This would be a huge benefit to us. We went through an extensive evaluation of the available suppliers and what they could provide when we first started implementation and quickly found that there were no offerings for On Demand. We would have to develop a method for populating the csv file monthly and get the new files from the provider. None of the providers seemed to have a good grasp of what they would have to be able to provide for this and it promised to be very expenseive.
Thanks for the response. Really interested in how companies could use integration of Tax software providers and also I'm really interested in how you are handling Tax today without this integration. Some companies are doing "Self Assessment" but would like to move to Tax Software if they could get it integrated in their AP systems.
It would be great if some of our customers could share how you are handling Tax today if possible. Very good learnings for us.
I am still looking for a way over here but found a website that seems to be promising. Thinking of presenting this to my higher powers after doing the proper research on them to see what they can offer and if they can plug into Ariba to give us what we need.
Also, I have been reconciling a lot of invoices... Came across many vendors who charge tax on shipping when they should'nt. Just FYI to doule check everything...
Yes, tax on shipping is a common problem. We have recently had a customer report that they are using a tax software company to generate the standard Ariba tax tables. We can check to see if that customer is willing to talk to you about their decision making process if that is interesting to you.
We in purchasing see the advantage to tax integration because of the potential savings/liabilities on a per transaction review rather than the after the fact aggregate view that we are currently performing. Use taxes are an area that the tax software could help in getting greater visibility. However, the change in business process from a batch review by a third party (current process) to a real time analysis has huge resource implications that we are not prepared to address.
IMHO, integration is the key word in the title. If Ariba were to provide a partnership (value added service) with tax firms that provided seamless enablement of tax validation a significant barrier to adoption would be removed. Arranging the tax tables for loading is just another reason not to enable this functionality.
Russ, the product management team at Ariba is looking into integration of tax providers into the ariba solutions just for this purpose. From a product research perspective we have been looking into five key integration points. Can you and others please share where is the most valuable integration point relative to your business and how you want your business to run. Just for full disclosure we are looking at tax integration and freight/shipping amount integration at the same time. So assume the five areas below also would potentially provide a shipping/freight amount.
Integration Points we are researching: (please share which integration point works best for your business)
1. Quote from Seller - estimated tax on the quote to represent total cost
2. Catalog from Seller or created by buyer -estimated tax on catalog line items so when items are selected for a requisition they include the tax
3. Buyer Requisition creation - tax software generates for the buyer a tax amount on the requisition so that the buyer and approvers have visibility into total cost and for budget check reasons there is a more accurate budget capability.
4. Seller Invoice creation - At the point a vendor plans to submit and invoice the tax is applied and validated to help ensure the tax is accurate when the invoices reaches the buyer.
5. Buyer Invoice Management - At the point the buyer receives an invoice the tax software will validate the tax provided by the supplier and if it is incorrect the correct tax will be applied and what I think is a cool feature potential, the supplier is immediately notified that the tax was wrong even prior to the buyer correcting the invoice. Helps both buyer and vendor as the vendor can have clearer visibility into any change in what they will be paid.
Finally, we are looking at features that will help customers who want to keep performing "self reported" tax and who have a large mix of non-taxable cost of good sold purchases and taxable indirect spend.
The Product Managment team at Ariba would very much appreciate a continued dialog and potentially follow-up phone calls with customers. We are activiely collecting requirements about this feature area and will incorporate all feedback into the resulting solution.
Joe, I agree with your 5 integration points, but since our company has a large content of non-taxable indirect purchases, we would also need a "taxable use" flag (manufacturing use versus non-manufacturing use) on each of our cost centers and on WBS/projects currently interfaced to Ariba. This flag then should be an input factor to help designate taxability.
We currently have a customized solution in our ERP system using commodity codes from Ariba and the above use flag but one of its weaknesses is its dependency on commodity codes that are not always assigned with care. This results in non-value activities to correct our tax calculations when noticed. In our case, substantial amount of purchases are made as non-catalog orders requiring the requisitioner to select the correct commodity. Requisitioners are not dedicated buyers and consequently juggle responsibilities and hence the tax mess at the back end.
One recommendation that we would make, is to facilitate the commodity selection process by defaulting a short list of pre-defined commodities if the vendor is selected first on a requisition. Obviously this would require, a one-time population for existing non-catalog vendors and for new vendors at vendor creation, to map a vendor/commodity combination CSV file.
Our organization has had many discussions on this topic. Should our ultimate solution be a tax bolton software integrated to our ERP system or as you suggest, should it be integrated with Ariba. Our Tax Group is also debating whether to go the "self-reported" route where allowed.
Based on your comments, it would address supplier-billed taxes as well as self-reported scenarios. For self-reported, I assume all of the necessary data would be generated by Ariba to account for taxes.
Thanks for the question. I suggest you speak with your deployment team about "self reported" tax relative to streamlining AP processes. My experience is that "self reported" tax doesn't always help. It can simplify the upfront process but then you can end up with limited accurate data to calculate the tax properly in a "self reported" process. The research we are doing at Ariba to try and address topics such as taxable, non-taxable and self-reported tax are looking into establishing integrated tax software provided by third party providers to help in real-time. As Bert mentions in his post, the actual data used to determine tax will be one of the tricky parts, such as picking vendor and picking the correct commodity. Also, taxable and non-taxable flags will be needed to address both indirect goods that are taxable, indirect goods that are non-taxable and direct materials that end up cost of goods sold and typically are not taxable. Complicated, but we are looking into the potential to help. It's taking time given the complexity.
I also suggest you consider hiring a tax consultant from a firm that knows about Ariba technology such as KPMG, Deloitte, Accenture, E&Y or others. As always with tax it's best to make sure a tax expert is involved, as you know. If you would like I can refer you to a tax providing partner of Ariba. Let me know what country and state your are in so the advisor is best positioned to give you advice.
Integrations 4&5 are the most valuable for Ally. Knowing the tax before the order is created would be useful for budgeting purposes but the practical issues of invoicing against a PO tax line item offset the advantages IMHO. With the states desire for increased revenue, I can only expect this area to get more complex and subject to error. I also expect for the states to do more audits on companies for sales and especially use tax shortfalls.
I would like to see two solutions from Ariba. The first is a standard integration 'API' with the major tax vendors like a punch-out catalog or web service. The second would be a more turn-key service offering like ICS.
I apologize for taking a year to reply to this post. There is no new news, this is still being researched. I will add a comment to this post once we have new progress and will reach out directly to each company on this posting thread to inform you of what direction we are going.