You are a Finance Executive managing multiple countries, and your teams need to address disparate local requirements, such as:
Keep the books in accordance with local accounting rules
Produce financials statements with specific format and chart of accounts
Apply tax to transactions and submit the tax reporting in compliance with fiscal regulations
Calculate the assets depreciation as per accepted methods
Issue external documents such as customer invoices and payment formats that comply with local regulation and bank specifications
and so forth
In this post, we outline how Cloud ERP customers meet local requirements with different types of functionalities when you
Enable global capabilities, such as the accounting or tax engine, configured in different ways to satisfy multiple requirements
Use country specific features like the Fiscal Document Generation for Brazil or the tax reports available for multiple countries
Work with partners solutions available on Cloud Marketplace
Configure generic data extracts and templates using reporting tools
Oracle Cloud Financials is designed for global use. It is available in 27 languages. You can format fields such as number, date, address, etc. according to local practices. This enhances the user experience for your business around the globe.
Global Capabilities / Engines
Global capabilities are not specific to a country or a region, but you can configure them to fulfil county specific requirements. Here are some examples:
Multiple Accounting Representations
You can setup multiple ledgers and define accounting methods and rules to meet your different countries needs. You can, for example, define accounting methods to comply with US GaaP, IFRS or local GaaP. You learn how to address multiple accounting standards simultaneously with Oracle Cloud ERP in blog Address Multiple Accounting Standards Easily with Oracle Cloud ERP You can also define simple setup to generate different accounting entries at different point in time. For example:
In some countries, for various business scenarios, you account the tax to an interim account until the transaction is paid. Upon payment, the tax is transferred from interim to the deductible or liability account. You set up Tax Point Basis as Payment at tax rate code level to address this requirement.
You can define payment methods with payment accounting at the time
Configurable Accounting Reports to Address Regulatory Needs
Oracle Cloud Financials supports country specific general ledger and subledger legal and audit reports. The standard reports aim to address different statutory and critical business requirements from different countries and regions. You can configure the templates and data extracts of those reports using Business Intelligence Publisher (BIP), to meet statutory reporting in different countries across the world.
We divide the generic report templates and BIP data extracts into two main categories:
General Ledger reports that expose general ledger balances and journal information. These are the Trial Balance, Account Analysis, and Journals Reports.
Reports that support the audit trail between general ledger and subledgers to satisfy legal and business requirements, such as:
Third-Party Detail and Summary Balance Report
General Ledger and Subledger Accounting by Journal Lines Report
Daily Journals Report
Journal Ledger Report
For example, use the Journal Ledger Report to fulfil the Italian “Libro Giornale” or the Asset Register for the “Registro dei Beni Ammortizabili”.
Comprehensive and Configurable Transactions and Withholding Tax Applicability and Calculation
You need to apply different taxes to transactions depending on the geographies in which you do business and your industry. Configure Oracle Cloud Financials tax engine to address your global tax needs.
You handle complex tax calculation scenarios, such as:
Compounded taxes
Product-based tax rates
Quantity-based tax rates
Tax rates based on amount range (Rate Schedules)
Party exemptions
Taxable, tax amount thresholds by tax, jurisdiction
User-definable rules for taxability and recoverability
Self-assessed taxes
Tax Point Basis
and so forth
You determine applicability and calculate tax for different types of transactions:
Domestic and cross-border transactions
Outbound and inbound consignments
Inter-company transactions
Internal Material Transfer
Global Procurement
Domestic and international drop shipments
European Union
Imports, intra-community, domestic purchases
Exports, Intra-community, domestic sales
and so forth
You address specific requirements with standard setup, such as:
India GST & WHT
European Union VAT
Brazil Tax with Fiscal Document integration
Argentina WHT or “Perception”
Canada GST
and so forth
You can adapt the setup easily as your needs evolve. For example, you addressed Brexit with simple setup changes.
Configurable Tax Reporting
You prepare and reconcile your tax reporting using the generic reports and extracts. You can, for example, use the Financials Tax Register and configure the layout with BIP tools to display any additional available information. Configure the Tax Box Allocation reporting solution to group transactions and determine the “Boxes” amounts to be reported in the VAT return for any country.
Advanced Fixed Assets Depreciation
Assets provides multiple depreciation methods out of the box. You can also define complex Table-based or Formula-based depreciation methods to fulfil local requirements such as the “Amortissement Dégressif” in France.
Configurable Payment Formats
Issue payments using the available payment methods such as check, wire transfer, ACH, EFT, and PayPal. All major global formats are available out of the box, such as SWIFT MT100 and MT103, ISO2022 CGI and SEPA, EDIFACT, US NACHA and ANSI X12 280. Configure additional formats to satisfy specific country and bank requirements.
The Global Catalog provides more detail about the global capabilities available to satisfy country specific requirements. We update that document regularly with latest enhancements. It includes a matrix with examples (not deemed to be exhaustive) of countries where you can use the global capabilities to address local legal requirements or major business practices. The document provides a brief description of these capabilities.
Country Specific Features
In addition to global capabilities, you can also use country specific features that are designed to fulfil unique requirements of certain countries.
VAT and Tax Reports in Various Geographies
Registered under various tax regimes, you must prepare, declare, and reconcile VAT with tax authorities on a defined frequency. To support this process, you can use the reports available for multiple countries, such as Argentina, India, Israel, Italy and other.
