VAT in the Digital Age: The Architectural Redesign of European Trade

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Most organizations still treat VAT like a monthly paperwork ritual, but you're not running paper anymore.

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You're running API as marketplaces, automated billing and instant settlement,

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and you're trying to bolt a paper-era tax control system onto that.

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VITA is the EU admitting the obvious VAT has to operate at transaction speed.

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In this video, you'll learn what actually changed, why we'll buy an e-invossing connector later fails,

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and how this lands in Dynamics 365 Finance and Power Platform Architecture.

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There's one program, Killer Mistake coming up.

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Don't make it. The foundational misunderstanding.

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VITA is not compliance. It's a control plane shift.

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The foundational misunderstanding is that VITA is a compliance project.

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It is not. Compliance is what people say when they want the work to stay in tax and finance

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with IT supporting later. VITA doesn't support that fantasy because it moves VAT

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from periodic reporting to continuous transaction controls.

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That distinction matters because your architecture either produces

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compliant transactions by design or it produces exceptions at scale.

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Historically, VAT ran on delay. You issued invoices when you got around to it.

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You reported in returns on a monthly or quarterly rhythm and you fixed the mess at month end.

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That delay wasn't a convenience.

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There was a fraud surface area and an error buffer.

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The longer the gap between the transaction and the authority seeing it,

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the more room there is for missing invoices, mismatched listings,

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and creative interpretations that only get challenged months later.

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VITA compresses that gap.

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For intra-EU B2B supplies, the direction in the research is simple, structured E invoices,

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issued within 10 days with digital reporting that happens near real time.

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And the purchaser side also reports with a few extra days.

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That's not an upgrade to the VAT return.

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That's a new operating model where every invoice becomes an event that must be correct when it happens.

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Now here's where most programs fail.

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They treat E invoicing like a document format change.

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They think this is, we used to email PDFs now we send XML.

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So they go shopping for a connector or a middleware plug-in and they push the problem to the edge of the ERP.

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That is how you build a brittle point solution that collapses the first time

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a validation rule rejects an invoice.

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Because E invoicing isn't the hard part.

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The hard part is that invoicing sits at the junction of ERP posting,

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tax determination, customer master data, product classification, credit note discipline,

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payment terms, and audit retention.

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VDA doesn't just inspect the invoice.

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It inspects the system behavior that produced it.

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In architectural terms, VDA behaves like a control plane, a layer that enforces constraints on the data plane.

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Your transaction systems, Dynamics 365 Finance, your e-commerce stack, your procurement platform

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are the data plane.

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They create economic events, supply, invoice, payment, correction.

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VIDA introduces a control plane that requires those events to be expressed in a standardized semantic model,

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transmitted in constrained time windows,

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and reconcilable across parties.

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The control plane doesn't care about your org chart.

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It cares about determinism, most organizations run VAT as a probabilistic model.

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It's usually right and will fix the outliers later.

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That works when the authority only sees aggregated totals weeks or months after the fact.

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VIDA pushes you toward a deterministic model.

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Each transaction must be right enough to survive validation, matching, and audit

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without manual cleanup as a dependency.

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And the thing most people miss is what creates probabilistic VAT at scale exceptions.

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Every exception you tolerate becomes an entropy generator.

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We'll allow missing VAT IDs and fix later.

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We'll allow free-text tax codes.

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We'll let credit notes reference whatever.

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Each one feels operationally flexible.

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Collectively, they turn your compliance posture into conditional chaos.

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Under VIDA's timelines that chaos doesn't just exist, it becomes visible immediately.

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So what does control plane shift mean for Microsoft ecosystem architecture?

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It means Dynamics 365 Finance is no longer just your accounting truth.

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It becomes the source of regulated events.

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The posting and tax determination outcome must be final grade because there's no comfortable buffer

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between posting and reporting.

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You can't post sloppy and export clean later.

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The system did what you configured it to do.

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And the authority will see it.

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It means power platform stops being nice to have automation.

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Power automate becomes the rooting fabric for exceptions and corrections

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because humans will still resolve issues, but they must resolve them inside a governed life cycle.

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Triage, remediate, resubmit, and preserve evidence.

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And Power BI becomes the visibility layer that tells you daily whether you are drifting into

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non-compliance through exception accumulation.

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And it means integration design is no longer about getting data from A to B.

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It becomes about chain of custody, generating an immutable payload,

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capturing acknowledgments, and making the reconciliation provable later.

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The open loop mistake, the one that kills programs, is treating VIDA as a bolt-on

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and discovering late that your ERP data model can't actually produce what the E-invoice standard requires.

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Or worse, it can, but only if someone fixes it in Excel before submission.

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That is not a process that is a future audit finding.

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This is the uncomfortable truth.

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VIDA rewards architecture and punishes patchwork.

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Once you accept it's a control plane shift, the rest become straightforward,

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not easy, straightforward.

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And that's why the next thing to understand is how the three pillars behave like one system,

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not three work streams.

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VIDA is three pillars as one system, not three work streams.

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Most organizations read VIDA as three separate work streams.

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Digital reporting and E-invoicing, platform rules, and single VAT registration.

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That framing is comforting.

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It's also wrong.

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Architecturally, those pillars behave like one system, because they all touch the same invariant.

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You must be able to calculate VAT correctly, express the transaction in a standardized way,

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transmit it inside the deadline, and prove later that what you reported matches what you settled,

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different obligations, same pipeline.

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Pillar 1 is the obvious one, structured, E-invoicing, and near real-time digital reporting for intra-EU B2B.

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With the supplier issuing within 10 days and the buyer reporting shortly after.

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That's the part everyone notices because it's loud.

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It forces invoice semantics, formatting discipline, timestamps, and acknowledgments.

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But Pillar 1 alone doesn't close the loop, because reporting isn't the same thing as settling.

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And settling isn't the same thing as filing.

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And filing isn't the same thing as proving.

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Under VITA, those gaps stop being operational trivia and start being inspectable behavior.

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Pillar 3, single VAT registration through OSS expansion and reverse charge expansion,

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looks like simplification and operationally it is.

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Fewer local registrations, fewer local returns, fewer local portals,

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but it also centralizes your truth.

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If you report output VAT through OSS, you still need transaction evidence that ties to what you declared.

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If reverse charge applies, the invoice treatment depends on customer status and establishment logic,

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and that must be correct at transaction time. So Pillar 3 changes where you file, it doesn't remove

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the requirement to be right. And Pillar 2, platform deems supplier for short term accommodation

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and passenger transport. Looks like a niche pillar until you run any platform like model internally.

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Marketplaces, intermediate services, we collect and remit on behalf of arrangements.

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VITA drags those commercial models into the VAT control surface by moving liability to the platform

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under conditions described in the research.

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If the underlying supplier isn't obliged to pay VAT or doesn't provide a VAT number,

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the platform becomes responsible for charging and remitting. That means the platform must also capture

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evidence and make decisions and keep those decisions linkable to the transaction record.

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Now connect the dots. A deemed supply still produces invoices. It still flows into digital reporting

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where applicable it still has to reconcile to payouts and refunds. So Pillar 2 feeds Pillar 1

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and Pillar 3 whether you like it or not. This is the system behavior VITA is pushing,

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calculate report, settle, file, proof. Every one of those verbs maps to a technical artifact

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in your stack. Calculate tax determination logic and master data quality inside dynamics,

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365 finance and whatever front and order systems you run.

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Report the regulated payload, EN-WENXD9331 semantics for the invoice data model

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and the digital reporting submission with identifiers and timestamps, settle, payment reality,

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PSP payouts, net fees, chargebacks, refunds. Because VAT exists in gross amounts but your bank sees net

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settlement, file. The VAT return world doesn't disappear overnight. OSS returns and remaining local

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filing still exist just with more upstream constraint. Prove evidence packs, payloads,

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acknowledgments, VAT ID checks, location proofs, FX source, correction trails, not as a documentation

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project, as a system output. Most failures happen because teams build only the report component.

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They ship an e-invoicing integration and call it done. But the first audit question under this model

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is predictable. Show that the invoice you reported matches the posted transaction and show that

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the VAT you reported matches what you collected and remitted. If you can't answer that with a query

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and an evidence bundle, you don't have compliance. You have hope. This is why the Microsoft positioning

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matters and it's not marketing. Dynamics 365 finance is the system of record, posting, tax outcome,

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invoice, life cycle, corrections, power platform is the system of orchestration and insight.

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Exception routing and resubmission flows in power automate and daily compliance health in power

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BI. Azure is the system of scale and resilience, message durability, storage immutability,

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integration patterns that survive outages. Capped implicit because the point isn't cloud purity,

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the point is chain of custody. Once you see the pillars as one system, the timeline stops

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feeling like we have until 203 because you don't implement this in 2029. You implement the pipeline,

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then you expand coverage and that brings us to the timeline reality. Faced law, continuous engineering.

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The timeline reality, faced law, continuous engineering. The next comfortable assumption is that

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VITA is a 203 problem. It is not the law lands in phases but your engineering doesn't because the

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hard part isn't flipping a switch in July 203. The hard part is building a transaction grade pipeline

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that survives five years of drift, partial adoption and country by country reality. Here's what

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the research actually gives you on timing in plain terms. First, the political process is effectively

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done. One of the research sources frames it as political agreement in autumn 2024. With adoption

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by the EU Council in March 2025 and in the webinar transcript, the speakers described the package

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as "entered into force" as of April 2025, with member states already able to introduce certain

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e-invoicing rules without the prior approval step. So even if your organization wants to treat this

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as a future project, member states are free to treat it as a present lever. Second, the package is

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phased. The webinar frames a multi-year path with a completion horizon out to 2035 and it calls out

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July 2028 as the first tranche for the single VAT registration pillar. Then July 203 shows up as the

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point where intra-EUE invoicing and digital reporting become mandatory. That's the headline date

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everyone repeats because it's clean. But you don't build clean systems against clean dates. You build

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against messy change windows and there's one detail from the webinar that matters architecturally in

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new systems versus old systems. The webinar describes new systems as domestic e-invoicing and reporting

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regimes introduced after 2024 that didn't rely on the older EU derogation pattern. Those new systems

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must harmonize by 203. The old systems, the legacy clearance style regimes that already had

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derogations have a longer harmonization window out to 2035. That distinction matters because it guarantees

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heterogeneity during your build window. From an architecture perspective that means you won't get one

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uniform reporting rail in 2027 or 2028 or even 203. You'll get a mix. Interoperability patterns in some

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places, clearance patterns in others, plus country-specific implementation choices that still meet the

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EU's direction but not your desire for simplicity. So what moves first inside enterprises, not the

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connectors? The data model. If your invoice data in Dynamics 365 finance can't deterministically produce

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the fields and codes that your e-invoicing and reporting rail expects every downstream component

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becomes an expensive bandage. And because Vida compresses timelines issue within 10 days report

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near real time, you don't have a month and remediation window to hide behind. The second thing that

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moves first is your integration pattern. Most teams start by asking which provider do we pick? That's

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procurement, not architecture. The architectural question is how do you emit an immutable transaction

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payload with stable identifiers and capture acknowledgments so you can prove what happened later?

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That means event thinking, invoice posted, payload generated submission attempted response

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received, correction linked. If you can't represent that lifecycle, you can't govern it.

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And if you can't govern it, you can't scale it. The third thing that moves first is the exception

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lifecycle. Because the reality of faced adoption is that you'll spend years living in partial

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coverage. Some flows on structured invoices, some on PDFs, some on domestic mandates, some on

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intra-e-u mandates, some on reverse charge expansion, some on OSS strategy shifts. In that world,

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exceptions aren't occasional. They're structural. If you don't productize exception handling early,

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triage remediation, resubmission, evidence capture, you'll drown in manual effort exactly when

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the deadlines get shorter. And here's the part people don't like hearing. 203 is far away, is fantasy

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because your organization's lead time isn't the law's lead time. You need budgets, you need master

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data cleanup, you need testing cycles with external rails, you need operational ownership, you need

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controls that work when people are tired and the provider is down and the quarter end is on fire.

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The system doesn't care that the regulation is faced. The system only cares whether you engineered

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a pipeline that can absorb change without generating permanent exception debt. So treat the timeline

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as an engineering runway, not a compliance calendar. Phase one is building the rails.

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Canonical invoice data, regulated payload generation, submission and acknowledgement capture,

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and dashboards that make drift visible. Phase two is scaling coverage, more countries, more

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transaction types, more workflows. Phase three is resilience, replay, idempotency, lawful degraded

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modes and evidence packs that survive audits. That's the only way to meet a phased law with

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continuous engineering. And once you accept that, pillar one stops being e-invoicing. It becomes a

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set of system requirements you can actually build against a pillar one in one sentence. Every invoice

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becomes a regulated data packer. Pillar one sounds like mandatory e-invoicing and digital reporting.

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That's the headline. In system terms, it's simpler and harsher. Every invoice becomes a regulated

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data packet with a deadline, a schema and a delivery receipt. In the current state, an invoice is a

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document. A PDF and email attachment, sometimes paper, sometimes downloaded from the portal.

