Generally Accepted Accounting Principles:
the key facts for processing invoices in SAP and S/4HANA

All companies must retain their business documents for the tax office. Put more precisely: all business documents of relevance to tax should be stored systematically, in full, in a timely and organised manner as laid down in the ‘Generally Accepted Accounting Principles’ and they should be retained without changes. If IT-supported systems are used for this purpose, the requirements of the Generally Accepted Accounting Principles come into play. Since 2015, these principles on the orderly management and retention of books, records and documents in an electronic form and on data access have set the standards for the digital accounting and archiving of business documents.

The Generally Accepted Accounting Principles are administrative regulations based on legislation including the German Commercial Code (including §§ 238, 239, 257, 261 HGB), the German Value Added Tax Act (e.g. §§ 14, 14a UstG) and the German Fiscal Code (including §§ 140, 145, 146, 147 AO). In 2019, the Generally Accepted Accounting Principles were amended and adapted to the technical IT conditions. For example, the digitalisation of documents using smartphones and the use of cloud technology were taken into account. The requirements of the Generally Accepted Accounting Principles aim to ensure that auditors and tax advisers can quickly and correctly get an overview of a company’s accounting and financial situation even when using IT solutions.

The key requirements relate to ensuring the authenticity of data, the presence of monitoring and logging functions as well as the documentation of the corresponding business processes. Timely entry and posting, completeness and correctness, secure retention and immutability as well as traceability and organisation are the main principles which apply. When incoming invoices are processed electronically, the entire process from documents being received and identified to organised and safe storage must be documented and traceable.

We have summarised how tangro helps you to process incoming invoices in SAP and S/4HANA in compliance with the Generally Accepted Accounting Principles. This article provides a general overview of individual issues and is therefore no substitute for legal or tax advice.

Timely entry and posting

In accordance with the Generally Accepted Accounting Principles, incoming goods and cost accounts should be entered within 8 days. As soon as invoices you have received by post have been scanned in, tangro automatically enters the document image and electronic data from the scanned invoice, meaning that there is no delay. The person who scanned the document and when they did so is also recorded in the scan metadata.

Where invoices are received by fax or e-mail and scanning is not undertaken, tangro again immediately transfers the electronic image of the document and electronic data. Where invoices are received by EDI, tangro directly enters all invoice data in SAP. tangro therefore ensures timely entry.

The posting procedure can be initiated automatically once all invoice data is complete and correct. Should clarification be required, tangro supports prompt processing with electronic release workflows.

Completeness and correctness

In accordance with the Generally Accepted Accounting Principles, all business transactions should be recorded in full and without any gaps. For expenses and the invoices received for them, the following document information should be entered:

Unique document number
Date
Amount and volume specifications
Issuer of document (business partner)

Working with tangro, document content of relevance to accounting is automatically entered in SAP, checked to ensure it is complete and compared with the master and transaction data available. Only documents which correctly and completely contain all the required posting information can be posted. If data is missing or if content does not match the order information available, then the system automatically flags up these inconsistencies using a traffic light function and what is known as the stop indicator. Only when all document information is complete and correct can the document be posted in SAP.

Safe retention and immutability

Right from the start of processing with tangro, incoming invoices are stored to any external archive and storage system via the standard ArchiveLink interface. The originals and all relevant metadata are stored. When dealing with invoices from e-mails, this includes the original e-mail along with an image of the invoice (usually PDF). With paper-based invoices this is the scanned document and associated scan metadata and for invoices in a structured form (EDI format, ZUGFeRD, XRechnung etc.), this includes all invoice data.

Authorization and protection settings in the archive system regulate protection against deletion and changes. Transferring scanned and PDF images ensures that the documents can be read. For EDI invoices, tangro generates a PDF image, which can also be read with ease.

Traceability

In accordance with the Generally Accepted Accounting Principles: don't post without a document. It must be possible for every business transaction to be accounted for by means of a document. All relevant editing and releases must also be logged. tangro uses a document identification number so that each document can be clearly recalled and traced from receipt and entry in SAP to archiving. A duplicate check prevents duplicates from being produced. The document is also automatically linked to the relevant business transaction in SAP and can therefore be found again at any time using the SAP object. A field change history records any and all changes in field contents.

All additional information for a document, such as associated e-mails as well as attachments added in the workflow and the entire workflow log are also stored and can be found and called up at any time via the SAP object. It is therefore possible at all times to track who approved or rejected which version of every invoice and when they did so. Because the files can be loaded from tangro itself, there is also a data-recall facility for instances where the archive system itself cannot be accessed. The detailed documentation provided with the tangro software contains all the documents needed to produce company-specific documentation of the electronic incoming invoice processing with tangro software.

Organisation