The digital transformation of invoicing and statutory reporting has resulted in it being a survival kit for organisations that want efficiency, precision, and seamless compliance with their tax and regulatory requirements. If we talk statistically, the e-invoicing market reached around USD 14 billion in 2023, expected to grow at a CAGR of 18% during 2024-2032, reaching around USD 61 billion in 2032. The numbers are huge and promising; they showcase the need for accuracy, sustainability, and faster methods. But have you ever given a thought to what might be the key drivers of this continuous growth?
Table of contents
- Introduction
- The top benefits of SAP Document and Reporting Compliance
- Compliance regulations and standards
- Challenges of deploying SAP DRC
- Join forces with TJC Group for your SAP DRC implementation
- The final word
- Useful links per country
Introduction
Over the last 10 to 15 years, the tax compliance and reporting landscape has evolved drastically. With more stringent reporting requirements on international business, global regulatory pressure has also increased. Having said that, authorities have transformed as well, adopting a more strategic, commercial, and digital approach. The emergence of the digital era has played a positive role in the tax and regulatory landscape, like the implementation of e-invoicing and e-reporting across the world. For the unversed, many countries have made e-invoicing and e-reporting mandatory while some countries are on their way to implementing the same.
Key drivers of digital compliance initiatives
There may be tens of reasons why digital compliance initiatives are the best course of action; but of those, the following are the absolute key drivers of the digital compliance landscape –
Prevent tax evasion
Every now and then, we hear about bigshot celebrities, or some entrepreneurs evading tax; however, there might be far more organisations who don’t pay their due taxes to their governments. This can be due to several reasons, and coming up with a solution is necessary. Thankfully, e-invoicing and reporting can help with the same. As a matter of fact, it helps in real-time control of business transactions, going beyond e-invoicing as well as reducing the VAT gaps, estimated to be in billions.
Increase efficiency
Another driver of digital compliance initiatives is the increase in efficiency it brings to the picture. With digital compliance, government agencies can manage tax revenue in a much effortless and faster manner. It also automates the reporting process; provides analytics, forecasting, and statistics, and digitalises public procurements.
Economic digitalisation
Automation is a big part of digital compliance. It has helped governments across the world digitalise their economy, implementing processes for financing, interoperability, and so on. Digitalisation has also helped to ensure better SME support, operational efficiency, and management of spending.
Regulations will continue to evolve, and the more they grow, the more challenging they can be. Legal mandates need real-time data as a prerequisite for businesses to run. It may seem like a challenge, but with the right tools like the SAP Document and Reporting Compliance, keeping up with regulations while tackling its challenges will become much easier.
What is SAP DRC?
The SAP Document and Reporting Compliance, or SAP DRC, is a solution that tackles every aspect of e-invoicing and e-reporting. With its help, you can create, process, and monitor all your electronic documents and periodic reporting with the SAP systems. SAP DRC’s feature enables organisations to ensure compliance with the local legal framework and regulations. SAP DRC supports multiple countries and languages, offering a centralised approach to managing documents while providing complete access and visibility over the reports.
Additionally, the eDocument Cockpit feature of SAP DRC helps in easy document collaboration; SAP Application Interface Framework (SAP AIF) and SAP Integration Suite help in seamless integration with other SAP systems. With SAP DRC, enterprises can ensure that their SAP systems comply with regulations and maintain the accuracy and reliability of the information stored in the systems.
SAP Document and Reporting Compliance consists of two components-
- The first part is on the business systems (SAP S/4HANA, ERP or other business platforms) to make compliance a seamless step within your business processes, with no data redundancy and no data replication. This part manages local mapping or format based on local regulations, fully integrated with business processes, real-time business monitoring, and seamless corrections across all types of mandates worldwide.
- The second part is on the SAP Business Technology Platform (BTP) to scale and simplify electronic integration with local authorities and platforms. This can be SAP Document and Reporting Compliance, cloud edition which is ready-to-use services or the customer-managed SAP Integration Suite tenants which is ready to deploy depending on the country/scenario. This component manages authentication, encryption and digital signature based on local regulations.
Key features and functionalities of SAP DRC
The SAP Document and Reporting Compliance has comprehensive features that make it a preferred choice; some of the key features and functionalities are –
Designed with a holistic dashboard
- The SAP DRC solution helps embed real-time and actionable insights into your ERP systems, preventing disruptions while enabling a smooth operation.
- The holistic dashboard allows users to manage corrections and follow-ups effectively through its centralised entry point.
- The dashboard gives a unified user experience across countries, gaining flexibility to meet specific needs.
Digitalised reporting experience
- SAP DRC’s feature that allows users to prompt and monitor obligations worldwide is a class apart. It comes with a compliance calendar that offers easy monitoring of the commitments.
