The way VAT is handled for online sales from businesses worldwide to consumers (that is, B2C) in the European Union (EU) changed on 1 July 2021.

The changes can be utilised by businesses outside of the EU, including the UK.

They’re commonly referred to as the EU VAT E-commerce Package and the two key components are One Stop Shop (OSS) and Import One Stop Shop (IOSS).

So, what does this mean for your business? We highlight everything you need to know in this in-depth article.

Here’s what we cover:

What are the new EU VAT e-commerce measures?

Frequently asked questions about the OSS/IOSS

Actions to take now and final thoughts

The goal of the EU VAT e-commerce legislation is to make life much easier for those ecommercebusinesses selling to consumers across the EU’s national borders, and thereby facilitating trade.

Any business that has been using the Mini One-Stop-Shop (MOSS) for certain kinds of digital services will already know of the benefits of this kind of simplification.

The new measures extend MOSS by opening it up to more services and also goods including those imported into the EU, thereby potentially simplifying VAT for many more kinds of sales.

It should be noted from the start that neither OSS nor IOSS are mandatory.

As an alternative, businesses can register for and then both account for and pay VAT in each of the EU countries in which they sell to consumers.

This is administratively onerous, of course, and is one of the reasons why OSS and IOSS were created.

It should also be noted that these new VAT measures are limited to online sales to consumers in the EU.

Business to business (B2B) sales from a business in the UK to a business in an EU country continue as they have following the end of the Brexit transition period on 1 January 2021, which is to say, B2B sales of services are generally subject to the reverse charge.

Exports of goods should be zero rated, and are then subject to tax in the destination country through the application of import VAT.

There are several parts to the new VAT rules likely to impact UK online sellers and they can be summarised as follows.

This is a new online portal for businesses by which non-domestic VAT can be reported and paid for supplies of services and online intra-community distance sales of goods to consumers across the EU.

An intra-community distance sale is one where a VATable supply of goods is made from one EU country to a consumer in a different EU country.

There are two versions of OSS: Union OSS, and non-Union OSS.

  • The Union OSS can be used by businesses that are established in the EU and can be used to report VAT on both intra-community distance sales and non-domestic sales of services to EU consumers. The Union OSS can also be used by businesses established outside the EU but only for the purpose of reporting intra-community distance sales of goods.
  • The non-Union OSS can be used by businesses that are established outside the EU and can be used to report VAT on sales of services to EU consumers only.

The term ‘not established’ means “a taxable person who has not established [their] business in the territory of the Community and who has no fixed establishment there”.

A fixed establishment is defined as “a sufficient degree of permanence and a suitable structure in terms of human and technical resources to receive and use or to make the respective supplies”.

Notably, a business is not classed as having a fixed establishment if it simply has a VAT number within an EU country.

Administratively, the OSS works in a very similar way to the MOSS scheme.

The VAT rate of the destination country is charged at the point of sale, then reported and paid quarterly via an online portal.

Domestic supplies continue to be reported via the domestic VAT Return.

It should be noted that the sales that can be reported through OSS are subject to destination VAT regardless of whether OSS is used.

OSS is intended to be a tax simplification.

It means businesses can report and pay VAT for all B2C sales that are subject to destination VAT to all EU countries in one fell swoop.

And that’s with a secure communications network in the background distributing the details and payments to the relevant EU countries according to the details provided on the return.

Notably, if you sign up to OSS, you must use it for all supplies made to EU consumers.

For example, a UK online seller couldn’t use it for supplies of services made in France, but report sales of services to Ireland by registering for VAT with Irish Revenue. The online sales to the Irish consumer must be reported via OSS too.

To use the non-Union OSS for services, non-EU businesses have to register with the tax authority within an EU country of their choice.

A €10,000 (£8,600) turnover threshold for ‘TBE services’ (telecommunications, broadcasting and electronic) is carried over from the older Mini One Stop Shop scheme but now also applies to intra-community distance sales but notably no other services.

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IOSS is again optional.

And if it’s not used then a UK seller would continue to zero rate the export for domestic VAT purposes, and the VAT is applied upon import.

However, IOSS offers a way of accounting for VAT to reduce confusion for customers, in that they can see a single accurate cost. It should also help expedite movement of goods across national borders.

Administratively, the scheme is similar to the OSS in that when the seller signs up to use IOSS they can use a single online portal to report and pay VAT – although this is done monthly rather than quarterly.