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The research calls this out plainly. The form has been fairly free. And the reporting model matched

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that freedom. VIT returns, EU sales listings, periodic declarations and cleanup time to reconcil

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what actually happened. VITA flips the direction of travel. For intra-EU/B2B supplies,

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the research describes the future state as a structured machine readable e-invoice issued within

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10 days of the chargeable event, with invoice data transmitted digitally to the tax authority near real

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time. The purchaser reports two with additional days, and the reporting is per invoice/transaction.

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Summary invoices survive, but only inside a narrow monthly window with the same issue and deadline

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discipline. That shift matters because invoice stops being the final artifact and starts being

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the carrier for regulated data. It's not a file you send. It's a payload that has to pass validation,

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preserve identifiers and remain linkable to downstream reporting, corrections and audit evidence.

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Now here's where most people mess up. They assume the only problem is outbound formatting.

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So they build a PDF to XML converter mentality, or they pick an integration partner and assume

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the provider will handle compliance. Providers can handle transport, sometimes validation rules,

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sometimes country adapters. They can't manufacture truth. If the posted transaction in Dynamics

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365 finance doesn't contain the right semantic content, correct VAT IDs, correct addresses,

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correct classification, correct totals, correct sequencing, your regulated packet is wrong before

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it ever leaves your tenant. And once you're operating under a 10-day clock, wrong packets don't wait

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politely until month end. They come back as rejections and exceptions while the business keeps selling.

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This is what pillar one really imposes on architecture. First, time discipline becomes a system property.

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You can't rely on someone runs invoicing on Fridays or we batch post at month end. If the invoice

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must be issued within a defined window, your posting to invoice to submission flow has to run as

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a pipeline, not a periodic task. If your process design requires humans to do manual pre-checks to

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avoid rejection, you've already failed at scale. Humans don't scale. Cues do. Second, structure becomes

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mandatory. A structured e-invoice isn't a nicer PDF. It's a set of fields, codes and totals that

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machines can pass and compare. That means your invoice is now a compiled object. Think of EN6931

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as the byte code spec. If your data doesn't compile, it doesn't execute. The authority doesn't

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read your intent. It validates your output. Third, acknowledgement becomes part of accounting reality.

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In a clearance-style world, an invoice might not be real until it's accepted. In an interoperability

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world, you still end up with delivery and status signals. Either way, you now have an external

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state machine attached to your invoice life cycle. Submitted, accepted, rejected, corrected,

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resubmitted. If your ERP treats invoicing as a one-way print action, you'll bolt on status tracking

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later and wonder why nobody trusts the numbers. So what should a Microsoft centric organization

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internalize? Dynamics 365. Finance has to produce a canonical invoice record that's stable enough

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to map to the regulated packet without interpretation layers. The tax determination outcome

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has to be final grade at posting time because you won't have enough time or enough people

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to massage invoices into shape before submission. Power platform is where you keep your sanity.

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Power automate is how you root rejections to owners, enforce remediation steps,

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and preserve the correction trail without inventing side spreadsheets. It becomes the control fabric

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that keeps exception handling deterministic, who touched what, when, why, and what got resubmitted,

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and Power BI is how you stop lying to yourself. Not with one big compliance dashboard that nobody

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opens. With a few ugly metrics that force reality interview, submission success rate, rejection

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categories, exception aging, and time to issue compliance. If those metrics drift, your system is decaying.

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Quietly, daily. The thing to remember is that Pillar 1 doesn't just digitize invoices,

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it makes invoice production observable, that's the real enforcement mechanism. When both supplier and

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purchaser report transaction level data inside tight windows, mismatches, stock being abstract,

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they become detectable behavior, and once behavior is detectable, it becomes governable. By the authorities

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and by your own control functions, whether you planned for that or not. So yes, every invoice becomes

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a regulated data packet, and the next problem isn't transport, it's the semantic contract you don't

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get to renegotiate, and 16931 as the semantic contract, and 16931 is where Vida stops being a policy

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conversation and becomes an engineering constraint, because EN6931 isn't a format, it's a semantic model.

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What an invoice means, expressed in structured data, in a way that other systems can validate and

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compare. The research is explicit on this point, syntax can vary, UBL or UNC fact, CII show up a lot,

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but the semantics must hold, that distinction matters because you can swap transport rails and

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message wrappers all day and still fail compliance, if your invoice meaning doesn't compile.

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Most enterprises here, EN6931, and assume it's just another mapping exercise, it isn't, it's a

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contract you don't get to renegotiate, because the whole purpose is interoperability across member

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states and across trading partners. Under a periodic VAT return model, your internal invoice could

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be messy and you could still file totals that mostly reconciled. Under a transaction reporting model,

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the invoice itself becomes the tax fact, and EN6931 defines the tax fact shape. Here's the uncomfortable

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truth, your ERP invoice is not the invoice anymore, your ERP invoice is a source record, the EN

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voice is the regulated representation, if you treat those as the same object you'll build fragile

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transformations that drift over time, if you treat them as separate you can enforce a canonical

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mapping layer. This field in Dynamics 365 finance maps to that semantic element under these

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conditions with these controlled code lists. Now here's where most people mess up, they focus on can

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we generate UBL and ignore validation behavior, because the rail doesn't care if your XML is pretty,

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it cares if the data is complete, consistent, correctly coded and mathematically coherent.

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The research source on EN6931 calls out a reality that catches teams of God. There are hundreds

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of data fields and many are conditional, that means optional doesn't mean ignore. Optional often means

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required when a business condition applies, which is how systems generate silent failure the field

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exists, but the rule that should populate it doesn't. So when does this become a Microsoft

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architecture problem? Immediately, Dynamics 365 finance can post invoices with incomplete customer

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records loosely governed addresses or inconsistent tax code usage, because historically humans could

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fix it later. Under EN6931, semantics those shortcuts become rejection categories. And once

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rejections exist you've created a parallel process, fix, resubmit and preserve evidence, that's where

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entropy accelerates. The thing most people miss is that semantics beat transport, you can buy a

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pebble access point, you can buy a clearance gateway, you can buy a compliance provider, none of that

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fixes the underlying semantic debt. If your VAT IDs aren't consistently captured, if your invoice

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numbering discipline drifts, if your credit notes don't link cleanly to originals, you'll spend

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your budget on integration and still fail on meaning. And yes, EN6931 forces discipline in areas

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enterprises have historically treated as negotiable. Conditional fields that depend on scenario,

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code lists that require controlled values instead of free text, VAT identifiers that must exist and

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be corrected at the moment of issue. Sequential numbering and traceability that stop being an

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accounting preference and become a regulated expectation. So what do you do with that in a D365

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Finance Plus Power Platform world? You treat the mapping to EN6931 as a first class artifact,

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not a spreadsheet that lives with the consultant, a governed model, versioned, tested and tied to

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release management. Because your business will change, your products change, your pricing models change,

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your master data changes, and every change threatens the semantic contract unless you enforce it by

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design. Power Platform becomes the enforcement surface. Power Automate can root missing data

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exceptions before invoice issuance, not after rejection. It can enforce approvals when conditional

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fields require human confirmation. It can attach evidence, VAT ID checks, decision logs, correction

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reasons, directly to the transaction context instead of scattering it across email threads.

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And Power BI becomes your semantic drift detector. Not how many invoices did we send, but

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which semantic requirements are failing, which customers generate the most rejections, and how long

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do we sit on exceptions before the deadline window closes? One more detail from the research is worth

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stating plainly. Deviation is only tolerated if interoperability remains guaranteed. But that means

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you can keep internal extensions, but you must still be able to produce the standardized

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representation that other systems can accept in architectural terms extensions are allowed, but

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they are contained. So if you remember nothing else from this section remember this. EN6931 is

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the invoice schema of record for cross-border regulated reporting. Your job is to make your systems

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capable of emitting it deterministically, not heroically, because once invoice semantics are

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standardized, the next unavoidable decision is the rail, interoperability or clearance. Interoperability

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verse clearance, the rail choice you can't avoid, once EN6931 becomes your semantic contract,

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you hit the next reality wall, the rail, not which vendor, the rail model, interoperability or clearance.

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Most organizations try to postpone this choice by pretending they can build one integration and

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adapt later. That's comforting. It also guarantees rework because these rails don't just change

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message routing. They change process behavior when an invoice is considered issued, what acknowledgements

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exist, how sequencing is enforced, and how exceptions are operationalized. Interoperability is the

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pepole-shaped world. You exchange structured invoices between parties through access points.

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The rail behaves like a network, you send, they receive, and the systems job is delivery plus baseline

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validation. It scales because it's not one country's portal, it's a federated model you can reuse

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across partners and in practice across jurisdictions that accept the same interoperability approach.

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Clearance is the Italy SDI archetype. The invoice goes through a central or quasi-central note that

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validates and often acknowledges before it's considered acceptable. It behaves less like email and

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more like a gate, you don't just transmit, you submit, and the system gives you a deterministic response

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that becomes part of the legal life cycle. That distinction matters. Because in interoperability,

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your biggest failure mode is mismatch. Invoices get delivered but don't reconcile

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cleanly with what gets reported or settled. In clearance, your biggest failure mode is blockage.

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Invoices can't proceed until they pass validation, which means operational downtime turns into

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revenue friction. Now here's where most people mess up, they assume interoperability is easy and clearance

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is hard. In reality, both are hard. They're hard in different places. Interoperability shifts

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pain into consistency and reconciliation. If you can send invoices, you can generate volume,

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volume exposes semantic drift, drift creates disputes, disputes create correction traffic. Correction

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traffic becomes exception debt unless you engineer the life cycle. Clearance shifts pain into

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determinism and sequencing. You have to get invoice numbering discipline, credit note linkage,

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and payload validity right the first time because the rail is designed to reject. It's not being

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rude. It's enforcing the control plane. VDAs goal according to the research is to reduce fragmentation

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but it does not magically erase member state choices. You will live in a mixed world. Some countries

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leaning into interoperability patterns, others maintaining or evolving clearance patterns,

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and some adding domestic requirements on top. Harmonization windows exist but that doesn't make

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your operating reality uniform. So what should you build? Not a country by country,

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spaghetti bowl of adapters bolted directly onto Dynamics 365 Finance. You build a provider mesh

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with a normalization layer. In other words, one canonical invoice object inside your architecture

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mapped from the 365 Finance then transformed into the required syntax and pushed onto the required

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rail with consistent identifiers and consistent evidence capture. Because the real product isn't

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we can send UBL. The real product is every invoice has a chain of custody that survives transport

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differences. That means your normalization layer must do a few unglomerious things reliably.

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One stable identity. A posted invoice in Dynamics needs a durable identifier that follows it through

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payload generation, submission, acknowledgments, and corrections. If you let each rail invent its own

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keys you've already lost reconciliation. Two status as a first class state machine submitted,

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accepted, rejected, corrected, resubmitted. Those are not technical statuses. Those are

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finance statuses now because they determine whether your reported data matches reality.

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Three, evidence capture. Payload version submission timestamp, response codes, and acknowledgements.

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Not we can retrieve it from the provider portal. If the audit story depends on a third party UI,

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you don't have evidence. You have a subscription. And here's the cynical part. Vendors will

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happily sell you one integration that works for the demo country. Then reality arrives. Version

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changes, new validation rules, outage behavior, and exceptions that multiply. Adaptors rot without

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governance. That's not a vendor problem. That's entropy. And you either design against entropy or

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you pay it forever. So pick your rail model per country if you must, but design your architecture as

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if both exist. Interoperability and clearance are just different front doors to the same backroom.

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Regulated transaction data with proof. Once you accept that you can move forward without betting

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your program on one perfect standard winning everywhere. And that sets up the first real anchor workflow.

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Dynamics invoice to e invoice to drr with an audit trail you can defend workflow one overview

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dynamics 365 finance invoice to drr with a defendable audit trail. Here's workflow one in the only

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form that matters. Can you take a posted invoice in dynamics 365 finance and prove without theater

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that the exact same transaction was digitally reported accepted or rejected with traceable reasons

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corrected if needed and stored with evidence that survives an audit because under Vida the

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audit question stops being did you file it becomes show me the chain of custody for this invoice.

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And if your answer is a shared drive and a provider portal login you don't have a chain of custody.

