Implementing SAP S/4HANA – an opportunity for the tax department

Rethink processes, structures and systems. Transitioning to SAP S/4HANA is a big change for many business entities. If the tax department is involved in the implementation, there are good opportunities to completely rethink various issues and optimise processes holistically along all business processes. This is also beneficial with regard to tax-related compliance. In our white paper “SAP S/4HANA: An opportunity for the tax department”, our experts explore the related questions.

One example is data collection. With SAP S/4HANA, business entities can fundamentally reassess and update related processes. So far, many tax departments have tolerated errors at the beginning of a process and then improved them later. Workflows can now be changed so that errors and thus costly corrections are excluded as much as possible from the start. However, what it takes is the required information and data. SAP S/4HANA will be able to contribute much more information automatically than we see with today’s R3 systems.

In the white paper our experts analyse how the introduction of SAP S/4HANA affects the processing of various tax types (income tax, withholding tax, transfer pricing and value added tax). In the area of income tax, for example, the possibilities of automation have not yet been fully exhausted in most business entities. The greatest potential in this regard is when incoming documents.

With an SAP S/4HANA migration in mind, the objective should be to capture data at the beginning of the process (master data, requisition, contract negotiations, invoice capture, etc.) and make it available for tax purposes. This can prevent the subsequent search for data, numbers and factual information. Tax departments would thus have more time for value-added activities. At the same time, transmission errors would be avoided. Compliance costs would consequently decrease while the quality of compliance would increase.

The successful introduction and later use of SAP S/4HANA is primarily decided by intensively addressing the subject early on. The sooner the tax department is involved and can define its requirements, the better. Generally, all tax types are concerned with providing data at the required detail level very early in the process.

This is the only way to prevent the subsequent, costly correction of insufficient or incorrect data. The demonstrated potential for simplification and automation should be systematically identified in an preliminary project and then subjected to a cost-benefit analysis. This ensures, among other things, that the implementation costs are a corresponding return on investment.