Legal regulations specific to Poland during SAP rollouts

The Polish Version Requires Configuration

SAP is a multi-language system, and the Polish version has been available as a standard for several years. This means that every company in the world can use the Polish version of SAP. However, we are not only talking about the service language, but rather adapting processes to laws that are specific to Poland. The chosen SAP functionalities have to be configured (introduced) according to these laws.

This requires awareness of the fact that such a necessity exists. Moreover, people who know how to map the local specificity in the SAP system should be involved in the implementation. Consultants from the corporation’s headquarters do not usually possess such knowledge, as they develop corporate solutions and then introduce them in the various countries.

Of course, specific local laws exist in every country. Nonetheless, the Polish legal and tax system is one of the most complex. The differences concern not only taxation laws, but also several other, less obvious areas. This article provides a short overview of these areas and is aimed at corporations and their Polish branches that are preparing for an SAP rollout.

Specification Mainly in Finance

The most talked about specification concerns financial spheres (financial accounting – FI module of the SAP system; tangible assets – FI-AA module; and TR – Treasury module).

In the financial accounting sector, it is essential to adapt the following elements of the corporate CAP solution:

• accounts plan
• reports generated by the system and accounts based on the system
• VAT codes and VAT register codes
• the settings for currencies and the exchange rate of foreign currencies
• types of documents
• document paging
• division of costs and revenue into taxed and untaxed
• cash register

In Poland, it is necessary to keep an accounting record for the needs of the CIT tax. There is also the requirement to assign accounting operations as either tax-deductible income or non-tax-deductible income (KUP/NKUP).

The company accounts plan is usually imposed by the corporation – in the system, all departments use the same accounts plan, and the possibilities for adapting it to Polish requirements are limited.

From the point of view of CIT and VAT, handling economic records in a foreign currency is an issue that has always been characteristic of Poland. Unfortunately, over time, it seems that new legislation in this area is further complicating the situation and reinforcing the need for further system adaptations. The more difficult these adaptations are, the more the range of possible changes is limited by the settings of the rollout system.

The VAT declaration date is also essential in accounting documents. The requirements related to the date of the taxation obligation mean that extensions must be used in the Polish SAP system. In some processes, these extensions enter the VAT data in a defined way.

In Treasury, it is worth remembering the banking data configuration as well as exchange formats in banking systems (payments, statements). There are several different formats of payment files and bank statements that are used, which are not always fully supported by the SAP standard.

In the scope of operating tangible assets, the necessity for classifying them based on balance positions and GUS should be considered. Additionally, it is important to use percentage rates in amortization keys and to use separate amortization areas for the needs of balancing and taxation.

The Law and Customs

In Poland, the problems with adapting the SAP FI/CO system to local requirements are the result of not only the need to configure the system in compliance with the law, but also the experience and customs of chief accountants and their expectations toward the newly implemented system. Polish law (the Accounting Act) does not state if a given process has to be fully handled by an integrated IT system or not. For example, LT/OT documents and remaining sales invoices can be implemented in the SAP system, but they can also be generated with other programs, e.g. MS Word – ideally, the settings of new system should cover the actual needs of the end users.

Purchases

In the area of inventory management (purchases, warehouse), there are no specific legislative solutions that would force adaptation to SAP. However, when considering the issue of differences resulting from the transfer of business and system solutions prevailing in companies located abroad to Poland (rollout), the focus should be on organizational adaptations to defined processes and functions in the base solution (SPA template).

The basic element in the rollout of material management modules (SAP MM) is the use of solutions adopted in the target solution and the benefit accruing from them in the target organization. An example could be long-term deals, e.g. contracts. Thanks to these functionalities, we can (we do not have to) focus on the what is known as the “centralization of the purchasing process". This will allow for better organization and enable broad control over the types of acquired material and services. The centralization of long-term contracts/deals provides the possibility to use conditions that will be negotiated by the central purchasing department. There is then the possibility to negotiate discounts, which include the prices of materials, services or transport costs, for example.

A second essential aspect that should be analyzed during a rollout is organizing the storage and identifying the materials inventory, especially materials management. A company implementing the SAP system, based on the rules in the corporation, can receive access to (insight into) materials located abroad. Thanks to this, it can optimize procurement and storage processes for accessibility and delivery times. This optimization can be achieved by starting to move inventory in a single or multiple business units within the corporation.

Sales

In the area of sales and distribution (SD module), the specification mostly concerns the informative content of sales invoices, handling corrections of sales invoices and machines posting advance payments.

Concerning advance payments in Poland, a different form of accounting the advance payment and posting the settlement invoice is adopted, as well as the print-out of the final invoice.

Print-outs often lead to discrepancies – especially invoice print-outs. Until recently, the only accepted correction invoices were two-positional, where one line item of the corrected invoice was shown twice as “was” and one as “should be”. To fulfil this requirement, many changes had to be made in the system. This traditional solution is still widely used even though it is possible to issue single-position invoices today called credit or debit memos. In addition, the print-out of the advance settlement invoice is more complex: it has to include advance invoices (amounts, dates, etc.).