However, it only applies to online sales that are B2C imports of goods into the EU from outside the EU (from a so-called third country or third territory).

IOSS can be used only for consignments of €150 (£130) and below, or equivalent local currency in the consumer’s country.

If the seller chooses to register for and use IOSS, then VAT of the destination country is again charged and collected by the seller at point of sale.

Businesses may question why they should bother with IOSS. The key focus should be customer satisfaction.

As mentioned, the use of IOSS means goods travel through customs faster because the VAT has already been calculated and accounted for, rather than having to be applied upon import.

It also means the end customer has full visibility of cost at point of sale and won’t incur hidden costs further down the line when goods go through customs.

An important caveat is that IOSS covers consignments, rather than individual items.

So, if a consumer orders several items totalling more than €150 (£130) that are dispatched in the same order, IOSS does not apply. Furthermore, IOSS only covers items not subject to excise duties (e.g. alcohol or tobacco products).

IOSS can be used by both businesses established in EU and elsewhere, but additionally requires businesses not established in the EU to appoint an intermediary to act on their behalf in the country of registration.

If the country where you’re established is outside the EU but has an agreement around mutual assistance for the recovery of VAT with the EU then it’s not necessary to appoint an intermediary.

Currently, the UK does not have such a tax arrangement, so an intermediary will be required for the moment.

(It’s understood that talks are continuing around this point, so this situation may change in the future.)

EU place of supply/distance selling thresholds were removed on 1 July 2021.

Previously, this meant VAT only applied to intra-community distance sales if annual turnover was more than €35,000 (£31,000) for sales to most EU countries, or €100,000 (£86,000) per annum for Germany, the Netherlands and Luxembourg.

Removal of the threshold was a mandatory change that affects any business carrying out intra-community distance sales, regardless of whether they use OSS or otherwise.

The removal of the threshold went hand-in-hand with the introduction of OSS and is effectively a powerful incentive to make use of OSS.

It should also be noted that, for services, the place of supply rules remains unchanged.

That is, where you tax a service sale now will be where you tax it after 1 July 2021. But the expansion of MOSS to OSS will mean any B2C service sale subject to destination VAT can now be reported through OSS, not just TBE services.

Imports of goods less than €22 (£20) are no longer exempted from import VAT.

VAT must be charged on all goods – whether that be via import VAT at point of entry or at point of sale by the seller where the IOSS is used. However, remember, this is only available on B2C consignments worth €150 (£130) or less.

The measure has been implemented to level the playing field between domestic and non-domestic sellers who were seen to be at an unfair advantage when selling goods below €22 (£20).

However, while low-value goods imported into the EU now incur VAT, sellers can use the IOSS to help smooth the administration of the resulting VAT.

The new rules also mean so-called ‘electronic interface’ marketplaces and platforms, such as Amazon and eBay, are the deemed supplier for VAT purposes in certain cases when distance selling to EU consumers.

This affects sellers who use sites such as the aforementioned marketplaces and platforms. But it could also affect smaller businesses such as online antique dealers that retail items on behalf of clients.

Deemed supplier rules remove the need for sellers who use these marketplaces to account for VAT at the point of sale.

Effectively, it’s as if each consumer purchase process means they sell the goods to the online marketplace, who then sell the goods to the consumer and account for VAT while doing so.

A deemed supplier can use the OSS to report VAT in relation to intra-community supplies between EU countries, and also supplies within that same country (e.g. the goods are sent from somebody in Ireland to an Irish consumer) where the seller is not established in the EU.

In other words, use of the OSS means a deemed supplier doesn’t have to report the sale as a domestic supply for VAT purposes. They can also use IOSS to report VAT in relation to B2C imports into the EU with a consignment value below €150 (£130).

Although we’ve referred to the UK through this document, businesses in Northern Ireland may find themselves observing different rules.

This is because, under the Northern Ireland Protocol, they are effectively part of the EU VAT regime in respect of goods but not in respect of services.

This suggests that businesses in Northern Ireland who choose to may have to report all distance sales of goods through the Union OSS, but use the non-union OSS for services.

The UK government has yet to provide guidance on how UK businesses including those in Northern Ireland should approach the OSS and IOSS should they wish to use them. We’ll update this blog with more information as it’s made available.

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Here’s the answer to questions that are commonly asked about the new EU e-commerce rules.

