Digitization is the big challenge for companies in the next few years. The digital transformation is not only taking place in traditional internet industries. Digital networking has long since reached the processes of small and medium-sized companies.
Our “Digital Finance” service area focuses on digitization in your finance department. Digital Finance is the replacement of analog processes and the introduction of automated processes from document processing to monthly and annual financial statements to tax returns. If you recognise the necessity of this change for your company, you are setting the course for the future.
Kleeberg points the way to the future
Digital Finance is revolution and evolution at the same time. It is a path for which you need a strategic partner. The IT, legal and tax experts at Kleeberg offer holistic solutions and advise you on all strategic questions and decisions regarding digitization.
Digital Finance is an important project for the future of our company
Electronic document processing
There is considerable potential in the transformation of manual processes. Paper as a communication medium within a company and to the outside world will give way to suppliers and customers. Every area of the company can benefit from the generation, provision and processing of documents in digital form. This includes ordering, incoming and outgoing invoices, payments and processes in human resources such as travel expense accounting or payroll accounting. The automated processing of receipts means a great gain in efficiency in these areas. Electronic workflows guarantee short processing times and higher transparency. Process reliability is increased by automatic control mechanisms such as the dual control principle.
The goal is a standardized exchange
More and more companies are starting their digital finance project by automating the receipt of invoices. Incoming paper invoices are scanned and stored digitally. However, the aim must be to receive the invoices directly in an electronic format in order to ensure optimum processing. Electronic formats such as ZUGFeRD or the new XRechnung have become established for the standardized exchange of invoices.
Even if documents are generated and processed digitally, their treatment must always comply with commercial and tax law requirements. This aspect must not be neglected in a digital finance project. A major advantage is that the specifications are technology-neutral. The use of certain systems or techniques is therefore not mandatory.
The GoBD set the pace for a legally proper design of digital document processing. The “Grundsätze zur ordnungsmäßigen Führung und Aufbewahrung von Büchern, Aufzeichnungen und Unterlagen in elektronischer Form sowie zum Datenzugriff” (Principles for the proper keeping and storage of books, records and documents in electronic form as well as for data access) contain essential requirements to which every process must be oriented. But also other regulations like the sales tax law are important.
With the following terms we give a short overview of essential aspects. With the right design of these and other points, we support you competently and purposefully in your Digital Finance project.
The processes in your company must ensure that incoming or emerging documents are promptly secured against loss. This can be achieved, for example, by storing documents in an archive system, but also by other measures such as strict rights management.
Internal Control System
The existing risks in document processing must be countered with appropriate measures. To this end, an internal control system (ICS) must be set up and documented. Often a difficulty: the correct evidence. Positive side effect: the ICS enriches a tax compliance management system.
Digital receipts can be stored worldwide in a cost-saving manner. However, storage abroad or by a service provider can lead to problems with the authorities and must therefore be clarified in advance. The IT infrastructure must be able to store the documents for more than ten years.
Digitization poses great challenges for ERP systems. Once the potential is exhausted, the only option is to switch to new software. When migrating, not all data from previous years is usually transferred. However, it must be ensured that they can be evaluated, either using the old software or using separate tools.
In every document processing process, the process documentation is an elementary component. It serves to make the current and all previous process flows comprehensible. Usually, process documentation consists of several parts that cover both the technical and the user side. See also the following section.
Incoming data records (e.g. via EDI) are often converted into an in-house format for further processing. The original formats must also be retained. Important: Existing data structuring and its readability must be retained.
The process documentation is now requested in every tax audit. Due to complex tax-relevant processes like the integration of webshops, cash systems or the processing of electronic invoices this is a comprehensible step, finally the auditor must form an overview of the used systems in appropriate time in order to be able to examine purposefully. If no process documentation can be submitted, this affects the audit atmosphere and the results negatively. In the worst case, there is a risk that the bookkeeping will be discarded and estimations for the tax basis will be made.
The companies usually have documentation such as instructions, user manuals, technical manuals or process descriptions of their essential processes at their disposal. These are just not yet summarized under the term of a process documentation. With the professional support of the experts at Crowe Kleeberg IT Audit, process documentation is set up in five standardized steps.
1. Creating a System Overview
First, the essential business processes are recorded and the tax-relevant systems identified. The result is ideally a graphic overview with the representation of processes and data flows, which already answer the most important questions to a tax auditor.
2. Review of existing Documentation
For the tax-relevant systems and processes, existing documentation in the form of company guidelines, organizational and work instructions, user manuals, technical documentation and even operational documentation is compiled and viewed.
3. Assessment the processes including the internal control system
Depending on the scope of documentation, existing tax-relevant processes are assessed in order to create a common understanding. This is done by interviewing employees, observing workflows and analyzing data flows. In this process, existing internal controls are identified.
4. Supplementing the Documentation
Missing documentation that is important for understanding a process or system is created. Insufficient or outdated documentation is revised to bring it up to date. Meaningful internal controls are implemented.
5. Assembly of the Process Documentation
The existing documentations are combined with a uniform document, which functions as a document collector. This document, together with all other documents to which reference is made, constitutes the process documentation.