- The solution digitalises and automates activities through approval adjustments in the system of the record. It is done with the help of a customised checklist.
- Its overall digitalised reporting feature automates submissions and helps gain insights backed by data into transactions, thereby supporting a complete audit trail and traceability.
Extend and create scenarios
- SAP Document and Reporting Compliance’s extensibility platform helps extend and create scenarios. Users have access to a library of pre-defined processes and real-time scenarios that can be re-used.
- Additionally, its features can define compliance reports for effortless adding and copying of existing reports to meet business requisites.
- The feature also enables the repurposing of business features across all basic, personalised, and partner scenarios.
Ease of operation
- SAP DRC automation feature helps in delivering an easy-to-operate experience, elevating the transmission and digital clearance of business transactions through local standards.
- With the DRC solution, users can monitor registered invoices and automate reconciliation with public agencies.
- Additionally, the users can correct transactions easily by drilling down directly into the underlying transactions.
How does SAP DRC help businesses achieve digital transformation?
The digital transformation of the tax clearance process deciphers into tighter controls while creating a paradigm shift in capsizing traditional compliance roles. The taxable parties will transition from preparing periodic reports to auditing the draft returns prepared by the authorities. The process must be done quickly within the existing operational capacity; keeping in mind that audit activities involve analysis of several records, which can be in thousands or even in millions. Therefore, automation and technology are increasingly becoming an essential part of the entire invoicing, reporting, and tax compliance.
SAP Document and Reporting Compliance helps organisations (or enterprises) address all the e-invoicing and statutory reporting challenges. The solution helps you stay compliant in the digital world, having a streamlined approach towards tax compliance. Additionally, its compilation with embedded automation helps you maximise efficiency, reduce compliance and cost risks, and increase the sustainability of tax operations.
The top benefits of SAP Document and Reporting Compliance
Customers look for solutions that make their business operations more effective and easier. When it comes to digital invoicing and tax landscape, there aren’t many comprehensive solutions. So naturally, when SAP DRC was being developed, packing it with state-of-the-art benefits was an important aspect. Why? – to ensure that customers experience the ease of digital reporting in the best way possible. Here are some benefits that make SAP’s reporting compliance solution an extraordinary one –
Increases efficiency of your business operations
The document and reporting compliance solution by SAP not only enhances your automation efforts but also boosts your operational efficiency by notches. The solution optimises compliance and improves sustainability by managing e-documents and statutory reporting globally, and so on.
Streamlines your business processes
SAP DRC’s extensibility platform feature helps create new scenarios that allow users to customise SAP documents and reporting functionalities to suit their specific business needs or industry-specific requirements. It streamlines and simplifies your business process and is done with the help of a unified user experience.
Seamless integration with SAP ERP and S/4HANA systems
One key benefit of SAP Document and Reporting Compliance (DRC) is its seamless integration with SAP ERP and S/4HANA systems. It eliminates the need for data replication, significantly reducing the workload for the IT team. With DRC, electronic documents and statutory reports are generated directly from SAP data in compliance with local legal requirements, minimising manual effort and ensuring accuracy.
Advanced analytics and reporting capabilities
The digital landscape will never stop evolving – it is growing and will continue to grow rapidly. With its impact on business operations, it has become mandatory to stay on top of these ever-changing trends. SAP DRC benefits organisations not only through its automation capabilities but also with its advanced analytical abilities. Additionally, with this document compliance solution, you can adopt legal mandates easily and transition from periodic reporting to continuous transaction controls with an integrated solution.
Scalability and flexibility for future growth
Every solution must be scalable and flexible to adapt to any new changes that may come ahead in the future. Thankfully, your SAP DRC has a flexible framework that is customisable to meet the needs and legal specifications of different countries and regions. Having said that, the solution also adapts to different business processes effortlessly, thereby leading to a positive impact for a scalable future.
Enhanced data management and accessibility
The SAP Document and Reporting Compliance helps generate and manage compliance reports. The solution offers an array of features that streamlines the generation and management of data; having abilities to automate report generation, schedule the reports to be generated regularly, and track the report statuses. Overall, SAP DRC enhances your data management process while giving you ease of access to the reports.
Compliance regulations and standards
Compliance challenges faced by businesses
With emerging technologies and the constant upgrading regulations, businesses often face compliance challenges. Not just that, there are obstacles, while retaining data for audit and other legal purposes as well. Retaining data for a particular time period needs to be compliant with legal, administrative, operational, and business requirements. Additionally, businesses must ensure that the information is safely stored and available when needed; however, in compliance with privacy and data protection laws.