From the perspective of the seller, both OSS and IOSS are open for applications from what the legislation calls ‘taxable persons’.

This means any individual or business that carries out economic activity in the EU. Notably, this can be for-profit or otherwise, so charities or non-profit organisations (NPOs) might also use OSS and IOSS.

A consumer is correspondingly described as a non-taxable person, which is to say, they aren’t subject to account for VAT according to the EU VAT Directive.

The answer will depend on how you do business, as follows.

If you carry out intra-community distance sales – that is, goods located in one EU country are being sold to a consumer located in a different EU country – you can register for the Union OSS to account for the VAT on the supply.

Alternatively, you can register for VAT in each country in which you sell to consumers.

If you import goods into the EU from outside the EU on a B2C basis, you can use IOSS (where the consignment value sent to the consumer is €150 (£130) or below).

Note that the consignment value is key here, rather than the value of the individual items that comprise it.

Alternatively, you can continue to operate as you have done previously and allow for import VAT to be applied at customs.

If you’re selling to EU consumers through an online marketplace such as Amazon or eBay then you may no longer need to account for the VAT.

Instead, the VAT will be charged and accounted for by the marketplace itself in its role as a deemed seller. You should speak to your online marketplace about how to proceed if this is the case.

However, these marketplace deemed-seller VAT rules apply only to:

  • B2C imports into the EU from a third country of a consignment value below €150 (£130) (that is, transactions that are eligible for the IOSS).
  • Intra-community distance sales where the underlying seller is not established in the EU.
  • B2C domestic sales within the EU where the underlying seller is not established in the EU.

As with selling goods, the answer depends if you have a fixed establishment in an EU country. If so, you should use the Union OSS. If not, use the non-Union OSS.

The non-Union OSS can only be used for online sales that are supplies of services to EU consumers.

It’s entirely possible that a business that’s not established in the EU might register for Union OSS, non-Union OSS, and IOSS.

  • Union OSS can be used if the UK business makes intra-community distance sales of goods to an EU consumer (that is, the goods are already in free circulation in an EU country).
  • Non-Union OSS can be used if the UK business makes sales of services to an EU consumer.
  • IOSS can be used if distance sales are made for goods imported into the EU with a consignment value of €150 (£130) or less.

If you have a fixed establishment in the EU, you should register for Union OSS in that country. If you have multiple establishments, then you can register in the country of your choice in which you have a fixed establishment.

If you have no fixed establishment but intend to use Union OSS for intra-community distance sales, you should register in the country where your goods are dispatched (that is, where they originate in their journey to the consumer).

If you dispatch goods from multiple EU countries then you can choose one of them.

If you’re importing goods into the EU and intend to use IOSS and have no fixed establishment in the EU, you’ll likely need to find an intermediary in any EU country to act on your behalf.

EU countries place various unique requirements on intermediaries, such as the requirements of monetary guarantees. Therefore, you need to look into this matter to find the best outcome for your situation.

If you’re selling services under non-Union OSS, you can choose any EU country in which to register.

Needless to say, language similarities have meant some UK businesses are registering with Ireland’s Revenue.

You don’t have to sign up for either OSS/IOSS to sell services or goods to EU consumers.

But if you do register, you must use the scheme(s) for all your sales to EU consumers.

In other words, you can’t use OSS for sales to consumers in Germany and France, but not for sales to consumers in Spain.

The relevant scheme must be used whenever non-domestic (unless being used by a ‘deemed supplier’) sales are made to consumers in any EU member state, or not used at all.

Union and non-Union OSS registration and IOSS registration take effect at the start of the next full quarter following application.

In other words, and as just one example, if you applied in early June 2021 then the registration would have taken effect as of 1 July 2021 (which was also the start date of OSS/IOSS).

If you register after 1 July 2021 then, again, the registration officially takes effect at the start of the following quarter – October 2021.

However, if you make a supply before this date after registration then you can inform the tax authority in the EU member state where you register by the tenth day of the month following that first supply.

This supply and subsequent supplies will then fall under the scheme.

IOSS returns are completed monthly, while OSS returns should be completed quarterly. VAT should be paid according to the same schedule.

No.

Unlike registering for VAT in a particular jurisdiction, the OSS and IOSS only allow for the payment of output VAT and not the reclaim of input VAT.

Therefore, if input VAT is incurred in a country where the seller does not have a full VAT registration, it will have to be refunded separately.

