Compliance with the Italian SDI E-Invoicing regulations

 

How PIKON helped Edgewell Personal Care to make their SAP ECC system compliant with the Italian SDI E-Invoicing regulations

Forced by the introduction of the mandatory Italian SDI e-invoicing regulations as of 1st January 2019, Edgewell Personal Care were looking for a thrustworty and knowledgeable partner to implement this functionality in their SAP ECC system and make it SDI-compliant. PIKON turned out to be the right fit providing broad technical and functional SAP expertise paired with extensive SDI project experiences.

Why Edgewell Personal Care needed to adapt their SAP ERP system to comply with the mandatory Italian SDI e-invoicing regulations

With offices in 55 countries, Edgewell are closely monitoring different legal requirements across the globe and staying up to date if there are any changes. One of the most significant regulations of 2019 to everyone doing business in Italy is the introduction of mandatory B2B e-invoicing.

With this regulation, the Italian government stated that all invoices issued in Italy as of 01/01/2019 need to be submitted electronically to the exchange system of the Italian tax administration (Agenzia delle Entrate) called “Sistema di Interscambio” (SDI). SDI introduces mandatory real-time electronic sales invoice issuance in a specific XML format (FatturaPA) and reporting while it effectively acts as an invoice approval portal, ensuring that taxable transactions are live verified by the Italian government.

As Edgewell have a legal entity in Milan, Italy, they have reached out to PIKON to support them in implementing this mandatory requirement in their SAP ECC system.

 

How PIKON helped Edgewell to become SDI-compliant

Before the project kicked off, PIKON proposed several possible scenarios to implement this mandatory Italian e-invoicing regulation in SAP ECC. The final decision was made taking into consideration several parameters, such as easiness to implement, destination code registration with the Italian tax authorities and Edgewell-specific process requirements. The SAP IDoc solution, interfaced with the middleware system of a third-party middleware vendor came out best in terms of straightforwardness and easiness and quickness to implement. Moreover, in this scenario, the destination code of the external middleware partner could be used.

With the SAP IDoc solution, an IDoc is automatically generated for each sales invoice that is created by Edgewell’s Italian sales organisation and this IDoc is then transmitted to an external middleware system. This middleware system serves as an integration platform to convert the IDoc into the by the Italian tax authorities required XML format (FatturaPA V1.2), to provide the required digital signature and time stamp and to process all communication between SAP ECC and the SDI system of the Italian government. Also, in compliance with the Italian SDI requirements, all FatturaPA V1.2 files are archived within this middleware system.

In order to make this SAP solution compliant with the SDI requirements, PIKON have created additional fields in company code data, providing information about Edgewell to SDI. Additionally, PIKON have developed a specific segment in the invoice IDoc where abovementioned necessary SDI-related information is added and then transmitted further to the SDI exchange system (such as the required destination code, a PEC mail address, etc.).

The project approach to make Edgewell’s SAP system SDI-compliant

PIKON kicked off the project with a workshop to analyse and review Edgewell’s requirements in detail. The results of this workshop were documented in a blueprint. Subsequently, after gathering the requirements, PIKON implemented the necessary SDI changes in SAP ECC and carried out the testing together with the Edgewell team.  In order to maximise the project’s success and to ensure smooth communication, bi-weekly stand-up calls were organised between Edgewell and PIKON to follow up on open issues and to discuss the project progress. Also, several on-site working sessions were held. After a successful Go-Live, an additional 2 months of Hypercare was requested to guarantee a smooth handover to the business departments and to solve potential issues.

During the project, there were some Edgewell-specific business cases that needed to be implemented, e.g. the invoice transmission for customers from the San Marino region or the transmission of some internal documents to the SDI system. According to the Italian SDI requirements, the invoices of San Marino customers do not have to be forwarded to SDI, therefore PIKON have developed an additional SAP functionality to prevent certain kind of invoices from being transmitted to the SDI exchange system. Additionally, the internal documents were also blocked from being sent to the SDI platform.

During the Hypercare stage of the project, it also became clear that there are some B2C invoices that were originally considered to be out of scope. As B2C customers do not have a VAT registration number, according to the Italian government, a fiscal code needs to be transmitted to SDI instead of the VAT registration code. For this purpose, PIKON have developed an extra field with the fiscal code to be included in the SAP IDoc that is sent to the SDI platform.

 

Project results

With a competence centre for compliance with different legal requirements in SAP and the implementation of different SDI implementation projects, PIKON have proven their expertise and experiences in the area of the Italian SDI e-invoicing regulations, from a technical SAP point of view but also in terms of all business requirements that are mandatory for SDI-compliance.

At the end of December 2018, PIKON tested all functionalities together with the Edgewell team and transported them for the Go-Live that was planned in January 2019. The first batch of invoices sent to SDI in January 2019 has been approved, in several days after the first invoice transmission to the SDI system, the flow for sending the invoices was fully automated.

On top of this, PIKON developed a reporting tool for Edgewell to help them manage all SDI-related data in SAP ECC with the upload of Microsoft Excel files with different invoice statuses (acceptance or rejection by the Italian tax authorities) from the middleware partner to SAP ECC. This tool allows Edgewell to monitor all invoice statuses in one system (SAP ECC) and have one general reporting tool.

On 3rd March 2019, 1877 invoices have been sent to the SDI system of the Italian tax authorities: 99% of them are approved and some are still awaiting approval by the Agenzia delle Entrate.