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You have a future argument start where truth starts posting dynamics 365 finance is the system of record

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that means the moment the invoice posts your VAT outcome is no longer a draft opinion. It's an

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accounting fact you're about to transmit to a government system on a deadline. So the first architectural

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requirement is brutal your tax determination result has to be final graded posting time if your

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process depends on will review tax later then your real system of record is not d365 it's a human

365
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inbox that won't survive transaction speed reporting now the second requirement define a canonical

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invoice object not a PDF not an XML file an internal version representation of the invoice as

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regulated data. This is where most enterprises quietly collapse into mapping spreadsheets and hope

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don't do that your canonical object should reflect e and 16 931 semantics cellar buyer vatid addresses

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line level tax categories totals payment means and the pieces that consistently trigger rejection

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when you let them drift you map d365 fields into that canonical object once with governance

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and you decide explicitly where extensions live because you will have internal fields that don't

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belong in a regulated packet fine keep them just don't contaminate the semantic contract then

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you build the event invoice posted this isn't philosophical it's operational when the invoice posts

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you emit an event that includes stable identifiers company invoice number internal record ID

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posting timestamp and whatever you need to retrieve the full canonical payload deterministically

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from there you generate the regulated payload and persisted persisted before you transmitted that's

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the line that separates adults from enthusiasts if you generate on the fly and then call an API you've

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created a system where you can't prove what you sent if the upstream data changes later under audit

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it should have been the same is meaningless you store the exact payload with a hash if you want

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to be extra honest with yourself and you treat it as immutable evidence now you submit to drr through

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the rail that applies interoperability or clearance and you record the response and no record

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the response doesn't mean log a 200 okay in an integration runtime it means capture the meaningful

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artifacts submission timestamp rail identifier message ID acknowledgement or rejection code and

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any validation errors that the rail provides if you can't tie the response back to the specific

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payload version you've built a story not a controller at this point your workflow splits into two

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equally important branches branch one is success you mark the invoice as reported you store the

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acknowledgement and you make it queryable not in a pdf archive in structured storage you can

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report on branch two is rejection and this is where your design either scales or collapses a rejected

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invoice must enter an exception life cycle triage remediation resubmission and correction trail

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power automate is the obvious orchestration layer here because it can route the exception to the right

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owner based on rejection category master data tax coding totals timing duplicate number missing

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vat id it can enforce that remediation happens in the system of record not in a sidecar spreadsheet

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and it can require evidence capture who changed what why and what got resubmitted you also need one

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more rule the damp potency if you resubmit the same invoice payload the rail must not treat it

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as a brand new transaction your submission design needs stable idemputant keys tied to the invoice

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identity and payload version otherwise outages create duplicates duplicates create corrections

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and corrections create permanent exception debt finally the visibility layer power bi doesn't

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exist here to impress anyone it exists to stop silent failure you track submission success rate

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rejection categories exception aging and time from posting to reported that last one is the

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killer metric because it exposes process drift long before you miss statutory deadlines this is workflow

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number one post in d365 compile regulated payload persisted submitted capture acknowledgement route

402
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exceptions and expose health daily not glamorous deterministic master data is now a tax control

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surface workflow one only works if the invoice can compile and the invoice only compiles if your

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master data stops behaving like helpful defaults and starts behaving like regulated inputs that's the

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shift master data becomes a tax control surface most organizations treat customer and product master

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data as operational convenience sales once speed finance once enough to post and everyone quietly

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accepts that the real cleanup happens later under the time lines later is not a phase it's a failure

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mode start with the most common break customer vat id if the vat id is missing malformed or attached to

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the wrong legal entity record your invoice payload either fails validation or creates mismatches

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when the purchaser reports their side and because the research points to transaction level reporting

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and fast deadlines the mismatch becomes visible quickly you don't get months of ambiguity you get

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immediate exception traffic now here's the thing most people miss a vat id check is not a courtesy

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lookup it's evidence in the research vs shows up as the obvious reference point for vat id validation

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whether you validate through v is or another governed mechanism the architectural requirement is

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the same you need to record that you checked what you checked when you checked and what result you got

416
00:32:22,640 --> 00:32:27,200
otherwise you're relying on a human memory of we usually validate that all it's don't accept

417
00:32:27,200 --> 00:32:32,000
usually so in a Microsoft stack you want the validation result to become part of the transaction

418
00:32:32,000 --> 00:32:37,360
context not a note not an email a structured attribute tied to the customer record and where

419
00:32:37,360 --> 00:32:43,040
appropriate captured again at transaction time next addresses everyone thinks address fields are

420
00:32:43,040 --> 00:32:47,680
boring until they're wrong under structured invoicing address normalization stops being cosmetic

421
00:32:47,680 --> 00:32:52,560
because it affects identification place of supply logic in some scenarios and basic invoice

422
00:32:52,560 --> 00:32:58,640
completeness rules free text addresses inconsistent country codes and half populated fields don't

423
00:32:58,640 --> 00:33:03,520
just look messy they generate rejections and disputes then this product and service classification

424
00:33:03,520 --> 00:33:08,080
most ERP's tolerate sloppy item categorization because finance can still post revenue

425
00:33:08,080 --> 00:33:12,640
vd i doesn't reward that if your tax determination depends on whether something is a service a good

426
00:33:12,640 --> 00:33:18,160
a specific category or subject to special treatment then miscellaneous becomes a tax risk generator

427
00:33:18,160 --> 00:33:22,560
and if your tax outcome is wrong your e invoice semantics can be perfectly formatted and still

428
00:33:22,560 --> 00:33:27,280
represent the wrong truth that's worse than rejection rejection is loud wrong truth is silent

429
00:33:27,280 --> 00:33:32,160
banking details also show up as a practical constraint in the webinar transcript they call out

430
00:33:32,160 --> 00:33:37,200
that the supplier needs to include bank account data on the invoice and they mention extra requirements

431
00:33:37,200 --> 00:33:42,720
around credit invoicing and sequential numbering discipline that means bank account data stops being

432
00:33:42,720 --> 00:33:48,000
kept somewhere in finance it becomes a regulated invoice field with correctness expectations if you let

433
00:33:48,000 --> 00:33:52,400
multiple bank accounts float around with no governance you will eventually send the wrong one in

434
00:33:52,400 --> 00:33:56,640
a regulated packet and then you get to explain that mistake to customers and authorities at the same

435
00:33:56,640 --> 00:34:01,440
time this is where first time right stops being a slogan and become survival real time or near real

436
00:34:01,440 --> 00:34:06,080
time reporting kills month and cleanup because your cleanup window shrinks to the operational window

437
00:34:06,080 --> 00:34:12,000
between invoice posted and deadline reached if your process assumes that master data issues are rare

438
00:34:12,000 --> 00:34:16,800
your process is lying master data issues are common they were just hidden by delay so what does

439
00:34:16,800 --> 00:34:22,160
master data as a control surface look like in dynamics 365 finance plus power platform it means

440
00:34:22,160 --> 00:34:27,120
you add preventive controls where the system can actually enforce them you validate VAT IDs at

441
00:34:27,120 --> 00:34:31,760
customer onboarding and again when needed at transaction time you constrain country and currency

442
00:34:31,760 --> 00:34:37,040
codes you make certain fields non optional because your regulated outputs require them you standardize

443
00:34:37,040 --> 00:34:42,080
address structures you stop letting users override tax relevant attributes without leaving a trace

444
00:34:42,080 --> 00:34:47,040
and you make those controls visible power automate becomes the mechanism for master data exception

445
00:34:47,040 --> 00:34:53,680
routing missing VIT ID invalid format inconsistent address product classification gaps it assigns

446
00:34:53,680 --> 00:34:58,720
ownership and forces remediation before you generate a regulated payload not after the rail rejects it

447
00:34:58,720 --> 00:35:03,600
power BI becomes your master data truth serum which entities generate the most invoice rejections

448
00:35:03,600 --> 00:35:07,840
which fields are most often missing and which business units are creating exception dead faster than

449
00:35:07,840 --> 00:35:12,400
they resolve it if you can't see that trend you can't stop it and the cynical reality is this master

450
00:35:12,400 --> 00:35:17,440
data controls always erode unless you enforce them by design someone will ask for a bypass someone

451
00:35:17,440 --> 00:35:23,120
will need to ship someone will override a field justice once those exceptions accumulate under

452
00:35:23,120 --> 00:35:29,120
VITA they don't just accumulate quietly they become measurable failure daily so treat master data as

453
00:35:29,120 --> 00:35:33,760
part of the VITA pipeline not a prerequisite project you'll get to later because the invoice is

454
00:35:33,760 --> 00:35:38,240
only as compliant as the weakest master record that feeds it and once you accept that the next

455
00:35:38,240 --> 00:35:43,040
uncomfortable truth is obvious exceptions aren't edge cases they're the product exceptions are not

456
00:35:43,040 --> 00:35:48,000
edge cases they are the product most teams talk about exceptions like their debris an occasional bad

457
00:35:48,000 --> 00:35:53,040
record a weird customer a one off credit note clean it up and move on that mental model dies under

458
00:35:53,040 --> 00:35:58,320
VITA under transaction speed reporting exceptions are not rare they are guaranteed and the only real

459
00:35:58,320 --> 00:36:03,200
question is whether you designed an exception system or whether you accidentally created one out of

460
00:36:03,200 --> 00:36:09,360
inboxes spreadsheets and panic because exceptions don't come from bad people or bad software they come

461
00:36:09,360 --> 00:36:15,120
from normal enterprise behavior incomplete onboarding rushed postings pricing corrections retroactive

462
00:36:15,120 --> 00:36:20,720
discounts disputes returns partial shipments and the eternal truth that no sale system and no

463
00:36:20,720 --> 00:36:26,480
finance system ever agree perfectly in real time now apply VITA's constraint the regulated payload

464
00:36:26,480 --> 00:36:30,960
has to be issued and reported inside a tight window and it has to be coherent enough to survive

465
00:36:30,960 --> 00:36:35,600
validation and matching that means every exception turns into a clock and clocks create operational

466
00:36:35,600 --> 00:36:39,680
pressure operational pressure creates shortcuts shortcuts create more exceptions this is how

467
00:36:39,680 --> 00:36:44,000
exception that becomes permanent so let's be concrete about what exceptions actually look like in

468
00:36:44,000 --> 00:36:50,000
this world you'll see hard validation failures missing VIT IDs invalid VIT ID formats inconsistent

469
00:36:50,000 --> 00:36:56,080
country codes unsupported tax category codes totals that don't add up the way the schema expects

470
00:36:56,080 --> 00:37:01,200
missing bank details were required duplicate invoice numbers credit notes that don't link

471
00:37:01,200 --> 00:37:06,480
cleanly to the original you'll also see timing failures invoice posted but not issued in time

472
00:37:06,480 --> 00:37:11,120
issued but not submitted in time submission stuck during an outage purchase aside reporting

473
00:37:11,120 --> 00:37:16,640
mismatches that surface as disputes or follow-up queries those are the exceptions that hurt most

474
00:37:16,640 --> 00:37:22,160
because they aren't wrong data they're wrong process behavior and then there's the quiet category

475
00:37:22,160 --> 00:37:26,800
semantic failures everything passes schema validation but the business meaning is wrong

476
00:37:26,800 --> 00:37:31,360
wrong customer classification wrong reverse charge treatment wrong place of supply assumption wrong

477
00:37:31,360 --> 00:37:36,560
product taxability those don't bounce they settle into your ledger as false confidence so if

478
00:37:36,560 --> 00:37:42,080
exceptions are inevitable the architecture goal shifts you don't aim for no exceptions you aim for

479
00:37:42,080 --> 00:37:47,040
a deterministic exception life cycle that you can run daily at volume without turning your

480
00:37:47,040 --> 00:37:52,400
tax function into a ticket desk a usable life cycle has four stages and if you skip any of them you

481
00:37:52,400 --> 00:37:58,800
create chaos first triage every rejection or mismatch must land in one place with enough context to

482
00:37:58,800 --> 00:38:04,320
decide what it is not invoice failed why did it fail who owns the fix and what's the deadline clock

483
00:38:04,320 --> 00:38:08,880
if you can't answer those three things in the first minute you've already lost second remediation

484
00:38:08,880 --> 00:38:13,920
the fix must happen in the system of record not in the payload if you patch the XML and resubmit

485
00:38:13,920 --> 00:38:18,800
without correcting dynamics 365 finance or the upstream master data you've created a forked

486
00:38:18,800 --> 00:38:23,120
reality forked reality is audit fuel third resubmission resubmission must be controlled and

487
00:38:23,120 --> 00:38:28,240
competent same invoice identity new payload version traceable link to the correction reason

488
00:38:28,240 --> 00:38:32,640
if your resubmission can accidentally produce duplicates you'll spend your life issuing credit

489
00:38:32,640 --> 00:38:38,560
notes to cancel your own mistakes fourth correction trail every change needs a reason an actor a

490
00:38:38,560 --> 00:38:43,120
timestamp and a link between the original and the corrected representation not because it's

491
00:38:43,120 --> 00:38:48,240
nice governance because under video the entire point is that transactions become inspectable if your

492
00:38:48,240 --> 00:38:52,560
corrections aren't inspectable you're just generating noise faster this is where power platform

493
00:38:52,560 --> 00:38:57,360
earns its keep power automate isn't just moving data it's enforcing the life cycle create an

494
00:38:57,360 --> 00:39:02,880
exception record when a rejection arrives classified rooted to the owner require remediation steps

495
00:39:02,880 --> 00:39:08,240
and only then trigger resubmission and when humans have to intervene automate can force them to

496
00:39:08,240 --> 00:39:13,760
leave evidence behind what they changed and why power bi is the part nobody wants it first because

497
00:39:13,760 --> 00:39:19,440
it exposes reality you need a small set of kpi's that make exception that visible exception rate