This will either be via the EU VAT reclaim process or via the 13th Directive process, depending on whether the seller is established in or outside the EU.

OSS and IOSS are additional administrative requirements outside of your ordinary VAT accounting, so you should continue to observe the VAT requirements of your own country.

They are effectively simplified EU-wide VAT returns for when you make B2C sales that require you to charge non-domestic EU VAT.

Effectively, nothing has changed compared to how you already handle VAT for MOSS, assuming your business continues to provide services to EU consumers.

However, the EU member state where you registered for non-Union MOSS may contact you asking for further details.

If you register for IOSS, you also need to provide this registration info to the EU member state where you have previously registered for MOSS.

Furthermore, you may now find you have additional sales of services that can be reported through non-union OSS.

You may also want to look at registering for Union OSS if you have a fixed establishment in the EU and make intra-community distance sales and/or IOSS if you export goods to EU consumers.

If you decide that OSS and/or IOSS are worthwhile for your business, there’s a handful of steps that you should take right now:

  1. Look into registering for OSS, non-Union OSS and IOSS, depending on your needs. As mentioned above, if you aren’t established in the EU then registering for IOSS involves finding an intermediary to act on your behalf. Each EU country has different rules regarding this, so research may be required.
  2. You may have to reconfigure your e-commerce software so variable VAT rates can be applied depending on which EU country you’re selling into. This is already possible with popular apps such as Shopify.
  3. Your accounting software will need to accommodate the same kind of variable VAT rates for each country.
  4. If you sell through an electronic interface marketplace such as Amazon or eBay, you should consult their documentation about how the deemed seller rules affect what you sell.

As is always the case with VAT, the new OSS/IOSS schemes are simple yet filled with myriad details that can catch out the unwary.

Ultimately, they’re to be welcomed by businesses because of the simplicity they bring to distance selling to EU consumers.

New Update for Sage X3 and HMRC MTD

Her Majesty’s Revenue and Customs (HMRC) announced in Jan 2021 significant structural changes for Making Tax Digital (MTD) submissions, effective 7th July 2021

Making Tax Digital (MTD) started on the 1st April 2019. It is a UK government initiative that is designed to be more efficient, more effective and easier for taxpayers (individuals and businesses) to get their tax right. The system aims to eradicate the errors made when inputting data manually.

At present (2019), the initiative only requires UK VAT registered businesses to submit their VAT returns digitally to HMRC. At some point during the next few years, income tax and corporation tax will also be required to be submitted digitally. The government will announce this at a later date.

All customers need to update their Sage X3 software to the latest level, as older formats will no longer be accepted by the HMRC.

Sage plans to release with Sage X3 2021 R2, Version 11 and PU9 a new Syracuse server that will need to be installed by all impacted customers.

For customers running earlier versions of Sage X3 that are no longer eligible for maintenance support we strongly recommend upgrading to the latest release as soon as possible. For help with any updates or upgrades, please contact our team on info@x3consulting.com.

In the next couple of weeks, Sage plan to send out further communications regarding this too, so please watch out for these. We will also be sharing the FAQ document detailing more surrounding this update.

Adobe will no longer run flash anymore at the end of 2020

Adobe Flash Player will be withdrawn by the end of 2020, which means that browsers won’t be able to run flash anymore. As flash technology is used for some features in Sage X3 in V11, this deprecation of Flash will have an impact on existing functions, and customers using X3.

Only three areas are impacted:-

  • Visual Process Editor (not the processes once published)
  • Graphical Requestor Report (V11 only)
  • Diary/Calendar in CRM

What does this mean for Sage X3 users

Going forward the X3 roadmap includes the replacement of these components before the deadline date by issuing a new set of components that will use alternate technology.

If you would like further information or assistance with this change please do not hesitate in getting in touch with our expert Sage consultants using the contact form on our website.

Whilst implementing SOAP webservices on the GAS object, transaction STDCO, in Sage X3 Version 12, Patch 18 there were a few challenges when migrating a web service from Sage X3 Version 11.

The issues stems from the failure to receive valid error messages. After a lot of testing and with the co-operation of Sage Support UK we found a workaround. The original webservices and code were developed and tested by a third party in V11.

When moving to Version 12 Patch 16 we encountered the first Issue: when saving a journal it succeeded, but when it failed it didn’t return the error message.

