Acer uses Avalara VAT Reporting to streamline its VAT management process

Founded in 1976, today Acer is one of the world’s top ICT companies. As Acer looks into the future, it focuses on enabling a world where hardware, software and services fuse with one another to open up new possibilities for consumers and businesses alike.

Trading with over 90 countries in the EMEA region, this multinational’s EMEA tax department is not for the faint hearted.

Posky Idnani, Acer’s EMEA Tax Manager explains: “Acer EMEA tax department has been at the forefront of responding to the ever-changing tax landscape and tax compliance is at our hearts of everything we do. The evolving ecommerce business, in particular, demands swift and precise response for VAT management”.

Supply chain VAT optimisation is a complex science and covers every aspect of the way the company interacts with suppliers, particularly where parts are shipped across borders within the manufacturing process.

As Posky explains, “Optimising VAT chains is all about optimising cash liquidity and putting in place the right processes with our corporate supplier network to make it more VAT efficient. You don’t want to pay VAT that you can’t recover or pass on to customers, for example from importing components.”

“Structuring the supply chain to be most economical for yourself and your customers means making sure all the contractual agreements have the right clauses to make the process VAT efficient,” he continues. “This opens up a world of complexity, because VAT always follows the goods movements, and for services you are looking at ‘bill to’ arrangements which follow different VAT rules. There’s a wealth of complexity around movements, place of supply rules, use and enjoyment and above all, timing.”

Acer has its own proprietary ERP system that was developed in-house. Part of the challenge for the tax team at Acer was making sure that their data could be adapted for the different reporting requirements in different countries. A situation further complicated by the fact that even EU countries that have adopted the SAF-T reporting model can require different supporting data.

Achieving successful supply chain optimisation calls for an intimate understanding of the VAT rules and how they apply, which in turn is furthercomplicated by the EU’s regular attempts to improve its own efficiency, which often make life more complex for the VAT payer. By partnering with Avalara, Acer has access to the detailed VAT knowledge of its specialist team, who ensure that VAT Reporting is always up to date with all the latest regulations, rates and reporting needs.

The key to success with VAT lies in having the correct master data, which may well be distributed around an organisation in different instances of the ERP application. This is where, by working with Avalara VAT Reporting, the team at Acer have been able to hugely streamline their VAT management process and dramatically reduce errors and omissions.

"Tax authorities don’t like mistakes, which can end up costing you far more than the cost of implementing technologies to avoid them,” Posky comments. “What we have done with VAT Reporting is to integrate it into our ERP/VAT processing so that every transaction is now put through VAT Reporting seamlessly and checked on the fly.”

The data structure to integrate VAT Reporting with so many instances of the ERP application, in the 17 countries that are up and running using their Avalara solution, is very detailed. Whereas historically each country VAT controller would download and reconcile reports to prepare monthly returns in Excel, the system is now automated to extract the logical VAT data from all the systems. The data is then filtered, checked and uploaded each day into VAT Reporting as a batch process.

VAT Reporting then carries out over 140 checks and identifies any issues with the data. Some of these are autocorrected within the system, while others that reflect errors in the master data will be flagged and rejected, and the local country data managers alerted to correct the source data and re-upload the corrected file.

“The whole process is seamless and saves an incredible amount of time,” Comments Posky, “and it has allowed us to develop some even more fascinating aspects of the system, such as a BI dashboard for VAT Reporting which allows us to show local managers how their data quality compares with others and where the errors are coming from.”

Automation of their VAT process with the time savings and risk reduction that brings is just one of the benefits Acer has found by working with Avalara. Posky says: “One of the reasons we chose Avalara over its competition was that it allowed us to develop much more innovative and useful automations that can be integrated into our normal workflow.”

The teams at Avalara not only helped Acer ensure seamless integration with their proprietary ERP, they are also working with them on future challenges. Posky continues, “It’s fantastic to be able to rely on trusted business partners like Avalara, to make sure we get things right. It’s an exciting journey and one we’re looking forward to taking to the next level as we start to implement real-time systems such as AvaTax which we anticipate will again deliver massive efficiencies.”