A few of the common challenges that businesses face with ensuring compliance are as follows –
Diverse regulatory landscape
Unfortunately, government or legal regulations are complex, varying across different industries and regions. It becomes challenging for organisations to navigate the evolving and complex regulatory landscape, especially if the organisations operate internationally. Additionally, they have to stay updated about the legislation amendments while ensuring that the policies are in compliance with the local and international laws.
Data proliferation
Data is one of the most crucial aspects of any business, and organisations produce huge amounts of data that makes it difficult to manage and store them. This increasingly challenging issue may impact your strategies because effective retention regulations depend on how efficiently data can be identified and classified as per its value and sensitivity.
Data security
Secure retention of data for legal requirements must be a priority for organisations. And one has to keep in mind that the retained data must be available when needed. It accentuates the importance of implementing strong security measures for sensitive data protection from unauthorised access and rising security threats.
Evolving technologies
Staying up-to-date with the evolving technologies can become a tedious task. To keep up with the current retention practices, organisations will need to update their policies, IT infrastructure, etc., – in response to the upcoming data formats, storage technologies, and communication routes.
How does SAP DRC help meet compliance?
If you are wondering how SAP DRC can tackle these challenges and meet compliance, here’s the insight for you –
Data preparation and submission
SAP DRC assists in getting critical business data ready for submission, with the leverage of conducting manual adjustments or restructuring processes. This ensures that the data conforms to the legal requirements while enabling electronic processing by external systems. In some cases, matching existing data with those from business partners or tax authorities also becomes essential. SAP DRC helps in the process being conducted correctly, complying with the requirements and ensuring that data remains consistent within the internal and external (business partners, tax authorities, etc.) organisations.
Reconciliation
SAP DRC facilitates reconciliation between internal records and records available on tax authorities’ platforms; mismatches can be seamlessly reviewed and approved or rejected accordingly. It offers a consistency check framework to automate checks, centrally review inconsistencies and initiate corrections, with the ability to identify inconsistencies and streamline remediation. It also helps identify missing records before the period ends while automatically verifying drafted returns prepared by authorities and accepting or rejecting them to finalise the periodic submission. The reconciliation function is available in countries where the authorities’ portals provide API and access to retrieve submitted records.
Statutory reporting
SAP Document and Reporting Compliance automatically prepares the required statutory reports in the legal format expected by the authorities and covers ready-to-use scenarios/reports for over 400 regulations in more than 55 countries. Tax experts can make traceable adjustments with capabilities that drill down to the underlying business documents and gain more audit-proof documentation. With transparency on tax deadlines as well as approvals and automated submission to the authorities.
Electronic documents
Outgoing electronic documents are automatically created in the format of local legally compliant files with digital links to underlying transactions in SAP ERP and S/4HANA. Outgoing electronic documents are automatically transmitted to either Business Partners or Tax Authorities.
Incoming electronic documents are automatically received from tax authorities or business partners and interpreted and rendered in human-readable format (HTML or PDF format) without the necessity of OCR. Incoming electronic documents are automatically integrated with the vendor invoice management solution for further processing for invoice verification, workflow and approval. The status of documents is updated in real time, permitted actions are controlled accordingly.
Countries supported by SAP Document and Reporting Compliance
Like mentioned before, every country comes with its own set of legal regulations and compliance requirements. Does SAP DRC support all the countries across the world? Well, here’s a list for you –
- Angola
- Argentina
- Australia
- Austria
- Belgium
- Brazil
- Bulgaria
- Canada
- Chile
- China
- Colombia
- Croatia
- Czech Republic
- Denmark
- Egypt
- Finland
- France
- Germany
- Greece
- Hungary
- India
- Indonesia
- Ireland
- Israel
- Italy
- Japan
- Kazakhstan
- Luxembourg
- Malaysia
- Mexico
- Netherlands
- New Zealand
- Norway
- Oman
- Peru
- Philippines
- Poland
- Portugal
- Qatar
- Romania
- Russia
- Saudi Arabia
- Serbia
- Singapore
- Slovakia
- South Africa
- South Korea
- Spain
- Sweden
- Switzerland
- Taiwan
- Thailand
- Turkey
- Ukraine
- UAE
- United Kingdom
- United States
- Venezuela
Challenges of deploying SAP DRC
While SAP Document and Reporting Compliance is your go-to solution for e-invoicing and e-reporting compliance, you may face some challenges while deploying the solution, such as –
The complexity of implementation: Implementing SAP DRC can be a tedious process if the customer’s configuration deviates from SAP standards or best practices. As such, having the right partner with the right expertise and support for a successful implementation becomes mandatory.
Challenges with customisation: While the solution is quite flexible and scalable, at times, customising it to meet specific organisational needs can become a challenge. It may require external input for effective enhancement.