Please note that we still got status 0 or 1 according to failed or succeeded but when fails, the webservice does not return the reason why.

In order to proceed we were Instructed by Sage Support to upgrade to Patch 18. After upgrading, when trying to save with invalid data we get an error message saying the reason why.

Further investigations

After the upgrade to Patch 18 when we tried to save valid data we then got an error message saying

“You do not have the rights to create this record”

In Summary

The first issue with messages was related to the Syracuse component of Patch 16.

The second issue when saving valid data appears to be a patch problem related to business logic brought in from Patch 17 and still present in Patch 19.

Patch 19 Is the most recent patch for Version 12 at the moment (14/10/19).

Tests were conducted by testing the webservice Inside X3 but also by using SOAP UI. Being that the webservices were being consumed by a third party .net app, the tests with SOAP UI would give us the most accurate result. In all cases though the rights error remains and could not be sourced from the available code. Sage are aware and are working on a resolution.

For more information about the challenges encountered during migration and the resolution X3 Consulting have found for their clients, please get in touch with one of our expert consultants today.

SAGE X3 MANUFACTURING

SAGE X3 DISTRIBUTION

A better way to manage your entire business, at a lower cost and on a global scale.

Sage X3 is changing how businesses compete and grow, by delivering faster, simpler and flexible financial, supply chain and production management, at a fraction of the cost and complexity of typical ERP systems.

DRIVE GROWTH FOR YOUR ENTIRE DISTRIBUTION OR MANUFACTURING BUSINESS WITH AN INTEGRATED ERP

While additional modules can provide more extensive functionality as required, features like basic inventory management, manufacturing management, purchasing, global management and multi-legislation are already included in Sage X3, whereas typical cloud offerings often offer no basic functionality for these features unless businesses are prepared to pay extra for additional modules. Since many businesses are working with a restricted budget, this can pose issues with the functionality that they have access to and may cause them to develop work arounds with outside solutions that aren’t integrated.

Having all of the software you need integrated into one solution is important because it gives your business the whole picture without having to cross reference data from multiple sources. While small inaccuracies in data or somewhat inefficient processes might seem insignificant in other industries, in manufacturing and distribution they can cause massive disruptions. Having one unified solution improves productivity among employees because they can work more efficiently, and also decreases the chances of data errors such as duplicate or missing entries.

INTEGRATION WITH COMPLEMENTARY SOLUTIONS

Manufacturing and distribution industries are so specific that sometimes organisations require complementary solutions to expand their functionality, even if their ERP has a wide range of features. Sage has built all of their complementary solutions to be compatible with both on-premise and cloud deployments.

ACCESS TO REAL-TIME DATA AND INVENTORY ANYTIME, EVERYWHERE

Cloud opens the door to mobile access of your ERP, so you can access your ERP anywhere, anytime and from any device with an internet connection. Whether it’s a desktop computer at the office, a tablet in your warehouse or your mobile phone while you’re visiting a client, real-time data is always at your fingertips.

In manufacturing and distribution, access to accurate data is essential for daily functioning and Sage X3 allows for quicker and more efficient product management. Instead of being chained to your computer, you can take your ERP with you as you navigate your warehouse, tracing materials via lot, sub-lot and serial number, double checking inventory, or even managing your Bill of Material (MOM) with the products directly in front of you.

DRIVE GROWTH WITH MINIMAL OVERHEAD COSTS

One of the biggest hurdles manufacturers and distributors face is having system requirements that surpass their budget and resources available. Deploying Sage X3 in the cloud allows businesses to experience the enterprise management tool’s full functionality with minimal overhead costs. You don’t have the hardware costs involved with hosting your solution on site (i.e. servers) and you don’t require extensive IT staff to help manage your solution.

Sage X3 frees up more resources that organisations would have otherwise had to dedicate to managing their ERP which can lead to additional benefits, since 70% of SMEs report reinvesting money saved back into their business as a result of moving to the cloud.

If you would like to find out more about implementing Sage X3 in your distribution or manufacturing business please get in touch with one of our expert consultants today.

Sage Enterprise Management changes their name back to Sage X3

Last year we all held our breath a little at the name change announced from the well-loved “Sage X3” to the newly named “Sage Enterprise Management”. Not quite as catchy as the old name but we all embraced the name and took it on board, changing the various touch-points across our marketing channels, explaining the change to customers, clients and the team. X3 were sad and they waved ‘goodbye’ to what had become such a significant icon to many.

