Don't sweat the VAT increase: six things to do to prevent panic
Head FICO consultant Jill Van Der Merwe offers six steps to deal with the VAT rate change.
CFOs, tax experts and consultants countrywide have had round house meetings this past week on how they are going to handle the VAT rate change and what needs to be done. Here are the top six things you need to do to avoid panic in this regard.
- Ensure you have system advisors that you trust: The biggest impact that the VAT rate change has is on your ERP systems, so ensure you have consulted with your system administrators and that they have a plan.
- Make a list of areas affected: Make a list of areas within the business that are affected by the rate change, as this will help focus your attention with regards to who needs more education on the change and where more senior staff may need to be focused.
- Test changes: Any changes implemented or planned to be implemented in your ERP system with regards to the VAT rate change must be tested before 1 April 2018. Don’t relax on testing; the more you test prior to implementation, the fewer problems will be experienced after go live.
- Ensure staff understand: Ensure that the processing staff understand what needs to be changed, for example, which fields in what documents, and when. Simply explaining a VAT change may not be sufficient for data capturing staff.
- Be prepared for mishaps: Be prepared for mistakes during the transitional period. Due to the high volume of transactions processed by businesses, it’s more than likely someone somewhere will have an off day and enter the wrong rate.
- Monitor control accounts: The easiest and simplest way to monitor VAT processing is to monitor the control accounts, check processing that occurs versus invoice date and investigate exceptions.
With the correct amount of planning and staff education, crises around the impending VAT increase can easily be avoided.
About the author: Jill Van Der Merwe is Head FICO Consultant at Westrocon Seidor. She qualified as a CA(SA) in 2007 and since then diverged into operational roles that challenged her and provided many opportunities to strengthen and develop her problem solving abilities. In 2017, she moved into the IT field and became a SAP Finance consultant, helping customers to realise and develop solutions within their systems.