498
00:39:19,440 --> 00:39:25,200
exception aging rejection category distribution and time from posting to accepted those numbers will

499
00:39:25,200 --> 00:39:30,320
look ugly in the beginning good that ugliness is the map of where your architecture leaks tax truth

500
00:39:30,320 --> 00:39:34,960
and you also need ownership if tax owns the rules finance op's owns the postings it owns the rails

501
00:39:34,960 --> 00:39:39,760
and nobody owns the exception qn to n you've built a system that cannot improve the q will grow

502
00:39:39,760 --> 00:39:44,560
until the business demands bypasses and then your deterministic model collapses back into probabilistic

503
00:39:44,560 --> 00:39:49,280
chaos so treat exceptions as the product the operational surface where we either either becomes

504
00:39:49,280 --> 00:39:54,400
manageable or becomes a permanent crisis once you build that product the next awkward topic appears

505
00:39:54,400 --> 00:40:00,400
immediately summary invoices and credit notes the places where legacy convenience still exists

506
00:40:00,400 --> 00:40:06,240
but only on a leash summary invoices credit notes and the death of casual adjustments summary invoices

507
00:40:06,240 --> 00:40:11,440
are where legacy process tries to survive and yes we still allows them but only in a way that exposes

508
00:40:11,440 --> 00:40:16,400
how much enterprises used batching as a hiding place in the webinar research the speakers make it

509
00:40:16,400 --> 00:40:22,080
explicit transaction level reporting is the default but summary invoices remain possible only

510
00:40:22,080 --> 00:40:27,440
within tight conditions bundled within the same month the transactions occurred and then issued

511
00:40:27,440 --> 00:40:33,120
within 10 days after that month ends so you don't get will summarize the quarter you don't get

512
00:40:33,120 --> 00:40:37,840
will catch up later you get a narrow window where batching exists as a controlled exception not as

513
00:40:37,840 --> 00:40:42,560
your operating model that distinction matters because summary invoices aren't a paperwork decision

514
00:40:42,560 --> 00:40:46,800
anymore there an architectural decision you're choosing to compress multiple supplies into one

515
00:40:46,800 --> 00:40:52,320
regulated packet that means your system must still retain line level and transaction level traceability

516
00:40:52,320 --> 00:40:58,640
internally because disputes corrections and audits don't accept it was in the summary they ask

517
00:40:58,640 --> 00:41:03,120
which underlying transaction produced this line and where is the evidence now here's where most

518
00:41:03,120 --> 00:41:07,680
organizations get hurt they use summary invoices today because their operational systems can't keep

519
00:41:07,680 --> 00:41:12,560
up with invoice issuance at transaction speed they ship they deliver they settle and then they

520
00:41:12,560 --> 00:41:17,200
invoice in batches because the data is messy and the people are busy under vida batching isn't

521
00:41:17,200 --> 00:41:22,320
a fix for that mess it's just a different way to package the mess and then transmit it on a deadline

522
00:41:22,320 --> 00:41:27,200
so if you plan to use summary invoices you need to treat the underlying transaction set as a

523
00:41:27,200 --> 00:41:32,000
governed unit a stable selection rule stable identifiers for each included supply a deterministic

524
00:41:32,000 --> 00:41:36,560
way to reproduce the summary contents later and a correction model that can surgically fix one

525
00:41:36,560 --> 00:41:40,800
underlying item without tearing the whole bundle apart if you can't do that summary invoicing

526
00:41:40,800 --> 00:41:46,000
becomes a denial strategy and denial strategies don't survive real-time reporting now credit notes

527
00:41:46,000 --> 00:41:50,320
credit notes are where casual adjustments go to die because vida compresses the correction

528
00:41:50,320 --> 00:41:55,600
life cycle and forces traceability the webinar calls out extra requirements around credit invoicing

529
00:41:55,600 --> 00:42:00,080
and sequential numbering discipline and it's the predictable direction of travel if you correct

530
00:42:00,080 --> 00:42:04,880
you must link if you link you must be consistent if you're consistent you can be audited without

531
00:42:04,880 --> 00:42:10,000
argument this is the core shift corrections stop being accounting convenience and become regulated

532
00:42:10,000 --> 00:42:15,040
events in a periodic world a credit note could be a blunt instrument you could write one at month

533
00:42:15,040 --> 00:42:21,120
end to true up a mess rebates returns pricing disputes will just credit them 3% it might still be

534
00:42:21,120 --> 00:42:25,840
legally acceptable but it lived in a low observability environment where the authority saw it later

535
00:42:25,840 --> 00:42:30,720
aggregated and usually without the context that produced it under vida style timelines that

536
00:42:30,720 --> 00:42:35,840
correction becomes visible quickly and comparable across parties the purchase aside reports too

537
00:42:35,840 --> 00:42:41,280
mismatches don't sit quietly in a reconciliation spreadsheet they surface as detectable behavior

538
00:42:41,280 --> 00:42:45,920
so credit notes must behave like linked amendments they need a clean reference to the original

539
00:42:45,920 --> 00:42:51,200
invoice identity they need sequencing discipline that doesn't drift and they need a correction

540
00:42:51,200 --> 00:42:55,440
reason that isn't free text theater but a categorization you can report on and defend it this is

541
00:42:55,440 --> 00:43:01,200
where finance operations need to stop treating adjustments as a normal escape valve because adjustments

542
00:43:01,200 --> 00:43:06,080
are entropy generators they accumulate they hide underlying data quality failures and they turn

543
00:43:06,080 --> 00:43:11,120
your regulated pipeline into a perpetual exception machine in Microsoft terms this is a life cycle

544
00:43:11,120 --> 00:43:16,880
design problem dynamics 365 finance has to represent credit notes and corrections in a way that

545
00:43:16,880 --> 00:43:22,400
maintains linkage and numbering discipline and it has to do so consistently across business units

546
00:43:22,400 --> 00:43:27,280
if different teams correct in different ways some with credit notes some with negative invoices

547
00:43:27,280 --> 00:43:32,560
some with manual journals you'll create multiple representations of the same business reality

548
00:43:32,560 --> 00:43:36,880
under vida's observability that becomes confusion you can't reconcile power automate becomes

549
00:43:36,880 --> 00:43:40,720
the governor when a correction is required automate should route it through a controlled flow

550
00:43:40,720 --> 00:43:44,480
identify the original invoice choose the correction mechanism that matches policy

551
00:43:44,480 --> 00:43:48,480
require the minimum evidence and ensure the resubmission happens with traceable linkage

552
00:43:48,480 --> 00:43:53,120
and importantly it should prevent the lazy path if someone tries to bypass with a journal entry

553
00:43:53,120 --> 00:43:57,200
that breaks the chain of custody the system should refuse it because we needed it fast is not

554
00:43:57,200 --> 00:44:02,000
a compliance argument and power bi becomes the accountability layer you track how many corrections

555
00:44:02,000 --> 00:44:07,920
you're generating why you're generating them and where they originate customer master data pricing

556
00:44:07,920 --> 00:44:14,080
tax coding timing duplicate numbering or operational disputes if correction volume climbs your system

557
00:44:14,080 --> 00:44:19,280
is decaying quietly daily so yes summary invoices still exist credit notes still exist

558
00:44:19,280 --> 00:44:25,600
but the error of casual adjustments is over because vida makes every correction regulated

559
00:44:25,600 --> 00:44:30,800
inspecable event and once corrections become events you either design the chain of custody or

560
00:44:30,800 --> 00:44:35,920
you spend your life explaining why it broke finance operations under vida less clerical work more

561
00:44:35,920 --> 00:44:41,520
systems thinking once you accept that invoices are regulated packets and corrections are regulated events

562
00:44:41,520 --> 00:44:46,240
finance operations stops being back office it becomes part of the control plane that's not a complement

563
00:44:46,240 --> 00:44:52,160
it's a consequence in the periodic world finance ops could survive on rhythm post during the month

564
00:44:52,160 --> 00:44:58,320
fix at month end reconcile in a few heroic sprints file and move on people build careers on being good at

565
00:44:58,320 --> 00:45:04,480
cleanup they knew where the bodies were buried which customers always had missing vat IDs which

566
00:45:04,480 --> 00:45:09,920
business unit loved free text tax codes which country team never match the sales listing on the first

567
00:45:09,920 --> 00:45:15,440
try vida removes the hiding place with transaction level reporting and short issuance windows described

568
00:45:15,440 --> 00:45:20,560
in the research the cleanup buffer collapses so the work changes shape there's less clerical effort

569
00:45:20,560 --> 00:45:25,360
that can be deferred and more systems thinking that has to happen continuously what is the pipeline

570
00:45:25,360 --> 00:45:30,960
doing today where is it drifting and which control is failing this is why the webinar line about roles

571
00:45:30,960 --> 00:45:36,480
drifting isn't optional they said the compliance specialist becomes also IT specialist a bit that's

572
00:45:36,480 --> 00:45:40,960
exactly right and it's exactly what most organizations resist not because they disagree but because

573
00:45:40,960 --> 00:45:46,560
it breaks the old contract tax defines rules finance posts transactions IT run systems vida turns

574
00:45:46,560 --> 00:45:50,800
that into one pipeline with shared failure modes and the practical reason is simple the problem

575
00:45:50,800 --> 00:45:56,320
isn't how do we file vat the problem is how do we prevent invalid transactions from becoming regulated

576
00:45:56,320 --> 00:46:02,720
outputs that's operations not policy so what changes inside finance operations first ownership shifts

577
00:46:02,720 --> 00:46:09,440
from periods to queues under vida the unit of work isn't closed the month it's drain the exception q

578
00:46:09,440 --> 00:46:15,200
rejections missing data mismatches timing breaches duplicate numbering issues those are no longer edg cases

579
00:46:15,200 --> 00:46:20,960
they're daily work and if you don't operationalize that q it grows until the business demands bypasses

580
00:46:20,960 --> 00:46:26,800
and then your control plane becomes decorative second the close compresses not because the law says

581
00:46:26,800 --> 00:46:33,520
close faster but because real-time visibility makes delay indefensible if you can see daily that 6

582
00:46:33,520 --> 00:46:37,440
percent of invoices are stuck in exception state then month end becomes the moment you discover

583
00:46:37,440 --> 00:46:41,600
whether you manage the pipeline or ignored it this is where the system punishes you

584
00:46:41,600 --> 00:46:46,240
exception debt compounds quietly then explodes during the close when everyone is tired and shortcuts

585
00:46:46,240 --> 00:46:52,960
look reasonable third automation becomes mandatory not nice mandatory the webinar described volume

586
00:46:52,960 --> 00:46:57,840
and deadlines making manual work impossible and that's not rhetoric if invoices must be issued and

587
00:46:57,840 --> 00:47:02,880
reported inside tight windows and both sides report the number of touchpoints multiplies humans

588
00:47:02,880 --> 00:47:07,680
can fix a dozen exceptions they can't fix thousands with evidence linkage and traceability

589
00:47:07,680 --> 00:47:13,200
so you either automate triage and routing or you accept that your compliance posture is probabilistic

590
00:47:13,200 --> 00:47:19,040
and collapsing this is where Microsoft's stack fits without pretending it's magic dynamics 365

591
00:47:19,040 --> 00:47:24,080
finance remains the system of record but finance operations has to treat it like a regulated

592
00:47:24,080 --> 00:47:28,160
event generator that means standardizing posting practices numbering policies credit note

593
00:47:28,160 --> 00:47:33,280
behaviors and master data requirements across business units if one team posts their way you don't

594
00:47:33,280 --> 00:47:38,640
get flexibility you get ungoverned variance variance is an entropy generator power automate becomes

595
00:47:38,640 --> 00:47:43,280
the operational fabric not for approvals in the abstract for deterministic exception routing

596
00:47:43,280 --> 00:47:47,280
who owns this failure what remediation is allowed what evidence is required and what gets

597
00:47:47,280 --> 00:47:51,920
resubmitted you don't want creativity here you want repeatable paths that produce the same outcome

598
00:47:51,920 --> 00:47:56,640
regardless of who is on shift power bi becomes the daily control room not a reporting artifact

599
00:47:56,640 --> 00:48:01,840
for leadership a working instrument for operations exception rate exception aging success rate and

600
00:48:01,840 --> 00:48:06,800
time to issue those metrics answer the only question that matters under either are you compliant today

601
00:48:06,800 --> 00:48:10,880
or are you accumulating failure that will surface later and here's the organizational consequence

602
00:48:10,880 --> 00:48:16,480
nobody budgets for tax finance ops and it now share one pipeline or entropy wins if tax designs

603
00:48:16,480 --> 00:48:22,320
rules that finance can't execute at speed the q explodes if finance posts transactions that it can't

604
00:48:22,320 --> 00:48:27,760
reliably transmit and prove the evidence breaks if it builds rails without operational ownership

605
00:48:27,760 --> 00:48:33,120
exceptions become someone else's problem and stay unresolved the system doesn't care whose job title

606
00:48:33,120 --> 00:48:38,000
is on the org chart it will surface the failure where the pipeline breaks so yes there will be less

