Tell us about the data sources being used for VAT and other returns across Europe. Is that data coming from ERP systems or elsewhere? What about customising for reporting?
Thermo Fisher has come together through a lot of acquisitions and that makes the company structure complex. As a result, we have 60-70 different instances of ERP systems - with SAP and JD Edwards as the main ones. It’s a very diverse and frequently changing landscape.
The main sources of financial data are typically our European ERP systems. For reporting we started by working with the standard functionality and went to IT for additional data points and checks. Sometimes it is simple, but one thing I've learned is that tying together tables in an ERP system is not as easy as you would expect. IT teams can really see what it takes to develop what’s required.
The one thing that you always see in real life is that you have to combine data points from different types of reports. For instance, in a financial module you’ll have standard tax reports, but you can enrich those reports by adding in items from your customer and vendor records. You then have an extensive file – but asking your IT department to build that may be challenging as it is a combination of a lot of tables that need to be pulled together.
Of course, PowerPivot and Power BI can do a fantastic job to deliver information. I think investing more time into these tools is important because a lot of work that you would ask IT to do can already be done with these tools. In addition, the Vertex Data Integrity solution can also be of great help to tie these tables together and then simply enrich the reports.
How do you hope the new Data Integrity solution will improve VAT reporting at Thermo Fisher?
Right now, we are mainly working with Excel, and the Vertex Data Integrity solution is being explored. We know how to use it, but we would like to deploy it to a wider audience. We are in the early adopter programme. We've seen the tool and people have been trained to use it, so the technical knowledge is there.
The super users in our Shared Service Centre (SSC) are examining which of the corrections and tests, that they currently do in Excel, can be performed by the Vertex Data Integrity tool. We are in the initial phase, but the plan is to implement Data Integrity together with the roll out of the new release of the Vertex Cloud VAT Compliance. I have to stress that Vertex Data Integrity is a very good fit in an SSC model. Excel can be used in different ways and can create inconsistencies. On the other hand, once you get people working with Data Integrity, rather than Excel, standardisation can be achieved with a friendly, easier to use interface.
There’s lots of interesting capabilities. Using the look up tables to expand ranges and build more advanced checks is helpful and it’s also a good way to do simple checks on easier returns – you can also make combinations for let's say the five highest amounts that you want to have checked for underlying documentation.
When you look at all the checks and validation steps that you can employ – without giving away too much detail – full completeness tests, logical checks, and destination checks, etc. There is definitely added value in a tool facilitating checks and providing enriched data. For example, I think we can all understand the typical examples of missing VAT numbers for intercompany transactions that have to be plugged in manually. Of course, you can go to IT and ask for data table changes, but it can be quite a challenge in a big company like ours to get to get it fixed in a minute and that's why, of course, the Data Integrity tool has been built.
Daniel Jansen, Senior Manager Indirect Tax | Thermo Fisher Scientific