Withholding Tax Reports
You can use the country specific withholding tax reports available for Argentina, Chile, Colombia, Israel, Italy, Poland, Spain, and Thailand to report periodically to tax authorities. You can also produce certificates for your vendors.
Fiscal Document Generation for Brazil
Before any movement of goods in Brazil, you must issue a fiscal document (Nota Fiscal) with values and tax amounts. The tax authority formally approves the fiscal documents. You can create and manage fiscal documents for receivables and shipment transactions with the feature “Fiscal Document Generation for Brazil”.
Audit FIles
Multiple countries require the companies to produce an electronic audit file. Companies provide the file to the tax authority either regularly or on demand. This varies per country.
In Norway and Portugal, run the respective SAF-T extract to produce the Standard Audit File.
In Poland, use the JPK features, Jednolity Plik Kontrolny.
In France, run the Audit Report for France to generate the “Fichier des Ecritures Comptables”.
In other countries, use the generic SAF-T extracts as a source of information to produce the audit files.
Document Numbering for Latin America
You must number the receivables transactions to address different rules in several countries in Latin America. In Argentina, use the predefined rules and transaction information to automatically assign numbers to sales transactions. This includes chronological sequencing and prefixes for the VAT status and point of sales. This applies as well to Electronic Credit Invoices numbered with specific sequences. Similar features are available for Colombia, Ecuador, and El Salvador.
Virtual Account Number in Japan
The Virtual Account Number is a common practice in Japan to identify a unique customer. The Zengin Format control file includes a Virtual Account Number to identify the customer or site for receipt creation and cash application.
The above are just a few examples of country specific features. Country specific features are available for more than 20 countries. Use the Global Catalog and the online documentation for detail about what is available per country.
A limited number of countries specific features is available for a limited set of countries. This is simply because in most countries local requirements are fulfilled with global capabilities. The topical essays provide details on how to implement and use the different country features. You access such topical essays via My Oracle Support (KB164294).
Extensions Assets and Integrations
You can also use extensions assets developed by Oracle Consulting and local Oracle teams. These additional reports and features are available to extend the core functionalities in some countries.
For example, you can use:
Electronic payment templates for several banks in Argentina
Collection documents remittance file transfer template for Brazil
Purchase book for Paraguay
Xml file generation for e-invoice in Peru.
You find more detail via the My Oracle Support Document Note
“Implementation Resources for Latin American Countries (KB29772)”.
In some countries you may require integration with government or 3rd party applications provided by local partners or service providers (for example e-invoice integration). The implementation teams can configure these connections. In some cases, Oracle partners provide them, and Oracle local teams also provide integrations for some countries.
Partners Solutions on Cloud Marketplace
Our partners offer applications to enhance country footprints and simplify local operations, for example:
Oracle Cloud Financials global engines and capabilities fulfil most of country legal requirements. You don’t necessarily need to look for a country specific feature to satisfy a local requirement. In most cases, the global capabilities are flexible enough to meet country requirements.
Be Familiar with Local Requirements
During implementation you must involve stakeholders knowledgeable about the local requirements. You may need legal and tax advisors. This is particularly important for countries with complex tax and withholding requirements such as Latin America. This is also true for accounting and reporting requirements.
Oracle Cloud ERP aims to make it easy for customers to comply with local regulation but does not enforce it. For example, you can configure accounting and tax rules to comply with regulation, but users can still enter improper transactions. To ensure compliance, managers and users must understand the procedures they need to follow inside and outside of Oracle Cloud ERP.
Implementers, users, all stakeholders need to define and implement appropriate procedures. These procedures span Oracle Cloud ERP, upstream applications, manual steps, physical documentation, physical locations, etc.
The regulation impact varies depending on the industry, company size, etc. For example, in some industries domestic supplier invoices have different rates of VAT at the line level. In other industries, only one rate of VAT applies. Companies in the Canary Islands have a different tax regime, etc.
Carefully Determine your Tax Currency
You can define a Tax currency different from the ledger currency. But for some strict tax processing requirements, you would need to ensure both are the same. This is particularly true for withholding tax in Latin America.
Plan and Design your Enterprise Structure
You must consider the country specific processing and reporting requirements when you design your enterprise structure. The structure should not limit the ability to do the setup required to fulfill different requirements, such as for example tax reporting or transaction numbering. Ensure that a primary ledger will not span countries, to mitigate regulatory conflicts. Configure document sequencing at legal entity level if you have multiple legal entities defined within a ledger and you need gapless document sequences.
Conclusion
Many country specific features are available, but global capabilities satisfy most of the local requirements. Those global capabilities are flexible enough to fulfil multiple disparate requirements and practices.
You must consider key aspects of your implementation covered in other posts before you look at the detailed features.
You can listen to different Oracle Cloud Customer Connect (CCC) webcasts to learn more on related topics. You need to log in to CCC and then use the direct links below.
Laurent has 24 years of experience with the Oracle ERP products, dating back to the Release 10.7 days of Ebusiness Suite. His experience at Oracle includes ERP implementation in multinationals across industries and product development focused on finance localizations for countries around the globe.
Laurent's background is in Accounting and Finance. Prior to Oracle Laurent spent 12 years in French and pan-European financial roles.
As a member of the ACE team, Laurent works with strategic customers on their transformation journey.