607
00:48:38,000 --> 00:48:42,400
clerical work eventually because structured data and automation remove some manual touch points

608
00:48:42,400 --> 00:48:47,520
but in the transition finance operations becomes more technical more continuous and more accountable

609
00:48:47,520 --> 00:48:51,920
and that's why the next topic matters when platforms become the tax counterparty operations

610
00:48:51,920 --> 00:48:57,360
stops being a department it becomes product design pillar two in one sentence platforms become

611
00:48:57,360 --> 00:49:02,480
the tax counterparty when sellers aren't pillar two is the part most enterprises ignore because

612
00:49:02,480 --> 00:49:07,360
it sounds like it's for ride sharing apps and holiday rentals that framing is comfortable it's also

613
00:49:07,360 --> 00:49:12,080
how you miss the point in one sentence pillar two says this when the underlying seller isn't the

614
00:49:12,080 --> 00:49:16,880
party the tax authority can reliably collect from the platform becomes the tax counterparty

615
00:49:16,880 --> 00:49:23,360
not the messenger not the marketplace the counter party the research is clear on scope in the

616
00:49:23,360 --> 00:49:27,920
compromise package short term accommodation and passenger transport and it's also clear that the

617
00:49:27,920 --> 00:49:33,600
original proposal was broader including more e-commerce platform deeming but that got cut back

618
00:49:33,600 --> 00:49:38,560
in the final agreement that reduction doesn't make this pillar small it just makes it more targeted

619
00:49:38,560 --> 00:49:44,160
because the mechanism is the real change and mechanism spread once a regulator proves that moving

620
00:49:44,160 --> 00:49:50,000
liability to the platform increases collectability that pattern doesn't stay in one box forever systems

621
00:49:50,000 --> 00:49:56,160
copy successful control patterns always now what triggers the deemed supplier treatment in the material

622
00:49:56,160 --> 00:50:01,520
you provided the webinar describes it bluntly if the underlying supplier isn't obliged to pay vat

623
00:50:01,520 --> 00:50:07,040
or the supplier doesn't provide a vat number the platform needs to charge vat on sales made via the

624
00:50:07,040 --> 00:50:12,320
platform and remitted to the authorities the platform has to check the status collect evidence

625
00:50:12,320 --> 00:50:17,520
and decide whether it is responsible that means your platform needs a decision engine and decision

626
00:50:17,520 --> 00:50:22,080
engines are where good intentions go to die if you don't enforce them with design because does

627
00:50:22,080 --> 00:50:28,000
this supplier have a vat number sounds like a simple field in reality it's on boarding validation

628
00:50:28,000 --> 00:50:33,760
life cycle and audit trail vat numbers change supplier status changes people type garbage into forms

629
00:50:33,760 --> 00:50:38,320
and if your platform can't prove that it asked checked and classified correctly at the time of

630
00:50:38,320 --> 00:50:42,640
the transaction you're not running a platform you're running conditional chaos with payment rails

631
00:50:42,640 --> 00:50:48,320
attached here's the uncomfortable truth pillar two makes tax a runtime concern in product design

632
00:50:48,320 --> 00:50:53,280
it reaches into your marketplace on boarding flow your pricing display your checkout calculation

633
00:50:53,280 --> 00:50:58,160
your invoicing logic your refund flow and your payout statements it's not a finance back office

634
00:50:58,160 --> 00:51:03,040
issue anymore because liability is determined at transaction time based on seller status and evidence

635
00:51:03,040 --> 00:51:08,560
captured at that moment so in architecture terms a platform underveda needs three things that most

636
00:51:08,560 --> 00:51:13,840
platforms don't build deliberately first identity and status capture you need to represent the seller

637
00:51:13,840 --> 00:51:19,680
as an entity with tax relevant attributes vat registration status vat number where applicable and

638
00:51:19,680 --> 00:51:24,880
whatever other status flags your tax team will insist on later the key is not the fields the key is

639
00:51:24,880 --> 00:51:30,240
that the platform must treat these as controlled inputs not optional profile data second decision

640
00:51:30,240 --> 00:51:36,880
logging every transaction needs a recorded decision platform is deemed supplier or platform is not

641
00:51:36,880 --> 00:51:42,080
deemed supplier and that decision must be reproducible not we usually treat these sellers as non-registered

642
00:51:42,080 --> 00:51:49,200
reproducible with linked evidence what data was present what validation was performed and when

643
00:51:49,200 --> 00:51:54,880
third reversible accounting platforms live on refunds cancellations chargebacks and disputes

644
00:51:54,880 --> 00:52:00,080
if you become the vat counter party you also become responsible for reversing vat correctly

645
00:52:00,080 --> 00:52:04,240
when the commercial transaction reverses if your refund pipeline can reverse money but not

646
00:52:04,240 --> 00:52:09,040
reverse tax with traceable linkage you've created a regulatory drift machine it will look fine

647
00:52:09,040 --> 00:52:14,080
in aggregate until it doesn't now anchor this back to the Microsoft ecosystem because that's where

648
00:52:14,080 --> 00:52:19,200
people keep getting this wrong if you run a platform like model dynamics 365 finance doesn't magically

649
00:52:19,200 --> 00:52:23,760
solve the deemed supplier logic finance will post what you tell it to post the liability decision has

650
00:52:23,760 --> 00:52:28,480
to happen upstream in your platform transaction layer and then land in finance as an accounting truth

651
00:52:28,480 --> 00:52:33,680
who supplied what who invoiced whom and which vat treatment applies power platform becomes the

652
00:52:33,680 --> 00:52:39,760
operational glue when reality breaks power automate can govern seller onboarding exceptions missing vat

653
00:52:39,760 --> 00:52:44,560
numbers failed validations and evidence capture power be I can show you how often the platform is

654
00:52:44,560 --> 00:52:50,480
becoming deemed supplier where exceptions cluster and whether your vat collected aligns with your deemed

655
00:52:50,480 --> 00:52:55,440
supply decisions and yes this pillar still collides with pillar one and pillar three if the platform

656
00:52:55,440 --> 00:53:00,480
becomes the supplier invoices still have to exist in structured form where applicable reporting

657
00:53:00,480 --> 00:53:05,680
still has to reconcile OSS still becomes relevant for cross border B2C flows the pipeline doesn't

658
00:53:05,680 --> 00:53:11,920
care that you call it platform rules it's still calculate report settle file prove pillar two just

659
00:53:11,920 --> 00:53:16,960
changes who is on the hook when the underlying seller isn't platform operating model redesign

660
00:53:16,960 --> 00:53:21,440
pricing and contracts stop being business only once the platform becomes the tax counterparty

661
00:53:21,440 --> 00:53:26,240
the operating model stops being a commercial abstraction it becomes a set of tax bearing decisions

662
00:53:26,240 --> 00:53:30,000
what the buyer sees what the seller agrees to what the platform retains and what gets

663
00:53:30,000 --> 00:53:34,640
remitted and the system will enforce those decisions whether you designed them or not start with

664
00:53:34,640 --> 00:53:39,600
pricing display because that's where liability turns into customer experience if your platform

665
00:53:39,600 --> 00:53:43,920
shows tax inclusive prices in one market and tax exclusive in another you're not just changing

666
00:53:43,920 --> 00:53:49,520
a UI label you're changing expectations about what the price means under a deemed supplier model the

667
00:53:49,520 --> 00:53:54,640
platform may be the one calculating and charging vat which means the platform owns the accuracy

668
00:53:54,640 --> 00:53:59,120
of that displayed price when the tax engine is wrong the customer doesn't blame the underlying host

669
00:53:59,120 --> 00:54:04,160
or driver they blame the platform that's not moral judgment it's behavior reality so the platform

670
00:54:04,160 --> 00:54:09,600
has to decide explicitly are we presenting gross prices net prices or a hybrid with tax breakdown

671
00:54:09,600 --> 00:54:14,000
and whatever you choose has to be consistent with how you invoice how you settle and how you reverse

672
00:54:14,000 --> 00:54:18,320
because refunds are where we'll fix it later goes to die if you refund a gross amount you must

673
00:54:18,320 --> 00:54:23,520
reverse the vat correctly if you refund a net amount in a just fee separately you must still reverse

674
00:54:23,520 --> 00:54:28,240
vat in proportion to what was actually charged if your workflow can't do that deterministically your

675
00:54:28,240 --> 00:54:33,360
accounting will drift and your reporting will become a probabilistic model now contracts most

676
00:54:33,360 --> 00:54:39,040
platforms treat contracts like a legal wrapper around product behavior terms of service seller agreements

677
00:54:39,040 --> 00:54:44,640
payout terms under pillar two contracts become tax architecture they define who supplies what who

678
00:54:44,640 --> 00:54:49,360
invoices whom and what evidence the platform can demand from sellers to make the deemed supplier

679
00:54:49,360 --> 00:54:54,080
decision this is where ambiguity creates double taxation or non-collection if the platform contract

680
00:54:54,080 --> 00:54:58,800
describes the platform as million intermediary but the platform is treated as deemed supplier for

681
00:54:58,800 --> 00:55:04,000
certain transactions you've created a split brain model the legal language says not us while the

682
00:55:04,000 --> 00:55:10,560
tax rule says you that mismatch isn't theoretical it appears as disputes when sellers cvat with

683
00:55:10,560 --> 00:55:16,000
held or when buyers receive invoices that don't match their expectation of who supplied the service

684
00:55:16,000 --> 00:55:21,920
so the contract has to align with operational reality who is the supplier of record in deemed scenarios

685
00:55:21,920 --> 00:55:26,800
what data the seller must provide and what happens when they don't what the platform is allowed to do

686
00:55:26,800 --> 00:55:32,160
when seller status changes how corrections cancellations and chargebacks affect vat treatment and yes

687
00:55:32,160 --> 00:55:36,720
this is painful because it forces product and legal to stop writing flexible language and start

688
00:55:36,720 --> 00:55:42,880
writing deterministic commitments that the systems can execute next payouts payout statements

689
00:55:42,880 --> 00:55:47,280
look like a finance detail until you realize they are the audit story customers and sellers actually

690
00:55:47,280 --> 00:55:52,080
read under deemed supplier the platform might collect the full amount from the buyer then retain fees

691
00:55:52,080 --> 00:55:57,120
retain vat to remit and pay the remainder to the seller if your payout statement can't explain that

692
00:55:57,120 --> 00:56:02,960
clearly you will generate disputes at scale and disputes become operational load which becomes

693
00:56:02,960 --> 00:56:07,440
shortcuts which becomes exception debt the payout statement needs to reconcile these numbers

694
00:56:07,440 --> 00:56:13,120
cleanly gross charge to buyer vat charged and retained for remittance where applicable platform fees

695
00:56:13,120 --> 00:56:18,400
and whether fees themselves have vat treatment depending on the scenario net paid out to the seller

696
00:56:18,400 --> 00:56:22,400
and it needs linkage to transaction identifiers that also tie back to invoicing and reporting

697
00:56:22,400 --> 00:56:26,560
identifiers otherwise your platform ledger and your tax ledger become too narratives that can't

698
00:56:26,560 --> 00:56:31,600
be reconciled without heroics now the ugly part refunds cancellations and chargebacks platforms live

699
00:56:31,600 --> 00:56:36,880
in reversals and reversals under pillar two aren't just reverse the payment they are tax events

700
00:56:36,880 --> 00:56:41,840
if you can't reverse vat correctly and link that reversal back to the original transaction and

701
00:56:41,840 --> 00:56:47,360
invoice representation you'll accumulate tiny mismatches that turn into big compliance headaches

702
00:56:47,360 --> 00:56:52,560
once reporting becomes near real time and cross validated so architecturally you need a reversal

703
00:56:52,560 --> 00:56:58,320
model that is transaction linked not period adjusted not will adjust vat in the next return

704
00:56:58,320 --> 00:57:03,840
that's the old world the new world is correction trails exist and mismatches are detectable this is

705
00:57:03,840 --> 00:57:09,040
where the Microsoft stack should be positioned carefully dynamics 365 finance is where the accounting

706
00:57:09,040 --> 00:57:16,320
truth lands gross fees vat liability and payables but the platform system is where the decision is made

707
00:57:16,320 --> 00:57:20,960
and where the evidence is captured if you feed finance a summarized journal without transaction

708
00:57:20,960 --> 00:57:25,520
context you've made finance blind blind systems can't prove power platform is the bridge power

709
00:57:25,520 --> 00:57:30,720
automate can enforce seller onboarding completeness root missing vat number issues and gate payouts

710
00:57:30,720 --> 00:57:35,280
when evidence is missing power bi can expose the operating model metrics you actually need

711
00:57:35,280 --> 00:57:40,560
deemed supply share dispute rate tied to vat with holding refund driven vat reversals and

712
00:57:40,560 --> 00:57:46,240
reconciliation gaps between platform ledger and finance pricing contracts payouts reversals

713
00:57:46,240 --> 00:57:50,960
under vda those aren't business only decisions they're the platform's tax control plane

