ERP (Enterprise, Resource, Planning) systems – Ensuring VAT accuracy
Centurion is regularly involved with the evaluation of new (and existing) VAT accounting systems for our clients to ensure that they meet their needs in terms of their business activities and coverage as well as for HMRC compliance on VAT, EC Sales Lists and Intrastat return submission.
Brexit and the changes that will bring for supplies to and purchases from EU customers and suppliers means that all businesses with EU trade will need to review and update their VAT accounting systems to some extent.
Our observation is that whatever system is adopted it should not be assumed that a standardised package will do everything that you may want or expect. Nor will it produce all the reports that you need.
Therefore, it is vital to review the standard VAT reports in conjunction with all the activities that the business has or may have in future to know how they will be reported and to look at how complete the coverage of purchases is too. For example, will the system be able to report purchases that should be subject to the reverse charge? Can it cope with cross border chain transactions?
Pre-implementation testing of the system is also recommended so that any glitches or omissions are identified and resolved before any declarations are made. A VAT review of the system may highlight examples of sales scenarios that a standardised system won’t be able to report accurately or it might identify the benefit of further VAT codes that would allow the business to more readily identify useful information, such as an import code to assist with C79 and Deferment account reconciliation.
Time given to consider VAT compliance at the systems implementation stage can also identify staff time-savings on tasks that have, to date, required more manual effort, for example a VAT code or report that identifies foreign VAT for reclaim more readily than the existing system and can be used to make foreign VAT claims each year.
The Centurion team can offer to carry out pre-and post-implementation reviews to help ensure your accounting systems deliver accurate and complete VAT data to protect your organisation for exposure to errors and penalties. To get in touch with one of the team please contact us on 01633 415390 or using our internet address firstname.lastname@example.org