Increased tax compliance and reduced risk for CFO’s
Looking at a risk perspective, with introduction of real-time invoice reporting in Poland the quality of data and information is expected to improve significantly. As a result, the potential risks of additional fines due to lack of invoicing, late invoicing or empty fake invoices, as well as VAT sanctions should be much lower for a board members and those responsible for finance matters. And naturally, the potential risk for investors of being noncompliant with the local provisions will be minimized. The implementation of e-invoices will require proper preparation for such a process, also from the financial side. Importantly, the documentation of transactions and possible mistakes will be very quickly identifiable by the authorities, long before the submission of the monthly SAF-T file. Thus, the work of persons responsible for the invoicing and data verification process will be focused to a greater extent on the earlier stages in order to ensure compliance with the law, even before the data is sent to the KSeF.
Reducing administrative work for accounting teams ?
Providing the tax authorities with accurate information may lead to reducing the risk of errors and omissions in the invoicing process, which obviously will decrease number of typo mistakes and correcting invoices. Therefore, the =finance people will be able to refocus their day-to-day activities, shifting from repeatable and time-consuming tasks to becoming involved into more complex tax topics. For instance, as the tax authorities will have full access to data because of real-time reporting, the aim of monthly or annual post-fillings will not have any meaning for reducing the VAT gap. During the transition period most likely the option of automatically pre-filled VAT returns would be used. Real time reporting will decrease effort required from taxpayers during tax audits as many relevant information would be available for the tax authorities in KSeF. We envisage that introduction of real time reporting will decrease number of VAT fillings in a long term perspective. It can be especially relevant for CFO’s supervising multiple entities being separate reporting unit for VAT reporting purposes.
Positive impact on cash flow
Real-time reporting may increase cash flow through more timely payments and easier tracking of overdue payments, including the extra deduction for tax purposes possible in some jurisdictions: so-called bad debts relief. From CFO’s point of view it is a significant factor which may reduce risk of late payments, especially important for smaller businesses. When it comes to tax settlements, as all invoices would be available for the tax authorities process of VAT refunds would be faster and simplified (40 days instead of 60).
Decreased costs of processing invoices
Our experience has proven that invoicing process involves a high volume of manual processing, which may be reduced by using real time reporting. This is though not an advantage visible at the first stage of implementation as we need to engage many shareholders and incur additional IT costs. What is more, during the initial step of the real-time invoicing revolution, one of the biggest challenge is the increased administrative burden and a proper setup of communication and division of responsibilities between stakeholders, especially finance and logistics teams.
Nevertheless, it is widely expected that the long-term gains of the real-time invoice reporting will be a reduction of manual processing, simplification of accounting processes and significantly decreased of human mistakes, especially given that there will be one official template of the invoice provided by KSeF. In practice, all invoices visualized in a form of pdf document will look very similar and finding right information on the invoice will be faster,. Considering the huge number of invoices issued per year potential savings are worth considering.
Run your business smartly
Real-time reporting will bring up a great source of reliable data for CFOs needed to manage the business effectively. It will enable much pacey tracking of expenses and revenues generated by each entity. Ultimately finance & controlling teams will use one source of information in order to manage daily operations, verify the status of invoices issued to contractors, as well as plan an appropriate budget for the next period. Additionally, invoices circulation system between the seller and purchaser and the tax office would be significantly simplified.
When we consider implementation of real-time reporting model certainly it will affect company’s operations. Firstly, there is a topic of integration of accounting systems for the purpose of real time reporting as currently quite often invoices are generated in different systems outside of ERP.
Other areas of special interest that have become evident when performing projects regarding real-time invoice reporting are process optimization and the new split of responsibilities between issuing invoices, posting purchase invoices, and producing internal documents.
Without a doubt, the upcoming introduction of real-time invoicing in Poland should be of particular interest to each CFO, as it may be a starting point for internal transformation of the tax function..
Key actions to be taken – e-invoicing readiness check
Taking into account upcoming busy season of financial teams due to year-end closing process, group reporting and audit, it seems that there is not much time left to start work and ensure that e-invoices are implemented and business may run in 2025.
A key factor determining the success of any e-invoicing project is proper pre-work. Performing an analysis of business processes within the organization is a must have step in order to check to what extent our organization is ready for the implementation of e-invoices.
Further, it is an issue of developing Company’s tax procedures and processes which have direct impact on business operations. Apart from e-invoicing project it is also a chance to look how to streamline the processes and boost efficiency. That step is usually called as e-invoicing readiness check.
Once pre-work is completed each organization should think whether real time reporting will be implemented using our internal resources, by third party or based on a mixed solution involving both groups.
Based on our experience from similar projects, e-invoicing project requires participation and managing of IT team, finance people as well as business team. Hence, global IT teams as well as finance people should their calendars in advance. The time to act is now, especially taking into account the upcoming revolution in CIT reporting (the so-called JPK-CIT).