714
00:57:50,960 --> 00:57:56,720
platform evidence identity checks location proofs and auditability if pinner two makes the platform

715
00:57:56,720 --> 00:58:01,520
the tax counterparty evidence becomes the platform's real inventory not listings not rides not

716
00:58:01,520 --> 00:58:05,920
night's booked evidence because the platform's liability decision isn't judged by how reasonable

717
00:58:05,920 --> 00:58:11,200
it sounded at the time it's judged by whether it was provable later transaction by transaction

718
00:58:11,200 --> 00:58:16,240
with inputs that existed at runtime so the platform needs two evidence tracks that never get to be

719
00:58:16,240 --> 00:58:22,960
best effort merchant status and location start with merchant status because the deemed supplier

720
00:58:22,960 --> 00:58:27,840
mechanism in the webinar hinges on whether the underlying supplier is obliged to pay vat or

721
00:58:27,840 --> 00:58:32,640
provides a vat number that means the platform must collect the vat number when it exists validate it

722
00:58:32,640 --> 00:58:38,000
when it matters and store the outcome as evidence not as profile decoration most platforms do this

723
00:58:38,000 --> 00:58:42,880
backwards they collect a vat number once during onboarding then treat it as a permanent truth

724
00:58:42,880 --> 00:58:47,600
that's how you end up charging or not charging vat based on stale data under a control plane model

725
00:58:47,600 --> 00:58:53,120
stale data is indistinguishable from negligence so the platform has to treat vat status as a life

726
00:58:53,120 --> 00:58:58,960
cycle state present missing invalid unverified verified date changed and it needs to bind that

727
00:58:58,960 --> 00:59:04,640
state to each transaction decision seller is vat registered isn't a global claim it's a claim at

728
00:59:04,640 --> 00:59:09,920
the moment of supply backed by whatever validation mechanism you used and if the seller won't provide a

729
00:59:09,920 --> 00:59:14,320
vat number the platform still can't shrug the platform must record that absence is part of the

730
00:59:14,320 --> 00:59:19,520
decision log asked not provided therefore deemed supply logic applied that distinction matters

731
00:59:19,520 --> 00:59:24,560
because audits don't argue about intent they argue about evidence now location location is where

732
00:59:24,560 --> 00:59:29,600
platforms lose control first because location data is messy multi-sourced and politically sensitive

733
00:59:29,600 --> 00:59:33,760
but vat rules don't care about sensitivity they care about place of supply logic and the ability

734
00:59:33,760 --> 00:59:38,320
to defend it and the practical problem is that a platform's where is often computed from weak

735
00:59:38,320 --> 00:59:44,720
signals billing address IP device region pickup location property address bank country

736
00:59:44,720 --> 00:59:48,720
and whatever the user typed at 2 a.m. so the platform has to decide which signals are

737
00:59:48,720 --> 00:59:53,200
authoritative for which transaction type and then capture the signals used for the decision not all

738
00:59:53,200 --> 00:59:58,480
signals the signals that matter for the determination if you can't state we used property address and

739
00:59:58,480 --> 01:00:03,200
booking dates for accommodation or we used pickup drop-off jurisdiction for passenger transport

740
01:00:03,200 --> 01:00:07,520
you're not determining tax you're guessing and once you're guessing you'll build inconsistent

741
01:00:07,520 --> 01:00:11,920
outcomes across refunds and chargebacks because the reversal process will grab a different

742
01:00:11,920 --> 01:00:16,480
signal than the original sale that's how you create drift the tax treatment changes because the

743
01:00:16,480 --> 01:00:21,200
data source changed not because the transaction changed so architecturally the platform needs a

744
01:00:21,200 --> 01:00:26,560
location evidence bundle per transaction the inputs used the resolved jurisdiction and the

745
01:00:26,560 --> 01:00:30,720
timestamp then when the transaction reverses the platform uses the same bundle to reverse tax

746
01:00:30,720 --> 01:00:37,440
consistently now auditability auditability is not we store logs auditability is can you reconstruct

747
01:00:37,440 --> 01:00:41,760
the decision and the payload without trusting any live system state that means the platform needs

748
01:00:41,760 --> 01:00:46,160
to retain the proofs and decisions linked to the transaction record the seller status used at the

749
01:00:46,160 --> 01:00:51,520
time including vat number if provided and validation result if performed the location evidence used

750
01:00:51,520 --> 01:00:56,000
to determine the treatment the decision outcome platform deemed supplier or not the invoicing

751
01:00:56,000 --> 01:01:01,280
representation if the platform issued invoices including identifiers the payout representation

752
01:01:01,280 --> 01:01:08,400
gross fees vat retained net payout linked to the same transaction identity and the correction

753
01:01:08,400 --> 01:01:14,080
trail when anything changes because anything will change a seller updates their vat number a

754
01:01:14,080 --> 01:01:19,200
booking gets cancelled a ride gets disputed a chargeback arrives three weeks later if your system

755
01:01:19,200 --> 01:01:22,800
can't maintain the chain of custody through those changes you'll spend your time arguing about

756
01:01:22,800 --> 01:01:27,120
which version was the real one it's never a fun argument so how does this map into a

757
01:01:27,120 --> 01:01:33,440
Microsoft ecosystem architecture without turning into a science project dynamics 365 finance is where

758
01:01:33,440 --> 01:01:38,640
the platforms accounting truth lands but the evidence can't live only in finance finance is not

759
01:01:38,640 --> 01:01:42,800
an evidence warehouse it's an accounting system if you force it to hold every proof artifact

760
01:01:42,800 --> 01:01:47,040
you'll create an un maintainable data model and still fail to answer audit questions quickly

761
01:01:47,040 --> 01:01:51,280
instead treat the evidence bundle as a governed record attached to the transaction in an evidence

762
01:01:51,280 --> 01:01:56,160
store with durable identifiers that finance can reference power platform becomes the control

763
01:01:56,160 --> 01:02:01,200
service for the evidence life cycle power apps can enforce seller onboarding fields and prevent

764
01:02:01,200 --> 01:02:06,960
half registered sellers from transacting power automate can route validation failures request missing

765
01:02:06,960 --> 01:02:11,600
vat numbers and block payouts when evidence requirements aren't met and power bi becomes the

766
01:02:11,600 --> 01:02:17,120
uncomfortable dashboard that shows where evidence quality is decaying how many sellers have unverified

767
01:02:17,120 --> 01:02:23,360
status how many transactions relied on weak location signals and how many reversals failed to match

768
01:02:23,360 --> 01:02:28,320
the original decision bundle the failure modes are predictable ambiguous seller roles create

769
01:02:28,320 --> 01:02:33,040
double taxation or non collection weak location proves create inconsistent treatment and

770
01:02:33,040 --> 01:02:38,640
unprovable decisions missing retention creates we can't reconstruct what happened which is just

771
01:02:38,640 --> 01:02:43,280
another way of saying we can't prove compliance so in pillar two evidence isn't paperwork it is

772
01:02:43,280 --> 01:02:48,960
the platform's ability to survive being the counterparty deemed supplier meets e invoicing

773
01:02:48,960 --> 01:02:54,640
drr reconciliation or collapse this is where pillar two stops being a platform tax discussion

774
01:02:54,640 --> 01:02:59,200
and collides with pillar one like a truck because once the platform becomes the deemed supplier it

775
01:02:59,200 --> 01:03:04,400
doesn't just collect vat it owns the regulated story the invoice the reporting the corrections

776
01:03:04,400 --> 01:03:09,840
and the proof and under vda those artifacts have to reconcile across systems that were never designed

777
01:03:09,840 --> 01:03:14,800
to agree at transaction speed deems a plier logic creates a new invoice issuer sometimes that

778
01:03:14,800 --> 01:03:19,600
issuer is the platform sometimes it's the underlying seller the problem is not choosing the problem is

779
01:03:19,600 --> 01:03:25,200
that your systems must behave consistently with that choice every time and at volume if the platform

780
01:03:25,200 --> 01:03:31,760
issues the invoice that invoice still has to align with e n 6931 semantics where the rule applies

781
01:03:31,760 --> 01:03:36,560
and it still has to feed digital reporting requirements on the deadlines your rail enforces

782
01:03:36,560 --> 01:03:41,120
that means your platform is now an e invoicing producer not just a marketplace and if you treat that

783
01:03:41,120 --> 01:03:46,160
as will generate an xml you're building a compliance facade that collapses the first time refunds

784
01:03:46,160 --> 01:03:51,200
and chargebacks hit the reason this is fragile is simple platforms don't run on invoices they

785
01:03:51,200 --> 01:03:56,640
run on events bookings rides cancellations adjustments fees payouts disputes partial refunds charge

786
01:03:56,640 --> 01:04:02,400
backs each of those events changes the economic reality and under a deemed supplier model each one

787
01:04:02,400 --> 01:04:09,360
can change the vat reality now add pillar one near real time reporting turns those changes into visible

788
01:04:09,360 --> 01:04:14,800
comparable deltas so the architectural question becomes brutally narrow can the platform reconcile

789
01:04:14,800 --> 01:04:20,400
three ledgers continuously the customer facing ledger what the buyer was charged including vat

790
01:04:20,400 --> 01:04:25,920
and what was refunded the seller facing ledger what the seller earned what fees were retained

791
01:04:25,920 --> 01:04:32,160
and what vat was withheld or remitted by the platform the tax facing ledger what was reported via d r r

792
01:04:32,160 --> 01:04:36,160
what acknowledgements were received what corrections were submitted and what is currently considered

793
01:04:36,160 --> 01:04:41,360
the truth by the authority rail if those three don't tie out the system doesn't just become messy

794
01:04:41,360 --> 01:04:45,920
it becomes undefendable and in a transaction control model undefendable becomes detectable quickly

795
01:04:45,920 --> 01:04:50,240
here's where most people mess up they build the deemed supplier logic as a pricing rule but leave

796
01:04:50,240 --> 01:04:55,680
invoicing and reporting as an afterthought so the platform charges vat post some accounting

797
01:04:55,680 --> 01:05:00,880
entries somewhere and then later tries to figure out reporting that is backwards underveda reporting

798
01:05:00,880 --> 01:05:05,600
is not downstream reporting is part of the transaction life cycle the fix is not complicated it is

799
01:05:05,600 --> 01:05:11,040
just unforgiving you need one transaction identity that survives the entire life cycle order

800
01:05:11,040 --> 01:05:17,520
or booking ID any invoice IDs generated any d rr message IDs any refund and correction IDs

801
01:05:17,520 --> 01:05:22,560
and the payout statement reference if you don't have stable identity reconciliation is manual forever

802
01:05:22,560 --> 01:05:27,520
then you need a state machine that spans both commerce and tax not just paid and refunded but

803
01:05:27,520 --> 01:05:35,120
invoiced reported acknowledged rejected corrected resubmitted those states aren't optional metadata

804
01:05:35,120 --> 01:05:40,160
they decide whether your vat collected equals vat reported and once those states diverge you are no

805
01:05:40,160 --> 01:05:45,280
longer managing vat you are managing variance now translate that into the Microsoft stack without

806
01:05:45,280 --> 01:05:51,040
pretending it's one product feature dynamic 365 finance remains the system of record for the

807
01:05:51,040 --> 01:05:56,800
accounting truth vat liability fees payables cash movements but the deemed supplier decision

808
01:05:56,800 --> 01:06:01,360
happens upstream in the platform transaction system and the evidentiary context must travel with

809
01:06:01,360 --> 01:06:07,280
it so finance needs transaction grade references not summarized journals that erase identity power

810
01:06:07,280 --> 01:06:12,080
platform becomes the orchestration and visibility layer that prevents collapse power automate should

811
01:06:12,080 --> 01:06:17,600
handle the moments where commerce events force tax events a cancellation triggers a credit note or

812
01:06:17,600 --> 01:06:23,600
correction a charge back triggers a reversal workflow a seller status change triggers validation and

813
01:06:23,600 --> 01:06:28,880
potentially a different deemed supplier outcome for future transactions and every one of those

814
01:06:28,880 --> 01:06:34,400
flows must attach evidence and linkages so you can prove the decision lineage later power bi is

815
01:06:34,400 --> 01:06:39,120
where you stop lying to yourself you need dashboards that answer what share of transactions are deemed

816
01:06:39,120 --> 01:06:44,720
supply what share successfully reported how many are stuck in exception states and where reconciliation

817
01:06:44,720 --> 01:06:50,720
gaps exist between platform ledger finance and drr acknowledgments if you can't see that daily you

818
01:06:50,720 --> 01:06:55,600
will discover it during an audit window which is the worst possible time to learn the system drifted

819
01:06:55,600 --> 01:06:59,680
and yes near real-time visibility makes mismatches immediately detectable that's the point

820
01:06:59,680 --> 01:07:04,960
wider reduces fraud by turning delay into observability the system will show you your inconsistencies

821
01:07:04,960 --> 01:07:09,520
faster than your organization can explain them so pillar two meeting pillar one gives you exactly

822
01:07:09,520 --> 01:07:14,800
two outcomes either you engineer reconciliation as a first class product stable identity deterministic

