This article describes the needed changes regarding the VAT rate change for Basware AP Automation solution, how to implement these changes and when and how to request assistance from Basware.

Table of contents

• How to implement VAT rate changes in Basware AP Automation
• New tax code
• Updating Spend Plans Taxes
• Updating Spend Plans Sums
• Updating Coding Templates
• Order Matching
• Updating Purchasing Categories
• Updating Purchasing Contracts
• Updating Purchasing Budgets
• Updating Custom Data Maintenance Tables
• Next Steps

 

How to implement VAT rate changes in Basware AP Automation

By following these generic instructions, you can complete the VAT change in your Basware AP Automation solution.

As Best Practice, create the changes first in the Test environment, test and after successful testing, create the changes in the Production environment.

 

New tax code

New tax code can be either imported from the ERP system via integration or created manually in P2P Administration module.
Note: Depending on the regional settings of the user, the decimal separator in Tax percent can be a period or a comma (e.g. 25.50 or 25,50).

Option 1: Create new tax code

• New tax code will be used for invoices with goods receipt after the new VAT rate becomes effective (e.g. 1.9.2024)
• Old tax code will be used during the transition period
• Old tax code will be used for possible future credit notes (linked to invoices before the new VAT rate becomes effective, e.g. 1.9.2024)

Option 2: Modify existing tax code

• Modify Tax Percentage on the day when the new VAT rate becomes effective (e.g. to 25.5% on 1.9.2024)
• Create temporary tax code with the old VAT rate (e.g. 24%) to process old invoices and possible future credits

Note: Option 1 is the recommended approach as modifying an existing tax code could cause confusion on invoices in workflow and result in problems in tax reporting.

 

Updating Spend Plans Taxes

Spend plans support mass update for tax codes and expected sums.

To update Tax Code, select multiple Spend Plans from the list view, use the Update coding action, select Tax Code field, replace the old code with the new code (e.g. 24% code with the 25.5% code).

This has to be done separately for each type of spend plans (budget, schedule, self-billing). In case tax codes are company specific, only invoices from one company can be selected in one mass update.

1. Select an Organization
2. Click Plan Type column to sort Spend Plans by type
3. Select multiple Spend Plans with the same Plan Type
   
   
4. Select the action Update coding
   
   
5. Select the Tax Code field
   
6. Enter the old Tax Code in the Find column and the new Tax Code in the Replace with column
   
7. Click Update to start the batch action

 

Updating Spend Plans Sums

For the spend plans created using net sum as the expected sum, the assumption is that the expected amount remains the same.

For the spend plans created using gross sum as the expected sum, the assumption is that the supplier will add the increased tax amount in the invoice total.

In case spend plans have small or no tolerance, the gross sum should be updated to reflect the new totals. This can be done from the list view by selecting all Schedule-based spend plans where Sum Type = Gross, select Update Sums, select Start Date 1.9.2024, and add the increase in %.

Note: Based on your settings, updated details may require re-approval. If you do not see a need to ask for new approvals for the tax code change, the re-approval settings can be temporarily changed from Data management > Spend plans > Reapproval settings.

1. Select multiple Spend plans
2. Select the action Update sums
3. Select Start date 1.9.2024
4. Select Unit Percent
5. Enter Change value 1.21
   

Note! 1.5 percentage point increase in tax rate is approx. 1.21% increase in invoice total sum.

 

Updating Coding Templates

Coding Templates can be modified from Data Management > Invoicing > Coding Templates.

Automatic Coding Templates should be modified after August period closure (or when most of the new invoices are assumed to have goods receipts on September).

Shared and Personal Templates can be updated while using the template for the first time with the new tax rate (this can be done directly from the invoice). When saving Coding Template with the same name, the existing template will be updated.

1. Select Save coding as template from the invoice
2. Type the exact same name
   
3. Confirm replacement
   

 

Order Matching

Basware expects orders imported from external systems to have the new tax code for the lines for which goods receipts have been done after the new tax rate becomes effective (e.g. 1.9.2024).

Net Sum based matching: Orders having incorrect tax code, invoices are stopped in the incomplete for transfer queue due to mismatch between invoice header and coding rows.

Gross Sum based matching: Orders having incorrect tax code could be automatically processed if price tolerance is more than the tax difference (e.g. tax rate increases by 1.5 percentage points, sum increases by 1.21%). During the transition period, it is recommended to check the Tax Difference field in such cases before transferring invoices to ERP.

Note: To prevent incorrect tax codes for small value invoices to be falsely treated by rounding difference, tolerances for rounding templates can be lowered from Data Management -> Coding Templates for the transition period.

 

Updating Purchasing Categories

1. In Data management > Purchasing > Purchasing categories, check how many Purchasing categories contain the old tax code. Use the Export to Excel functionality.
   
2. Update the new tax code to any Purchasing categories using the old code and import the changes from Excel to Data Management.
   
   

 

Updating Purchasing Contracts

If purchasing contracts are in use with gross sums, check the tax codes used in them. If they are not valid, the contracts need to be re-imported from the external system with valid tax codes.

 

Updating Purchasing Budgets

1. In Data management > General > Budgets, check if budgets with the amount type gross are in use.
   
2. If required, close budgets and create new ones with new gross totals, because budgets cannot be edited. More information on how to create dynamic and manual budgets can be found from here:
   Purchase - How to - Budgets (dynamic)
   Purchase - How to - Budgets (manual)

 

Updating Custom Data Maintenance Tables

Check from Data management > General > Table maintenance if there are any custom maintenance tables that contain tax codes/tax percentages and update them.

 

Next Steps

Once ERP system has the new tax codes, try out invoice processing and related actions in test environment.

Basware can offer assistance via service request, such as:

• Creating & sending test e-invoices having the new tax rate (with defined supplier, PO number, etc.)
• Analyse integration and/or customized enrichment for any tax code related logic
• Support and participate in testing
• Participate in cut-over / transition period planning

To request Basware service, you can reach out to Basware Delivery Consulting by Requesting a Service in the Customer Portal.