Furthermore, a standard invoice contains slightly more information than in most other countries, e.g. VAT amount for every line item of the invoice, VAT summary, net value before and after surcharge/discounts, etc.

In addition, correction-to-correction accounting is specific in Poland, as is the tax point date (the VAT date).

HR and Payroll

The local version of the HR and payroll solutions for Poland includes dedicated functions, operations and programs for handling many specific processes, including:

• Reporting forms for GUS (e.g. GUS Z-06, GUS Z-05, GUS Z-02, GUS Z-03, GUS Z-12)
• Staff forms for an employee (e.g. employment contract, employment record)
• Generating settlement documents for ZUS in the KEDU format (a file for collecting electronic insurance documents): ZUS RCA, ZUS RZA, ZUS RSA, ZUS DRA
• Generating declaration documents for ZUS in the KEDU format: ZUSZUA, ZUSZCNA, ZUSZIUA, ZUSZZA, ZUSZWUA (these documents are then imported into the program Płatnik)
• Automatic determination of the length of service for an employee (length of service for retirement, length of service for holiday determination, length of service in an undertaking, etc.)
• Mechanism for generating vacation limits for employees (including leisure vacation, leave on demand, child care benefits, family member benefits, additional vacation for the disabled with a defined level of disability), considering experience for the length of the vacation as well as the reduction of vacation through specified types of absence
• Process of document generation sent electronically to the tax office
• Compulsory reporting to PFRON (which is related to the employment rate of the disabled)
• Settlement of the payroll process in accordance with Polish legislation. In terms of “hard” HR (especially for wage settlement processes for Poland), a system boot-up project in a Polish department will be similar to a standard implementation (with elements of adaptation to corporate standards) rather than adapting the template to conform to Polish law)

The above-mentioned adaptations are an obligatory program for organizations looking to implement HR processes in the SAP system. Additionally, the Polish version of the system includes process that an organization may, but does not have to, include in its range of the SAP HR implementation, e.g. support for activities related to occupational health and safety regulations.

Tax Controls, Controllers and Auditors

Failure to consider specifications means that an SAP system will not comply with Polish requirements, which are defined in laws and enactments on accounting, taxation, division law, etc.

Non-compliance with these regulations can, in extreme circumstances, result in tax arrears and draw the attention of tax or treasury auditors. It can also dramatically hinder or make it impossible to draw up declarations for the tax office, ZUS, GUS or the Warsaw Stock Exchange. This is especially important in the areas of VAT, excise duty, CIT or PIT. Moreover, an organization can expose itself to a negative opinion from the statutory auditor or auditor if account books are processed using a “foreign” system.

The issue of when a corporate SAP solution will be transferred to the next country is mostly decided by the corporation’s headquarters. If such plans do exist, it is best to prepare for the undertaking so that the implementation work runs smoothly, the system and its future users are well prepared for work, and the target solutions comply with the law.

It is important to have good contact with the people responsible for SAP rollouts in the corporation. They are most commonly the IT department employees in the headquarters, a subsidiary company specializing in IT within the corporation, or an external consulting company that supports the headquarters in the scope of SAP.

Firstly, it is necessary to become familiar with the documentation of the corporate solution, especially with the project description, or a similar document, containing information about the range and phases of the SAP implementation, implementation concepts, and configurations of specific modules. It is also important to know the documentations of tests, systems, final user instructions, and documentation describing the method and introduction range of the opening balance in specific modules.

The lack of any of these documents should be seen as a potential threat for any of the implementation phases. Most of the documents should be available in Polish for proper use of the system as well as for control purposes.

It is worth noting whether the rollout model takes into account the proper training of system users. For many, a foreign language can by an impassable barrier, and the training will not produce the desired effect.

Knowing how the headquarters plans to perform the rollout can help ensure that all of the issues described are taken into consideration during the implementation work and that proper assistance is provided.

If Corporate SAP Has Already Been Introduced…

Experienced consultants who are familiar with the detailed solutions used in the Polish system can verify if SAP was introduced in compliance with Polish specifications.

However, non-SAP specialists can perform an introductory verification of the system by analyzing the available documentation that was created during the implementation (if such documentation was prepared). Important conclusions can also be made by analyzing account plans, available reports and print-outs.

A reliable approach is for an implementation consultant with experience in SAP rollout projects to audit the SAP system used. During the audit, the consultant identifies system areas and/or implementation documentation that do not comply with the law.

In this way, a list of issues to be rectified is created. Some companies decide to introduce specific changes through corporation consultants, but a better result is usually obtained through a consultant with implementation experience in Poland.

Good SAP rollout preparation is commonly associated with the necessity to make the corporate decision-makers aware of the need for support by a Polish implementation company. Depending on the roles and rights assigned, its involvement will decrease or completely eliminate the risk of lacking documentation or of the implementation being unsuccessful.

It is worth outlining that a badly implemented system will not only be a source of problems for employees of the Polish branch, but that it can also expose the corporation to additional system repair costs that are difficult to assess.

Cooperation: Marta Habza, Bartosz Janowski, Tomasz Krauze, Lubomir Przyborski, Maciej Szajna