Effortlessly Stay Compliant with Cevinio's Automated AP Invoice Tax Validation Capabilities

What is the Cevinio Tax Validation Framework?

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The tax validation framework is a robust set of rules and procedures ensuring that taxes on invoices are accurate and comply with statutory requirements. This is crucial in the Accounts Payable (AP) process, where accuracy in handling vendor invoices— matching, verification, and payment—is vital. Our framework performs meticulous checks including: 

Tax Rates: The framework checks if the applied tax rate matches the relevant product or service and the vendor's location.

Tax Exemptions: Some products or services may be exempt from certain taxes. The framework verifies if the exemption is applied correctly.

Vendor Location: Tax rates and exemptions can vary depending on the vendor's location and the location where the product or service is delivered. The framework considers these factors.

Benefits of implementing Cevinio Tax Validation Framework 

Reduce errors

Minimizes human errors in tax calculations and classifications preventing overpaying or underpaying taxes, which can lead to penalties and fines

Save time

Reduces the time needed to process invoices by automating complex validations, thereby freeing up your AP staff to invest in other value-added activities

Detailed Reporting

Access comprehensive audit trails for better insight into tax obligations and streamlined audit preparation

Enhance Efficiency

Ensure timely and accurate invoice payments

Ensure Global Compliance

Stay compliant across different tax jurisdictions with ease

How does the Cevinio AP Tax Validation Framework work?

Cevinio's AP Tax Validation Framework is part of our accounts payable processing flow, enhancing compliance and efficiency with sophisticated automation. Here's a step-by-step breakdown of how the framework operates:

Automatic Invoice Ingestion

The process begins with the automatic ingestion of invoices by the 'processing robot,' our advanced AP agent, which not only automatically ingests invoices received through various channels and formats but also processes in the invoices. This automation ensures that all incoming invoices are captured accurately and promptly, setting the stage for effective processing.

Supplier Verification

The processing robot performs an initial check to identify the supplier’s location and key attributes. These attributes might include whether the supplier is an intercompany entity, a subcontractor, a government body, or an insurance provider for example. This step is critical for applying the correct tax rules and regulations.

PO Characteristic Check

The robot then examines both historical and current purchase order (PO) information to:

  • Determine the type of PO issued (e.g., limited PO, service-related, or product-focused).
  • Review how PO line descriptions have been classified in the past.
  • Ascertain the origin and destination countries for product delivery.

This information helps ensure that the invoices meet compliance standards.

Invoice Classification Framework

Utilizing a sophisticated set of keywords, the processing robot classifies each invoice as pertaining to goods or services. This classification is pivotal for applying the correct tax codes and rates.

At Cevinio, we recognize that each company, regardless of industry, has unique needs and processes for invoice handling that may influence the classification phase. To accommodate these specific requirements, our processing robot not only utilizes a standard set of keywords but also supports customer validations configured to your business needs.

Tax Directive Framework

Based on the initial classification, the robot applies a repository of keywords to validate the applicable tax percentages. This involves verifying whether the tax percentage, in conjunction with the supplier, PO, and invoice classification for goods or services. Since these requirements vary by country, global companies benefit immensely, assured that their invoices comply with local tax regulations.

In this action, we also implement customer-specific validations, ensuring our system adjusts to meet your unique business requirements and delivers peace of mind with every transaction.

Final Validation and Reporting

After conducting these checks, the processing robot finalizes the tax validation process. It compiles a detailed report showing the results of the validation checks, highlighting both the successes and any discrepancies. This report allows the AP team to quickly address any issues, ensuring that every invoice is processed correctly and efficiently. Before automation, all actions were manual and the responsibility of the AP team. Now, they can focus on other value-added tasks and exceptions. As you process invoices with the Cevinio processing robot, AP managers gain control over the actions performed by it and the agents, ensuring no details of the processing journey are missed.

Why choose Cevinio?

Cevinio is more than just AP automation software—it's your proven partner in achieving accounts payable global tax compliance. Trusted by leading global companies, our platform boosts efficiency and ensures your financial operations are compliant. 

🚀 Ready to transform your accounts payable? 

Take the first step towards automated, compliant, and efficient accounts payable operations. Contact us today for a demo, and see how our AP automation solution can positively transform, your tax validation process and beyond.