 

X3 Consulting still remained strong in our brand and vision. We were not tempted by a longer name. We stayed with what we knew our clients recognised, what they felt assured by, what they loved. Sage’s reason behind the name change was in order to distinguish where Sage’s solutions sit in the marketplace, hence including the word “Enterprise” for their enterprise level product. This was supposed to make it simpler and easier for businesses to understand which Sage solution will fit their company.

 

Fast-forward to 2019 and after many discussions and open forums with various partners and customers of Sage discussing the name change we are thrilled and delighted that they have come back to us! Sage, have now decided to change the name back to the well-known Sage X3. No more will you see the Sage Enterprise Management name, this is replaced by the historic name that everyone globally recognises “Sage X3”.

 

We like to think they simply changed it back because they like us so much. Moving forward Sage Enterprise Management will now be referred to as Sage X3 (again) on all marketing material and communications.

 

With over 10 years’ experience with the solution our team have a depth of knowledge and understanding that is unrivalled in the UK. Our team are specialists with Sage X3 products and have recently become an accredited business partner of Sage.

 

If you’d like to find out more about Sage X3 please contact our X3 experts.

 

 

 

X3 Consulting becomes accredited Sage Business Partner

 

X3 Consulting have been implementing global Sage ERP solutions for over 25 years. We’re known for our tenacious approach to problem solving; ability to rescue even the most off course ERP projects; for executing a professional, world-class, Sage implementation time and time again and helping deliver the most technical of Sage migration.

 

We are delighted to announce our accreditation as a Sage Business Partner. X3 Consulting not only share their name with Sage X3 but also their passion and commitment to delivering the latest in software technology to help drive your business and streamline your processes. We have a number of clients that have been with us since our establishment. They are now running the latest versions of our products and have benefited from our Sage software experience and pro-active approach. We maintain long-term relationships with our clients, to ensure their software solutions meet both short and long-term requirements.

 

We pride ourselves in giving 100% to every project. Our absolute focus and positive energy even in the most challenging environments, or to the most audacious plans, delivers much more than others can. No matter the size of the project we understand the need for you to have a service tailored to your needs. Whether it’s a complete end-to-end solution or a small ad hoc project we’ll deliver the same globally recognised standard of excellence.

X3 Consulting have had unrivalled success in implementing Sage Enterprise Management globally. We have recently completed work on a project spanning 96 countries with over 14 legislations. Not many Sage Enterprise Management partners can boast such a wealth of experience. We’re very pleased to make that experience available to you.

 

You get more than a Sage Business Partner:

When you work with X3 Consulting you get a complete full-service offering business analysis, Sage implementation, Sage Migration, ERP Rescue from our team of expert consultants.

 

Our strategy is to continue to build a strong business with a balance of technical expertise and fantastic client service skills, constantly update these skills and then to apply these skills in delivering excellent business solutions to all of our clients. Over the years we have built strong relationships with many complementary product vendors who provide vertical or niche functionality to extend and support the use of Sage Enterprise Management in your business. We can advise and guide you to products, which will enable you to streamline your processes and simplify your ERP platform.

 

For more information about how we can deliver your next ERP speak to one of our expert consultants today.

How to select the right ERP for your business

Enterprise Resource Planning software is the future of business technology – this amazing solution is the perfect tool that can help any organisation pump up its productivity and operational efficiency. Successful implementation of ERP system can completely transform any business organisation and provide efficiency in routine work tasks.

Today, the market space is flooded with numerous ERP software suites and choosing the right one for your business may often seem like a daunting task. One needs to consider the organisation’s particular requirements and workflow model before deciding on the most appropriate ERP software.

Conducting a careful survey and analysis is vital before investing in a top class ERP system – it will surely bring your business on the fast track to success!

 

Select the right ERP system through following steps:

1. Plan Precisely

Enterprise resource planning is a long-term process – you need to make sure that your organisation plans well and conducts comprehensive research before deciding on ERP software. Discuss and integrate with all departmental heads to know the exact requirements of the ERP system, and invest in the appropriate functionality for your company.

Look beyond today and prioritise the business requirements that will apply based on the business plan, growth and market/competitive forces. We often say the right system is the one that works for you in year 3+ as you’ll take time to implement the new system and to assimilate any new processes and procedures before you start to grow in to what’s available in the new application suite.

