Content. GST Impact on ERP Technology Level-wise Impact Areas of Impact How you help Customers for Migration Getting Started

Transcription

1 GST Impact on ERP

2 Content GST Impact on ERP Technology Level-wise Impact Areas of Impact How you help Customers for Migration Getting Started

3 GST Impact on ERP Why ERP Impacted? New taxation logics Corresponding amendment in business processes Subsequent changes on point of taxation at transaction level Key Challenges Accompanied: Customization on standard products Missing patch level: Lack of ERP documentation: Timelines for upgrading existing ERP Customization done over the standard module resulting in change in system architecture Historic & recent patches not updated Discontinued AMC or Support Contract from the OEM Non-updated or non availability of Business Blue print/ Functional Requirement Documents. In appropriate track of Changes/Updates/Upgrades on the ERP Since the clarity on final GST is awaited and we are just 6 months away from going into live scenario of GST, the timelines to upgrade the ERP system is very rigid.

4 Technology Level wise Impact For the purpose of understanding impact on technology, we need to classify technology products used by different entities into two categories, i.e. Enterprise (Configured) Level Tools ERP products are integrated platforms automating client s different business processes into one common platform. SAP Oracle Microsoft Dynamics AX S No Area Enterprise Level Standard Level 1 Chart of Accounts / General Ledger Structure a a 2 Forms & Report (invoice, Challan etc.) a a 3 Tax registers such as Input out put registers a a 4 NAV Ramco ERP TCS ion, etc. Tally Busy Master Data Management (Updation of vendor masters, customer masters and item/inventory masters) 5 Number ranges (for invoices, debit notes / credit notes) a a 6 Adaptability (versions of existing ERP) a 7 Process Management a 8 MIS Structure (Reporting & Dashboard) a Standard (Out of the Box) Tools Accounting tools are products used by companies to comply with accounting and compliance needs. a Marg QuickBooks

5 Area-wise Impact Chart of Accounts (CoA) / General Ledger Structure Opening of new GL accounts Open new location specific GL accounts in existing Chart of accounts Blocking of transactional flow from existing tax accounts CoA is on existing GL accounts for tax related GL s Which GL accounts are to be blocked for postings Which GL accounts to be kept open for any possible transaction coming post GST. Master Data Management Details of input tax and output taxes GL mapping for Consolidation of Financial Statements Consolidation of Financial Statements GL account mapping in consolidation engine would be required to be changes. 1 Mapping of GL accounts with tax codes in ERP Changes on Tax calculation procedures Mapping of GL accounts will tax structure and the same is possible only once GL accounts are created. 5 Customization of Forms & Challans Sales invoice / bill of supply Accounting tools & ERP have their sales invoice designed as per current laws, these needs to be customised as per requirements of GST and the tax calculation formulas would also be required to be changed. In addition to existing forms there are certain new forms, such as bill of supply to be created. Creation of new number series: Basis requirement of GST each company will have to follow unique number series for GST invoices in specified formats. Now business has to decided on number series for each location having separate registration under GST. In addition to this number series should also accommodate different locations under same registration. Master Data Management Customer & Vendor Masters Update existing active customer master and vendor masters with GST codes. Re-Organize customer or vendors with multiple location. Inventory masters Update existing inventory masters with HSN code prescribed under GST

6 How you can we help for Migration? Once the system has been upgraded with the broader points highlighted above, the next critical factor would be decide on migration strategy from existing tax scenarios into ERP world. Cutover date identification Key decision points for migrations: Close or Amend open PO s on Cut-Off date. Close or Amend open Sales Orders on Cut-Off date. Forms & Templates, GST Ready: Sales invoice Sales order Purchase order Debit notes & Credit notes Temporary provisions: Returns of goods sold or purchased before GST and returned after Cut-Off Stock in transit during cutover activities, etc. Testing of scenarios as per GST Creation of test scenarios: Business users must create the test scenarios basis possible business transactions impacted by GST Perform testing: Basis test scenario perform testing with live data and evaluate the results as per testing. Basis these test results the final changes should be made in ERP.

7 Getting Started Factors affecting readiness: Which ERP is used by company? Level of Usage Level of Customization Impact of GST on business processes Transformation Approach : Get a detailed GST impact analysis (recommended) Impact Analysis shall include Review of business scenario coverage Ascertain the existing business scenarios to be impacted by GST Identify any relevant business scenarios not mapped in ERP Validate the adequacy of the ERP organisation structure for mapping of the relevant business scenarios Verify if the localisation version patches are available. Ensure correctness and completeness of master data Vendor Customer Service tax registration numbers, VAT registration numbers, etc. Analyse the impact on various reports which are submitted to the tax authorities. Basis result of impact assessment, identify whether changes are required to be performed in house or through an external third party vendor.

8 Thank You