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SAP S/4HANA 2021 – E-invoicing and statutory reporting made

easy with SAP Document and Reporting Compliance, a holistic
approach to compliance reporting regulations

erika_buson
Product and Topic Expert Options

10-13-2021 8:51 AM
40 Kudos
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.

 SAP Managed Tags:

 SAP S/4HANA Cloud Localization,
 SAP S/4HANA,

 SAP S/4HANA Cloud Public Edition,

 SAP Document and Reporting Compliance

Labels:
 Product Updates

 continuous transaction controls

 e-invoicing

 electronic document

 SAP Document and Reporting Compliance

 statutory reporting

 tax

50 Comments

Renan_Correa
Active Contributor
10-13-2021 10:09 AM
0 Kudos

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

erika_buson
Product and Topic Expert
10-13-2021 4:15 PM
1 Kudo

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

 olivia_vorstheim
Advisor
10-13-2021 4:58 PM
1 Kudo

Great blog Erika, thank you!

Renan_Correa
Active Contributor
10-14-2021 9:58 AM
0 Kudos

Thanks Erika.

Waiting to upgrade my test system to S/4HANA 2021 and check the news within
staturoty reporting.

Regards,

Renan Correa
 martinlitalin
Advisor
10-14-2021 3:59 PM
0 Kudos

Great job, Erika!

former_member772071
Discoverer
10-17-2021 6:27 PM
0 Kudos

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 ?
sanjaysota
Participant
10-28-2021 10:23 AM
0 Kudos

Great blog Erika, thank you for sharing.

asarkhel
Advisor
11-27-2021 6:48 AM
0 Kudos

Great work Erika

 erika_buson
Product and Topic Expert
12-13-2021 9:38 PM
0 Kudos

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

sanjaysota
Participant
12-15-2021 1:59 PM
0 Kudos
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.

sanjaysota
Participant
12-15-2021 2:01 PM
0 Kudos

Also provide your comments on for ESL Listing, Intrastat and other reports will be in
used from tax perspective.

Renan_Correa
Active Contributor
12-15-2021 2:08 PM
0 Kudos

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

sanjaysota
Participant
12-15-2021 2:19 PM
0 Kudos

Thanks Renan

sanjaysota
Participant
12-15-2021 3:14 PM
0 Kudos

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

Renan_Correa
Active Contributor
12-16-2021 10:26 AM
0 Kudos

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
 erika_buson
Product and Topic Expert
12-16-2021 9:21 PM
0 Kudos

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

sanjaysota
Participant
12-21-2021 9:40 AM
0 Kudos

Thank You Erika. I will bother again if I have more questions on DRC.
sanjaysota
Participant
12-22-2021 8:40 AM
0 Kudos

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
sanjaysota
Participant
12-28-2021 7:11 AM
0 Kudos

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
Renan_Correa
Active Contributor
12-28-2021 7:51 AM
0 Kudos

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
sanjaysota
Participant
12-28-2021 12:16 PM
0 Kudos

Appreciate your reply and advise. Your book is silent about this scenario.

I will also wait for Erika thoughts too.

Regards, Sanjay

Renan_Correa
Active Contributor
12-28-2021 12:38 PM
0 Kudos

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
sanjaysota
Participant
01-04-2022 12:14 PM
0 Kudos

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
 erika_buson
Product and Topic Expert
01-04-2022 7:06 PM
0 Kudos

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
sanjaysota
Participant
01-04-2022 11:02 PM
0 Kudos

Thank You Erika. I will come back. Can I get your e-mail in case, I need your advise.

Regards,

Sanjay

erika_buson
Product and Topic Expert
01-05-2022 10:20 AM
0 Kudos

Sanjay - please refer to the SAP contacts in the dedicated PartnerEdge page.

Thank you,
Erika
sanjaysota
Participant
02-05-2022 10:12 PM
0 Kudos

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

erika_buson
Product and Topic Expert
02-05-2022 10:19 PM
0 Kudos

Sanjay - Reseller partners can find license details in the price list and customers can
contact their account executives. Appreciate your understanding.
Erika

former_member753927
Discoverer
02-20-2022 1:05 PM
0 Kudos

Great blog Erika, thank you for sharing.

DebashishM
Participant
02-21-2022 12:00 AM
0 Kudos

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.
 erika_buson
Product and Topic Expert
02-21-2022 12:10 AM
1 Kudo

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/9bf041186bf04f7eae8d3373....

Hope it helps. Feel free to contact directly if anything.

Thank you. Erika

sanjaysota
Participant
05-10-2022 12:04 PM
0 Kudos

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

sanjaysota
Participant
05-11-2022 5:00 PM
0 Kudos

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

erika_buson
Product and Topic Expert
05-11-2022 10:16 PM
1 Kudo

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
sanjaysota
Participant
05-12-2022 4:42 AM
0 Kudos

Thanks Erika - Regards Sanjay

sanjaysota
Participant
05-12-2022 10:15 AM
0 Kudos

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

sanjaysota
Participant
05-12-2022 1:58 PM
0 Kudos

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
 erika_buson
Product and Topic Expert
05-12-2022 10:32 PM
0 Kudos

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/3cc1da1e1e364fadb9
b1af653a9597d2/289f1556d7a94b879f3...

Thank you

Erika
sanjaysota
Participant
05-20-2022 4:29 AM
0 Kudos

Thanks Erika - this helps

sanjaysota
Participant
05-20-2022 4:30 AM
0 Kudos

Hi Erika,

Another question - how many Man-days do you think are necessary for a global roll-
out of SAP DRC?

Regards, Sanjay
Renan_Correa
Active Contributor
05-20-2022 7:02 AM
1 Kudo

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
 erika_buson
Product and Topic Expert
05-20-2022 3:59 PM
1 Kudo

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
sanjaysota
Participant
05-20-2022 4:07 PM
0 Kudos

Thanks Renan and Erika for your comments

mmora_01
Discoverer
08-25-2022 3:56 AM
0 Kudos

Do you have examples of the standard reports in Mexico, Colombia and Argentina?

erika_buson
Product and Topic Expert
08-25-2022 10:55 AM
0 Kudos

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

sanjaysota
Participant
09-05-2022 9:58 AM
0 Kudos

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
 erika_buson
Product and Topic Expert
09-05-2022 5:08 PM
0 Kudos

Sanjay - Yes, SAP Document and Reporting Compliance requires a license.

Customers should reach out to account teams for more details.

Thank you. Erika

sanjaysota
Participant
09-05-2022 5:20 PM
0 Kudos

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.
 erika_buson
Product and Topic Expert
09-05-2022 5:39 PM
0 Kudos

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

sanjaysota
Participant
09-07-2022 8:56 AM
0 Kudos

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
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