Make sure to choose ERP solution that is well suited to your organisation’s financial budget, and will help you achieve long-term goals with ease. A bit of good planning can definitely go a long way in helping you select the absolute best ERP system suite for your business!

 

2. The Power of Customisation

ERP systems are highly customisable and can be shaped to meet the specific requirements of any organisation. The ERP product partner, along with your IT team if they have the right skillsets, can assist in the complete personalisation of ERP software to make sure that it fits your organisational workflow, and provisions for scaling up or down the software can be made with ease.

Today’s modern ERP is much more customisable than ever meaning a high degree of flexibility without reverting to complex development/code.

The right customisation of ERP software solution will ensure a perfect technical fit with your current infrastructure – making sure that your company reaps the amazing benefits of a well-customised ERP software package. Delivering a measurable Return on Investment (ROI) should always be the bedrock to any business justification for the new ERP.

Before embarking on customisation consider the vanilla product and the degree by which it can easily adapt as standard to better fit your process; or the extent to which your process can adapt to fit the product.

Too often we see the overall delivery complicated by dogged insistence that the existing procedures cannot change, when in fact they ultimately represent the past and not the future when everything is taken in to account.

 

3. Budget is key

Finances and budget can be a real deal-breaker while investing in enterprise resource planning for your organisation! Make sure to understand the total cost of ownership before getting Enterprise Resource Planning software for your organisation.

Look for tangible and realistic benefits. Obvious commercial improvements – release of slow moving stock, reduction in stock out’s, increase in sales order throughput, reduction in shipping costs but don’t ignore the intangible such as improved customer service, greater market reach, quicker issues resolution, shared management data etc.

Don’t be afraid to account for the release of data input resources (i.e. people) through automation and their translation from a net cost to a net benefit by applying them into customer facing roles.

When looking at the budget bear in mind all costs and consider the estimated lifespan of the application to achieve the business goals over “n” years to come when recognising realisable value.

With Sage X3, we recommend a minimum 10 year amortisation of the project as once implemented the application will adapt and deliver over that timeframe with ease.

 

4. Find your perfect partner

Choosing ERP software is a long-term and on-going partnership for your business – it is crucial to get a reliable, credible, and an excellent partner who understands your organisational needs.

Slick and well presented demonstrations are a marker of partner product confidence but not necessarily proof that the partner has listened and understands what you’re trying to achieve. Test their knowledge, stretch their understanding, give them examples of scenarios that build on the details shared thus far.

Remember, ERP applications are “configure to order” so don’t expect to see everything in the demo. Focus on the partner’s issue management skills, project approach and methodology as well as their ability to visualise the project from your point of view.

Remember, this is your journey, not theirs!

We would always recommend a “meet the team” opportunity if possible so that you can assess whether there is full compatibility between businesses from the outset. Don’t expect to meet the whole team if you’re early on in the process. It’s reasonable to find the project sponsor and project manager will be identifiable at the earlier stages of the process.

You’ll be working closely together under pressure potentially for a considerable period of time and building relationships is central to great project delivery and customer/partner interaction.

 

5. Complete Accessibility and Mobility

Make sure to select accessible and user friendly ERP so that your entire employee population can easily adapt it. Sage’s ERP system can be used on mobiles, tablets, and laptops.

This makes sure that your staff can access critical data on the move, and enhances the level of operational flexibility. Mobile-friendly ERP system can also be accessed across geographical regions, thereby making sure that your team members can be in touch with work tasks even if they are not in office premises!

 

6. Compatibility

Enterprise resource planning is a holistic platform that automates business processes into a unified and structured stream. This means that for successful implementation it is necessary that all company software systems should be smoothly integrated, to maintain a central data repository.

That transition into a unified and integrated world is rarely instant however and you should consider phasing in change where external systems are involved, to be able to control and manage project delivery risk.

All too often customers seek a “Big Bang” when in fact good project governance recommends mitigating risk wherever possible which would propose reducing the project scope and introducing phases.

There is no shame in having a phased route to completion. There are however obvious repercussions in having to abandon a cutover because there are too many variables to control.

In summary

The decision of selecting ERP software for your organisation can indeed have a lifelong impact and change the course of your business success. So make your story a huge success by getting the best ERP system and the right partner, and help your organisation attain business glory through careful planning and consultation.

For more information about X3 Consulting, an accredited Sage business partner for your next ERP solution, speak to one of our expert consultants today.