Case study subpage three

Client Background

The client has sales through multiple channels via different systems and faces the challenge of maintaining accurate sales data in books from various systems, including their POS and ERP platforms. They needed an automated solution to reconcile e-invoices and data in accounting books, ensuring compliance with ZATCA VAT regulations.
‍

Challenges Faced

Data Discrepancies:

Sales data in the accounting books was inconsistent with e-invoice data. With 50,000 e-invoices generated daily, discrepancies between the accounting records and e-invoicing data led to financial reporting issues, including an under-reporting of VAT by 500k SAR to 1 million SAR.

Multiple Source Systems:

The client had multiple systems with different data formats, making it difficult to reconcile the data and identify discrepancies.

Missing Invoices:

Some invoices and refunds were not submitted to ZATCA as e-invoices, and some invoices were missing entirely from the accounting books.

Manual Reconciliation:
‍
Due to the sheer volume of invoices, the reconciliation process was done only on a sample size of invoices manually, leading to gaps and incomplete verification. Extremely time consuming process that consumed a significant bandwidth of the tax team.

Volume of Data:
‍
The high transaction volume (50,000 daily e-invoices) necessitated a solution that could scale and automate reconciliation at a detailed level, instead of relying on manual checks and reconciliation using excel.

Solution Implemented:

To address these challenges, Cleartax provided a robust, feature-driven solution with the following components:

Data extraction and automation:

TOSHIBA POS: Setup an automation to extract daily reports with over 500k line items and a custom transformation logic to make the data ready for reconciliation
Other ERPs: Monthly sales reports from systems like Oracle ERP, e-Commerce data lake and other systens, each containing 100k+ line items, were consolidated using custom algorithms to setup an automated data prep and upload mechanism
The reconciliation was automated through custom rules to link and match the data with e-invoicing records

Consolidation and Reconciliation with ZATCA e-Invoice data:

Line-item level data was transformed into document-level data, ensuring consistency across all platforms and systems.
All sales data was reconciled with e-invoices submitted to ZATCA from the Cleartax E-Invoice platform.

Reporting & Insights:

Standard Report: Provided a clear overview of how many transactions matched, how many did not match, and identified high, medium and low risk discrepancies.The tax difference is also highlighted to plan corrective actions.
Additional Reports:‍
‍Day-level reconciliation reports highlighted days with significant discrepancies.
Store-level reconciliation reports identified specific outlets and terminals with discrepancies, enabling targeted process improvements.

Stress Testing & Proactive Support:

Extensive stress testing was conducted to ensure the solution could handle large volumes of data with ease.
Engaged with ZATCA for compliance use-cases, ensuring that all invoicing processes met regulatory standards.
Provided 24/7 proactive support and daily check-ins to ensure the system was running smoothly and efficiently.

VAT compliance flow:

Outcome:

To address these challenges, Cleartax provided a robust, feature-driven solution with the following components:

Fast Implementation:

The integration was completed within one month
A robust User Acceptance Testing (UAT) process was executed in a record three weeks to ensure the solution was error-free before going live.

100% Accuracy in E-Invoicing:

Post-implementation, the solution ensured 100% accuracy in e-invoice generation and reconciliation, eliminating discrepancies and meeting VAT reporting requirements.
Within one month, Reconciliation results revealed that 11.5% of invoices were missing from the e-invoicing data, equating to a VAT discrepancy of over 10 million SAR.

Business Impact:

The client’s VAT reporting issues were resolved, preventing potential fines and complications due to audits at a later stage.
The automated reconciliation process significantly reduced manual effort on an average by 5 man days per month, ensuring compliance while improving operational efficiency.

Thank you for your interest. Our experts will contact you soon.

Oops! Something went wrong while submitting the form.

How ClearTax Helped a Large Retailer automate output tax Reconciliation to Achieve VAT Compliance and Operational Efficiency

Client Background

Challenges Faced

Solution Implemented:

To address these challenges, Cleartax provided a robust, feature-driven solution with the following components:

VAT compliance flow:

Outcome:

To address these challenges, Cleartax provided a robust, feature-driven solution with the following components:

Book a demo