The Entry Certificate: Lots of catching up to do for many companies
Numerous companies have not yet managed to comply with the new Entry Certificate requirements implemented by the German tax authorities at the beginning of this year. The failure to provide verification for the delivery of goods within the EU carries the risk of significant subsequent VAT payments. IT solutions like Mercoline’s M.SecureTrade Entry Certificate can enable companies using the SAP ERP application to dramatically reduce expenditures and automate many processes.
Despite all the protests from the business community, Germany’s federal government still put its verification obligation into effect at the beginning of this year, the only such legislation of its kind in any EU country. According to the new law, companies within the EU receiving goods from Germany have to confirm the receipt of such goods. If not, they lose the VAT privilege for EU intercommunity goods and services. The German tax authorities still accept a variety of verifications other than the Entry Certificate, including signed paper documents and e-mails, electronic documents and the track-&-trace data from courier services. “This still means extra time and expense for German companies”, according to Falko Richter from Berlin-based SAP services partner Mercoline. He continues, “Some large companies have even posted job vacancy notices to deal with this bureaucratic nightmare”. Companies using SAP ERP have an intelligent alternative to the expense of adding new staff. With Mercoline’s M.SecureTrade Entry Certificate add-on many associated p
rocesses can be automatically integrated into SAP systems for auditing. Mr. Richter explains, “Many companies are still hesitant to implement an IT solution have simply tabled the issue. The situation is similar to the ATLAS conversion five years ago or the recent introduction of the SEPA procedure. Sometimes an auditor from the German tax authorities just has to show up at a company. When that happens, they suddenly react quickly and start asking us for offers right away”. Mercoline made that kind of stress avoidable as one of the first companies to introduce a solution back in early 2013.
Berentzen uses the web portal and other electronic reporting procedures.
Our customers’ experience clearly illustrates how our solution can reduce administrative processes. Berentzen is a spirits company and Mercoline customer that supplies its liquor products to all 28 countries in the EU. Most recipients of Berentzen goods automatically receive e-mail notifications about every delivery. This includes a one-time link to a Mercoline web portal where they can view all of the details related to the delivery and confirm receipt of the products with two simple mouse clicks. A status monitor in a traffic light design notifies Berentzen about which verifications have already been received and where they need to follow up on an order. A green traffic light means the Entry Certificate has been received and directed to the SAP system, where it is stored automatically. Helmut Kuddes is in charge of SAP process organisation at Berentzen. He explains, “This solution saves us a great deal of time and money, because most of what it does runs automatically in the background. We use it to process several hundred transactions each month, and we are very satisfied with its performance”. In addition to the Entry Certificate via one-time link and web portal features, this solution also makes it possible to electronically report data in a variety of file formats. For example, Berentzen customer Lidl sends its Entry Certificates to its suppliers automatically in the XML and PDF formats, where the goods receipt verifications are then also automatically imported into Berentzen’s SAP system, allocated to the correct procedure and stored as valid Entry Certificates. Mr. Kuddes summarises by saying, “We chose the Mercoline solution because we wanted to monitor all of the processes directly in the SAP system and because it is easy to adapt to the company’s needs”.
Automatic track-&-trace data processing
Entry Certificates can also be processed with particular ease if the company uses track-&-trace data from shipping companies or courier services like UPS and DHL. German company Winkler+Dünnebier GmbH (W+D) uses this approach. Each month the company sends out around 900 packages with replacement parts for its envelope manufacturing machines, some 500 of which go to recipients within the EU. Most of the packages reach their destinations via courier services such as UPS, DHL or TNT. As soon as the recipient has confirmed receipt of the goods, this status information is transferred by Mercoline’s EDI services into the W+D SAP system and then used to automatically process the Entry Certificates. W+D has been processing around 90 percent of all its Entry Certificates with M.SecureTrade Entry Certificate in this way since November 2013. W+D Logistics Director Uwe Peine explains, “This system makes our employees’ work much easier. Without this IT solution we would have had to create a new position strictly for processing Entry Certificates. Now the whole procedure only takes a few hours each month”. M.SecureTrade Entry Certificate operates on SAP ERP Version ECC 6.0 and later versions. It is an add-on that can be installed in just a few days and adapted to the customer’s individual needs, enabling our customers to do things such as defining different channels for processing Entry Certificates on the basis of the specific country and customer.