— Reference
Introduction of VERA at Sparkasse KölnBonn
SAP add-on can also be used without a productive SAP system
Recognition of input tax for financial institutions without high personnel costs

Initial Situation
The IT systems of financial institutions offer hardly any possibility to record input tax, so that the allocation of the input tax deduction can often only take place manually. The accounting systems of savings banks in particular do not offer any IT support to solve this problem. This is because conventional financial accounting systems do not allow input tax to be treated with different deduction rates.
The success of VERA at a major savings bank as part of the introduction of SAP® R/3® prompted Sparkasse Köln-Bonn to solve the input tax problem in its company in a similar way, as in the past the input tax deduction could only be carried out in individual cases and with high personnel costs and thus there was clear potential for optimization. However, the prerequisites for the direct use of VERA were not met, as Sparkasse Köln-Bonn does not use SAP® for its accounting. When entering incoming invoices in the Sparkasse Köln-Bonn's IT system, it was not possible to enter the tax rates shown on the invoices, so that each invoice could only be entered gross.
Approach
A prerequisite for the use of VERA is the recording of incoming invoices with the gross amount and the tax rate shown as well as the mapping of material costs in a cost accounting system with cost types and cost centers or cost units.
In-house developed cost accounting
In order to meet these requirements, a field for entering the tax code had to be added to the savings bank's entry screen for posting incoming invoices. This could be implemented without any problems. Since the bank was already using its own cost accounting system, all the basic requirements for using VERA were met. In order to avoid having to develop VERA from scratch, it was decided to leave VERA in an SAP runtime environment. An empty SAP system (without ERP functionality) was set up at Sparkasse Köln-Bonn and integrated into the existing system landscape. VERA uses this system as a pure runtime environment without using the business components of SAP R/3.
Last but not least, this is an extremely cost-effective solution, as a small, commercially available server and a database for which no license fees are incurred can be used.
No incorrect or duplicate documents
The operation of VERA in its new environment was not changed, only the posting of the corrections determined by VERA could not be carried out in an integrated manner. The calculated posting records are delivered to the accounting system via an interface program and posted there.
VERA provides evaluations in a defined form for cost accounting so that input tax relief can also be passed on to the individual cost centers. This arouses the interest of the cost center managers, whose cooperation is essential for the calculation of individual input tax deduction rates for cost centers. The so-called margin key is used for cost centers for which this procedure cannot be carried out at all or only with a great deal of effort.
The project was an immediate success in the first year of using VERA. The input tax deduction for 2003 even exceeded the optimistic forecasts calculated in advance.
In addition, the use of this system inevitably results in two further advantages:
-
- Input tax deduction no longer requires the help of other departments; instead, VAT expertise can be pooled in the tax department. Manual processing has been reduced to a minimum, as time-consuming research into individual cases is no longer necessary. The account assignment of incoming invoices is carried out from the sheet. VAT training for posting employees is reduced to the simplest cases.
- All processed business transactions are documented in a database. The triggering parameters (original document, cost center, deduction rates, etc.) are recorded, as is the correction document used by the savings bank to collect input tax. By linking all data, correlations can be easily verified during a tax audit. The workload in the tax department is minimal. Once a month, the tax department starts VERA and the results are passed on to the tax authorities via the advance VAT return. Correction postings are automatically forwarded to the financial accounting department and posted automatically. There have been no major changes for the employees who post decentrally; only the tax key has to be entered as a new mandatory field during data entry.
Contact Person

Miklós Hegybiró
Managing Director
IKOR Products GmbH
products@ikor.one
+49 40 8199442-0

Björn Mayer
Projectowner & Senior Manager
IKOR Products GmbH
info-products@ikor.one
+49 40 8199442-0