Reliance on the SAP ecosystem: SAP DRC is a jackpot for organisations that have invested in SAP systems, but for those outside the SAP ecosystem, integration may be a challenge. Not saying that it cannot be done; it will be a tad bit complex!
Cost considerations: The benefits of using SAP’s reporting compliance solution are extensive; As the pricing model is based on the number of transactions, customers can start with a minimum pack, giving customers the leverage of starting small and then gradually going big.
Though these are challenging when deploying the solution, they are feasible – you only need to have the right partner and support. And how do you ensure that? By joining hands with TJC Group!
Join forces with TJC Group for your SAP DRC implementation
Tax compliance must be addressed with utmost priority and is a crucial factor for organisations. With SAP DRC, organisations can sigh a breath of relief; however, with the right partner, the entire process becomes even simpler and seamless. Our SAP DRC consultancy services are tailored to ensure that our customers have a smooth experience throughout the entire process. With the excellent expertise and experience of our team members, TJC Group’s aim is to keep the implementation as simple and efficient as possible.
Leverage SAP DRC benefits with TJC Group
With us, customers can enjoy a seamless SAP Document and Reporting Compliance deployment, gaining access to its benefits like –
Integration: SAP DRC is scalable and flexible; therefore, we ensure that you can entirely integrate it for your SAP S/4HANA migration.
Automation: Possibly one of the most sought-after benefits of SAP DRC, with us you can achieve zero-touch invoice processing with the help of incoming automated solutions integration.
Extensibility: SAP DRC’s extensibility platform is a key feature that makes it stand apart from the crowd. TJC Group takes it to its advantage by ensuring that during the solution’s implementation, all the industry-specific and business requisites are met.
Security: An aspect that has time and again been spoken of; data security comes under the list of the most important factors for organisations. Choosing TJC Group’s SAP DRC consultancy services will help you ensure the same. We have a strong security code of conduct, ensuring that the necessary policies and procedures are followed. Now that we have attained our ISO27001 certification, our security processes have become even more robust.
Our tailored approach for SAP DRC implementation
TJC Group’s team of B2G experts that specialises in SAP DRC follows a customised approach that is backed by the SAP Activate methodology.
SAP Activate methodology is a proven process for project planning and execution, ensuring the delivery of optimised templates and accelerators.
During the project, our experts will first define the best scope of practice, develop an initial scope statement, and timeline and schedule for the implementation. We execute Project Quality Gate at the end of each phase to verify that acceptance is met for the deliverables required and actions to be completed for the associated critical stage to enhance project quality and minimise project risk exposure.
We perform an initial project scoping with a thorough analysis of the legal requirements and gap analysis, essential to identify and mitigate risks for project implementation and business impact. Having said that, the team goes the extra mile; with talented and senior SAP finance consultants working as an extension of your team.
Why choose TJC Group for SAP DRC implementation?
25+ years in the business, we understand the legal requirements for tax and audit, the business needs, and the technical aspects of compliance. Joining hands with TJC Group will help not only to ensure an effortless and time-effective SAP DRC implementation but also a seamless assistance post going live.
SAP knowledge: TJC Group’s knowledge covers SAP solutions, tax, technology, and more. Our organisation’s extensive expertise can bridge the gap between stakeholders and create proficient synergy between the tax and IT teams.
Subject matter experts: We have subject matter experts with us; these experts have broad experience working on both tax and SAP projects. Additionally, we have a dedicated Business to Government (B2G) team to help ensure that organisations are in compliance with the ongoing regulatory changes; further helping them avoid non-compliance charges and reputational risks.
State-of-the-art technology: As a company that pushes and embraces new technologies, it is safe to say that one of the most significant strengths of the organisation is its advanced technology. You will be surprised to know that more than 40% of our workforce is dedicated to R&D to help ensure the smooth operation of all processes.
The final word
TJC Group offers a unique value proposition, a customer-centric way forward, and a proven track record of successful projects. Our strong partnership with SAP helps ensure that we have access to the latest innovations, keeping us updated about the upcoming market and industry trends.
Coming to SAP DRC, it is nothing short of a game-changer in the e-invoicing, e-reporting, and digital tax landscape. Not only can you streamline your operations but also stay compliant in today’s ever-changing and rapidly growing digital world.
Connect with us today for a demo and let your SAP DRC implementation challenges take the exit!
Useful links per country
Additional resources
Resources from international organisations
eInvoicing Country Factsheets for each Member State and other countries (europa.eu)
VAT in the Digital Age (europa.eu)
The e-invoicing voice in Europe – EESPA
SAP useful links
Announcements of Legal Changes – SAP for Me
Regulatory Change Manager (cloud.sap)