823
01:07:14,800 --> 01:07:19,600
states and evidence linked corrections or you operate a platform that can charge vat but can't

824
01:07:19,600 --> 01:07:24,480
prove why can't reconcile what happened and can't survive regulated reporting at speed that isn't

825
01:07:24,480 --> 01:07:29,840
a compliance risk that's a business model risk pillar three in one sentence fewer registrations

826
01:07:29,840 --> 01:07:34,400
stricter truth pillar three is where everyone relaxes because it sounds like simplification single

827
01:07:34,400 --> 01:07:40,320
vat registration os expansion fewer local vat numbers less admin and yes that's directionally true

828
01:07:40,320 --> 01:07:45,360
but it hides the trade the registration footprint shrinks while the truth requirements expand that is

829
01:07:45,360 --> 01:07:49,840
the bargain in the webinar research the one stop shop is framed as the mechanism that let's a

830
01:07:49,840 --> 01:07:55,600
business charge local vat in multiple member states but pay and report it through its home authority

831
01:07:55,600 --> 01:08:00,400
that reduces the need to register locally file locally and correspond locally enterprises love

832
01:08:00,400 --> 01:08:05,520
that story because local registrations are expensive and bureaucratic and they tend to multiply quietly

833
01:08:05,520 --> 01:08:12,320
over time but the system doesn't delete complexity it relocates it under an expanded os s model the tax

834
01:08:12,320 --> 01:08:17,920
authority still expects the correct vat to be charged per destination per category per rate the

835
01:08:17,920 --> 01:08:22,480
difference is that you're now aggregating and paying centrally so the compliance surface doesn't

836
01:08:22,480 --> 01:08:27,440
get smaller it gets more concentrated and concentration means two things better leverage when you get it

837
01:08:27,440 --> 01:08:32,000
right and faster failure when you don't the first foundational constraint from the research is the

838
01:08:32,000 --> 01:08:37,280
one most teams discover too late local input vat can't be deducted in the os s return the webinar says

839
01:08:37,280 --> 01:08:42,960
it directly output vat goes through os s local input vat comes back through a separate refund

840
01:08:42,960 --> 01:08:47,600
route with drag and timing cost that means os s is not just a reporting decision it's a treasury

841
01:08:47,600 --> 01:08:53,280
decision if you're incurring material input vat in a country warehousing local marketing returns

842
01:08:53,280 --> 01:08:58,720
handling events repairs then deregister everywhere can create a cash flow problem you didn't model

843
01:08:58,720 --> 01:09:04,400
so pillar three forces an enterprise to run an explicit strategy where do we stay locally registered

844
01:09:04,400 --> 01:09:09,760
because we need input vat efficiency and where do we accept os s plus refund friction because

845
01:09:09,760 --> 01:09:15,200
they admin savings outweigh the cash cost and the second constraint is even more uncomfortable

846
01:09:15,200 --> 01:09:20,480
os s simplifies filing not evidence you still need to prove what you sold where it was taxed

847
01:09:20,480 --> 01:09:24,640
why the rate applied and how you computed it the only difference is that the evidence pack

848
01:09:24,640 --> 01:09:29,840
now needs to support central aggregation this is where enterprises break systems they treat os s

849
01:09:29,840 --> 01:09:35,200
as one portal solves everything and then they discover their order systems don't store the location

850
01:09:35,200 --> 01:09:40,640
evidence consistently their tax engine changes rates mid period without traceability and their

851
01:09:40,640 --> 01:09:45,600
fx handling creates drift between what was charged what was settled and what was reported

852
01:09:46,240 --> 01:09:52,160
because under pillar three cross border truth becomes an accounting product destination rate

853
01:09:52,160 --> 01:09:58,400
taxable amount tax amount currency and timestamp all tied to a transaction identity you can audit

854
01:09:58,400 --> 01:10:03,360
so architecturally the key shift is registration footprint shrinks data completeness expands

855
01:10:03,360 --> 01:10:07,840
you can't rely on local accountants to make sense of it in each country anymore because you're

856
01:10:07,840 --> 01:10:12,640
explicitly centralizing that means your systems have to carry more of the burden classification

857
01:10:12,640 --> 01:10:17,600
place of supply logic exemptions customer status and the evidence that supports those decisions

858
01:10:17,600 --> 01:10:21,760
and this is where reverse charge expansion starts to matter because it's part of the same operating

859
01:10:21,760 --> 01:10:27,200
model in the webinar they describe reverse charge as a simplification non-established supplier

860
01:10:27,200 --> 01:10:32,960
invoices without vat customer accounts for vat and by 2028 it broadens to many scenarios when

861
01:10:32,960 --> 01:10:38,000
the supplier isn't established and the customer has a local vat number that reduces registrations

862
01:10:38,560 --> 01:10:43,920
great but it punishes sloppy customer classification if you can't reliably decide whether the

863
01:10:43,920 --> 01:10:49,040
customer is taxable has a valid vat number and meets the conditions you're invoicing flips between

864
01:10:49,040 --> 01:10:54,000
vat charged and reverse charge incorrectly under transaction level controls and cross validation

865
01:10:54,000 --> 01:10:59,040
those errors don't hide they surface as disputes mismatches and correction traffic so pillar three

866
01:10:59,040 --> 01:11:05,200
isn't less work it's different work it turns vat into a centralized data discipline problem now map

867
01:11:05,200 --> 01:11:11,120
that to the Microsoft ecosystem without pretending you can configure your way out of it dynamics 365

868
01:11:11,120 --> 01:11:17,840
finance remains the accounting truth liabilities postings and the ledger logic that must reconcile

869
01:11:17,840 --> 01:11:22,160
but finance can't invent evidence it didn't receive if your commerce and billing systems don't

870
01:11:22,160 --> 01:11:27,200
attach destination and status data to each transaction finance will beautifully post the wrong

871
01:11:27,200 --> 01:11:32,160
truth consistently power platform becomes the way you operationalize the stricter truth power

872
01:11:32,160 --> 01:11:38,320
automate routes the exceptions that pillar three creates missing evidence invalid vat IDs ambiguous

873
01:11:38,320 --> 01:11:44,640
customer status rate disputes and refund adjustments that need to land correctly in the oss aggregation

874
01:11:44,640 --> 01:11:50,560
model power bi becomes your visibility layer liability by member state variance between expected

875
01:11:50,560 --> 01:11:55,760
and collected vat and days to close for the vat period as a measurable indicator of architectural

876
01:11:55,760 --> 01:12:01,280
health fewer registrations is real but it comes with stricter truth because you can't decentralize

877
01:12:01,280 --> 01:12:06,240
ambiguity and still centralize reporting and that sets up the next workflow checkout tax to oss

878
01:12:06,240 --> 01:12:11,840
ios return preview with evidence and fx discipline that actually ties out workflow to overview check

879
01:12:11,840 --> 01:12:18,400
out tax oss ios s return preview that ties out workflow two is the one executives love to talk about

880
01:12:18,400 --> 01:12:23,520
an architect's quietly fear the moment your checkout calculates vat you're already committing

881
01:12:23,520 --> 01:12:28,800
yourself to a future filing position under pillar three that filing position often routes through oss

882
01:12:28,800 --> 01:12:33,920
or oss which sounds like simplification until you realize the only way it works is if your transaction

883
01:12:33,920 --> 01:12:39,680
data can be aggregated defended and reconciled without improvisation so the workflow starts at the

884
01:12:39,680 --> 01:12:45,200
only place that matters order time tax determination at checkout can't be an afterthought anymore because

885
01:12:45,200 --> 01:12:50,160
the numbers that hit the customer's screen become the numbers you later report and pay if you

886
01:12:50,160 --> 01:12:55,440
true it up later you've created a drift engine the customer paid one truth your ledger posted a

887
01:12:55,440 --> 01:13:00,800
second truth and your oss return tries to explain a third that's not compliance that's arithmetic

888
01:13:00,800 --> 01:13:08,640
theater the pipeline you want is deterministic calculate capture evidence lock critical rates

889
01:13:08,640 --> 01:13:14,720
and persist the decision first calculate the tax based on destination taxability and exemptions

890
01:13:14,720 --> 01:13:18,880
pillar three doesn't remove the need to know the correct member state treatment it just changes

891
01:13:18,880 --> 01:13:23,680
where you reported so you need a consistent way to derive destination including whatever evidence

892
01:13:23,680 --> 01:13:28,800
your business uses to justify that destination the reason this works is brutal if you can't prove

893
01:13:28,800 --> 01:13:35,040
why you treated a sale as taxable in a specific member state at a specific rate oss simply centralizes

894
01:13:35,040 --> 01:13:41,200
your inability to explain yourself second capture evidence as part of the order record not as a side

895
01:13:41,200 --> 01:13:47,040
attachment at minimum you need the customer's status signal that drove the logic the location

896
01:13:47,040 --> 01:13:53,920
signal that drove destination and a timestamp if b2b is in play the customer's vat id status becomes

897
01:13:53,920 --> 01:13:58,720
part of the decision context not because it's nice to have but because reverse charge and vat

898
01:13:58,720 --> 01:14:03,440
charging decisions depend on it and the wrong choice creates mismatches the other side can detect

899
01:14:03,440 --> 01:14:08,560
third fx discipline if you sell cross-border you will deal with currency conversion and you will

900
01:14:08,560 --> 01:14:14,960
deal with it multiple times at authorization at capture at settlement and at reporting if you let

901
01:14:14,960 --> 01:14:19,520
each system choose its own rate at its own time you'll create irreconcilable pennies that turn into

902
01:14:19,520 --> 01:14:25,440
unreconscilable totals so the workflow needs an explicit reporting fx decision which rate source you

903
01:14:25,440 --> 01:14:31,440
used for vat reporting purposes and which timestamp anchored it lock it in the transaction context

904
01:14:31,440 --> 01:14:35,920
and do not let it drift just because the payment process are settled later at a different rate now

905
01:14:35,920 --> 01:14:39,920
you have a transaction record that actually means something from there you build a return preview

906
01:14:39,920 --> 01:14:44,640
which is where most organizations find out they never had a data model just a set of screens and oss

907
01:14:44,640 --> 01:14:49,680
ios s preview is not the final filing and it's not a quarterly surprise it's an aggregation view

908
01:14:49,680 --> 01:14:55,600
that should be producible on demand by member state by vat rate by category and by reporting period

909
01:14:55,600 --> 01:15:00,800
tied back to underlying transaction IDs if you can't drill from a return line to the list of orders

910
01:15:00,800 --> 01:15:04,640
that created it you don't have a preview you have an estimate and the preview must surface

911
01:15:04,640 --> 01:15:10,240
exceptions not hide them missing location evidence unresolved customer status orders with ambiguous

912
01:15:10,240 --> 01:15:15,840
tax ability rate changes applied inconsistently refunds posted without linked reversal of vat

913
01:15:15,840 --> 01:15:21,040
these should light up as an exception q because a preview that looks clean by suppressing bad data

914
01:15:21,040 --> 01:15:25,920
is how you end up filing wrong with confidence now map this to the Microsoft stack dynamics

915
01:15:25,920 --> 01:15:31,600
365 finance owns the accounting truth so the postings that represent output vat by jurisdiction

916
01:15:31,600 --> 01:15:36,240
need to reconcile back to the checkout decision record power platform is where you make that practical

917
01:15:36,800 --> 01:15:42,240
power automate routes evidence gaps and classification failures to the right owners before period end

918
01:15:42,240 --> 01:15:47,920
and power bi gives you the operational view liabilities by member state exception aging and variants

919
01:15:47,920 --> 01:15:54,400
between expected vat from checkout and posted vat in finance this is the payoff executives get

920
01:15:54,400 --> 01:16:00,880
sell everywhere file once but only because you engineered calculate once prove always reverse charge

921
01:16:00,880 --> 01:16:05,760
expansion simplification that punishes sloppy customer classification reverse charge sounds like

922
01:16:05,760 --> 01:16:10,960
mercy it is not its simplification for the state and administrative relief for the supplier but only

923
01:16:10,960 --> 01:16:16,400
if the enterprise can classify customers and establishments correctly every time at transaction speed

924
01:16:16,400 --> 01:16:21,520
the webinar research describes the basic mechanism the non-established supplier invoices without

925
01:16:21,520 --> 01:16:27,200
vat and the customer accounts for the vat in their own return that reduces the need for local vat

926
01:16:27,200 --> 01:16:32,880
registrations it also moves the failure point upstream into customer data and establishment logic

927
01:16:32,880 --> 01:16:38,480
where most organizations are structurally undisciplined this is the foundational mistake teams treat

928
01:16:38,480 --> 01:16:43,200
reverse charge eligible like a tax code you can toggle in reality it's a decision outcome derived

929
01:16:43,200 --> 01:16:48,160
from facts where the supplier is established for vat purposes where the supply takes place

930
01:16:48,160 --> 01:16:53,120
what the customer is and whether the customer has a local vat number that meets the conditions

