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

E-invoice exchanges with the regulatory authorities are currently required or will be required in the next 2 years, 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 2030.

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.

Link to Finance KDD here.

Impacts

Implementation: 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.

Training and Change Management: Extensive training will be required as SAP DRC is a new functionality which brings about changes to the current ways of working. Additionally, it's a Fiori-based application with a different look and feel compared to the old e-invoicing structures.

Security: Various front-end and back-end role settings need to be considered during the role building exercise.

Licensing: 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. 
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.
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.

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 or Sovos as example?

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

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

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.

	S/4 DRC	3rd Party	Manual
Global compliance	Covers all relevant countries	???	Most countries require electronic submission from ERP
S/4 integration	Part of S/4 ERP.	Requires integration into S/4 ERP	None required
Automated document exchange	Can automate validation, approval and transmission of docs in S/4	???	None
Standardized document format	Supports multiple e-invoicing formats to comply with global standards	???	Some document formats available for manual download
Secure transmission	Secure transmission & tracking of invoices using encryption and secure communication protocols	???
Implementation costs / complexity	Need to configure and test within S/4 program	???	Less system set up required
Maintenance cost	Efficient automated processes requiring less manual intervention On-going (and currently undetermined) licensing costs - often based on number of documents processed	???	Likely to be lower licensing costs Significantly higher people costs for manual processing effort required
Real-time monitoring and reporting

See also

DRC with cloud process flow:

DRC with integration suite process flow:

Change log

Workflow history