, EDIFACT) to ensure compatibility with various regional standards and trading partners' requirements.
• Facilitates the exchange of structured invoice data between different systems and organizations.

Secure and Reliable Transmission:

• Ensures secure transmission of invoices using encryption and secure communication protocols.
• Provides tracking and audit trails to ensure transparency and accountability.

Cost Savings and Efficiency:

• Reduces the costs associated with paper invoicing, including printing, mailing, and storage.
• Accelerates invoice processing times, leading to faster payment cycles and improved cash flow.

Real-time Monitoring and Reporting:

• Offers real-time monitoring of invoice status and performance metrics.
• Provides comprehensive reporting tools to analyze invoicing data and gain insights into financial operations.

Global Reach:

• Supports multi-language and multi-currency invoicing, making it suitable for businesses operating in multiple countries.

	S/4 DRC	3rd Party	Manual
Global compliance	Pro Con	Pro Pro	Pro Con
S/4 integration	Pro Con	Con	Pro Pro
Automated document exchange	Pro	Con	Con
Standardized document format
Secure transmission
Roll-out costs
Roll-out complexity
Maintenance cost
Real-time monitoring and reporting

See also

DRC with cloud process flow:

DRC with integration suite process flow:

Change log

Workflow history