931
01:16:53,120 --> 01:16:57,760
when those facts are wrong reverse charge becomes a liability misallocation engine

932
01:16:57,760 --> 01:17:02,560
and under veda's direction of travel more transaction level reporting and faster visibility

933
01:17:02,560 --> 01:17:07,520
misallocations don't sit quietly until year end they surface as mismatches the research also points

934
01:17:07,520 --> 01:17:12,880
to timeline pressure the reverse charge expansion is phased with broader expansion by 2028 in the

935
01:17:12,880 --> 01:17:18,160
webinar discussion the exact date matters less than the architectural consequence you can't

936
01:17:18,160 --> 01:17:23,360
bolt this on later because the data you need has to exist before the first invoice is created

937
01:17:23,360 --> 01:17:28,160
retroactively fixing customer classification after invoices go out is how you manufacture correction

938
01:17:28,160 --> 01:17:33,520
traffic so what actually breaks customer vat id status is the obvious one and you already heard why

939
01:17:33,520 --> 01:17:38,400
vat id validation is evidence not decoration but reverse charge adds a sharper edge it's not

940
01:17:38,400 --> 01:17:43,600
enough that a vat id exists it has to be the right vat id for the customer in the relevant member

941
01:17:43,600 --> 01:17:49,040
state and it has to be valid at the time of supply if you store a vat number in dynamics and call it

942
01:17:49,040 --> 01:17:54,080
done you'll eventually reverse charge the wrong customer or charge vat when you shouldn't

943
01:17:54,080 --> 01:17:59,600
and the purchaser side reporting will not match your story then there's establishment logic the webinar

944
01:17:59,600 --> 01:18:03,680
frames the reverse charge scenario around a supplier that is not established in a customer that

945
01:18:03,680 --> 01:18:08,960
has a local vat number that sounds simple until the enterprise has branches local warehouses

946
01:18:08,960 --> 01:18:15,040
service teams or other footprints that people casually refer to as just operations for vat those

947
01:18:15,040 --> 01:18:20,640
footprints can matter if the business behaves as established for vat purposes in a jurisdiction the

948
01:18:20,640 --> 01:18:25,200
reverse charge assumption can collapse and if your ERP doesn't have a governed way to represent

949
01:18:25,200 --> 01:18:30,160
establishment flags and their effect on invoicing you will encode the wrong policy this is the part

950
01:18:30,160 --> 01:18:36,240
nobody enjoys reverse charge requires a deterministic customer classification model not a free

951
01:18:36,240 --> 01:18:42,080
text field not b2b b2c as a marketing concept a model that answers for each transaction is the

952
01:18:42,080 --> 01:18:47,920
customer a taxable person which vat number is in scope what validations were performed and what

953
01:18:47,920 --> 01:18:53,840
rule path produce the invoicing outcome in Microsoft terms the risk pattern is predictable dynamics

954
01:18:53,840 --> 01:18:58,560
365 finance will happily post an invoice with a reverse charge tax code if you tell it to that

955
01:18:58,560 --> 01:19:02,880
does not mean the decision was correct it just means the ledger now contains a formal looking mistake

956
01:19:02,880 --> 01:19:07,840
so you need to enforce the decision before posting not after that means the customer record has to

957
01:19:07,840 --> 01:19:14,640
carry controlled attributes that feed tax determination vat registration status vat numbers

958
01:19:14,640 --> 01:19:19,600
with jurisdiction context and whatever flags your tax policy requires and the transaction has to

959
01:19:19,600 --> 01:19:24,160
capture the specific classification used at that moment because customer master data changes

960
01:19:24,160 --> 01:19:29,280
over time if you only keep current state you lose the ability to prove why you treated an invoice

961
01:19:29,280 --> 01:19:34,240
a certain way six months ago now here's where most people mess up operationally they let sales create

962
01:19:34,240 --> 01:19:38,720
customers sales will create customers because the business wants revenue and revenue doesn't wait

963
01:19:38,720 --> 01:19:43,040
for tax hygiene under reverse charge expansion that becomes a structural conflict so you don't

964
01:19:43,040 --> 01:19:48,240
solve it with training you solve it with gates power automate is the obvious gatekeeper here when a

965
01:19:48,240 --> 01:19:53,680
customer is created or modified rooted through validation steps require the vat number in the right

966
01:19:53,680 --> 01:19:59,120
format when the scenario demands it run the validation and store the result if the customer is missing

967
01:19:59,120 --> 01:20:04,240
the minimum classification you don't let invoicing proceed on reverse charge eligible flows you

968
01:20:04,240 --> 01:20:09,280
force the organization to finish on boarding and power bi becomes the compliance radar how many

969
01:20:09,280 --> 01:20:15,040
invoices used reverse charge how many lacked a validated vat number at the time of invoicing how many

970
01:20:15,040 --> 01:20:20,560
required correction and which business units generate the most classification exceptions reverse

971
01:20:20,560 --> 01:20:25,840
charge reduces registrations fine but it punishes sloppy customer classification because the system

972
01:20:25,840 --> 01:20:30,480
can only be simplified when the facts are enforced if you don't enforce them you're not simplifying

973
01:20:30,480 --> 01:20:36,000
anything you're just moving the failure earlier and making it visible faster own goods transfers

974
01:20:36,000 --> 01:20:41,120
and inventory the registration pain shifts into reporting discipline reverse charge expansion

975
01:20:41,120 --> 01:20:46,480
punishes sloppy customer classification own goods transfers punish sloppy inventory truth because

976
01:20:46,480 --> 01:20:50,880
once pillar three expands oss and reduces the need for local vat registrations the old pain

977
01:20:50,880 --> 01:20:56,320
doesn't disappear it migrates instead of you must register because stock exists in country the

978
01:20:56,320 --> 01:21:01,440
system moves toward you must report the movement cleanly with identifiers and reconciled later

979
01:21:02,000 --> 01:21:06,960
the webinar research frames the direction transfers of own goods get pulled into the one stop shop logic

980
01:21:06,960 --> 01:21:11,440
and the speakers even call out that consignment stock simplifications become unnecessary if stock

981
01:21:11,440 --> 01:21:16,960
movements can be reported via oss in future that sounds like relief it is but it's the kind of

982
01:21:16,960 --> 01:21:22,000
relief that comes with a new control surface inventory events become tax events most enterprises

983
01:21:22,000 --> 01:21:27,600
have never treated inventory movements as regulated facts they treat them as operational noise

984
01:21:27,600 --> 01:21:33,680
picks packs transfers adjustments cycle counts reclassifications scrapping returns to vendor

985
01:21:33,680 --> 01:21:38,640
crosstalk movements and the occasional we fix the location code warehouses survive on local

986
01:21:38,640 --> 01:21:43,760
pragmatism ERP survive on delayed reconciliation the business survives because month end absorbs

987
01:21:43,760 --> 01:21:49,200
the inconsistencies vdare removes the hiding place again if your vat position depends on where stock is

988
01:21:49,200 --> 01:21:54,160
when it moved and what it became then inventory is no longer just supply chain it's part of the vat

989
01:21:54,160 --> 01:21:59,760
reporting model and here's the foundational misunderstanding teams assume own goods transfers are rare

990
01:21:59,760 --> 01:22:05,200
they are not any business with EU warehousing multi-country fulfillment repair loops returns hubs

991
01:22:05,200 --> 01:22:09,360
or redistribution channels generates these movements continuously they just don't label them as

992
01:22:09,360 --> 01:22:14,080
tax events today because the registration model forced them to solve it with local vat numbers

993
01:22:14,080 --> 01:22:19,440
and local compliance processes once registration friction reduces reporting discipline becomes the

994
01:22:19,440 --> 01:22:24,800
gate so what does reporting discipline mean in architectural terms first you need event integrity

995
01:22:24,800 --> 01:22:30,720
every stock movement that matters for vat must have a stable unique identity movement id date

996
01:22:30,720 --> 01:22:35,920
watch time from location to location sqe-u quantity and valuation context if you can't uniquely

997
01:22:35,920 --> 01:22:40,320
identify the movement you can't prove it happened once you can't prevent duplicates in reporting

998
01:22:40,320 --> 01:22:45,840
and you can't link corrections later and yes duplicates happen warehouses retry integrations

999
01:22:45,840 --> 01:22:51,760
interfaces replay people repost systems lag and then catch up if you don't design identity into the

1000
01:22:51,760 --> 01:22:56,080
movement reporting pipeline you'll manufacture phantom transfers that look like taxable behavior

1001
01:22:56,080 --> 01:23:00,560
second you need classification integrity not every movement is equal summer internal relocations

1002
01:23:00,560 --> 01:23:06,000
within a country some are cross-border transfers summer returns that unwind previous sales summer

1003
01:23:06,000 --> 01:23:10,880
repairs that change the nature of the goods summer write offs that should never appear as a transfer

1004
01:23:10,880 --> 01:23:15,520
but will if your process model uses the same transaction type for convenience convenience is the

1005
01:23:15,520 --> 01:23:21,120
enemy here because once you centralize reporting through oss the system expects you to know what the

1006
01:23:21,120 --> 01:23:26,080
movement is not just that something moved third you need reconciliation integrity inventory

1007
01:23:26,080 --> 01:23:31,280
movements must tie into your sales flows your invoicing flows and your cash flows not because it's

1008
01:23:31,280 --> 01:23:35,920
aesthetically pleasing but because authorities don't accept the warehouse did its thing they ask

1009
01:23:35,920 --> 01:23:40,480
why goods appeared in one member state whether they were subsequently sold there and how that aligns

1010
01:23:40,480 --> 01:23:46,240
with reported vat this is where enterprises fall apart inventory and finance operate as parallel

1011
01:23:46,240 --> 01:23:51,600
realities warehouse truth says stock moved finance truth says nothing changed until a sale happened

1012
01:23:51,600 --> 01:23:55,840
tax truth eventually tries to reconcile those with local registrations and spreadsheets under pillar

1013
01:23:55,840 --> 01:24:00,080
three you're building a central model therefore you can't afford parallel realities now map

1014
01:24:00,080 --> 01:24:05,520
this back to the Microsoft stack dynamics 365 finance is often where the financial side of inventory

1015
01:24:05,520 --> 01:24:10,560
lives but the operational truth frequently lives in warehouse management processes and integrations

1016
01:24:10,560 --> 01:24:16,240
that finance sees late summarized or sanitized that's survivable under periodic compliance it is

1017
01:24:16,240 --> 01:24:21,040
not survivable under transaction grade reporting so you need a pipeline where inventory events

1018
01:24:21,040 --> 01:24:26,080
can be consumed as first class inputs to tax reporting with the same design laws as invoices

1019
01:24:26,080 --> 01:24:31,040
canonical representation stable identifiers and a correction trail power platform helps here but only

1020
01:24:31,040 --> 01:24:35,920
if you use it for governance not for duct tape power automate can root inventory exceptions

1021
01:24:35,920 --> 01:24:40,720
missing movement fields invalid location codes cross border transfers without required references

1022
01:24:40,720 --> 01:24:45,600
or movements posted outside expected timelines it can enforce that remediation happens at the

1023
01:24:45,600 --> 01:24:50,800
source not by editing downstream payloads and it can ensure every correction is logged with actor

1024
01:24:50,800 --> 01:24:55,040
reason and linkage to the original movement identity power be eyes where you stop pretending

1025
01:24:55,040 --> 01:24:59,680
inventory is someone else's problem you want dashboards that show cross border movement volume

1026
01:24:59,680 --> 01:25:04,640
by lane unmatched movements that don't tie to sales or fulfillment correction rates and aging on

1027
01:25:04,640 --> 01:25:09,600
movement exceptions if those metrics spike your registration savings are quietly converting into

1028
01:25:09,600 --> 01:25:15,120
reporting risk so yes pillar three can reduce local registrations driven by stock but the trade is

1029
01:25:15,120 --> 01:25:20,080
absolute warehouse moves become reportable facts and facts require discipline if you can't run

1030
01:25:20,080 --> 01:25:25,120
inventory like a reliable event stream you don't get simplification you get a new category of

1031
01:25:25,120 --> 01:25:31,440
exception debt and it will be louder than the old one cash flow and vat os reduces admin

1032
01:25:31,440 --> 01:25:37,200
not treasury risk pillar three sells a simple story fewer vat registrations fewer local filings one

1033
01:25:37,200 --> 01:25:41,920
reporting channel that stories true it's also incomplete because vat isn't just compliance vat is

1034
01:25:41,920 --> 01:25:46,320
cash and cash doesn't care that your filing process got cleaner the webinar research states the

1035
01:25:46,320 --> 01:25:52,320
constraint most finance teams learn the hard way local input vat can't be deducted in the oss

1036
01:25:52,320 --> 01:25:58,560
return output vat goes through the oss mechanism but input vat recovery stays on a refund route

1037
01:25:58,560 --> 01:26:03,440
separate process separate timing separate risk so oss reduces admin but it does not reduce

1038
01:26:03,440 --> 01:26:08,320
treasury exposure it often increases it because you've centralized the output liabilities

1039
01:26:08,320 --> 01:26:12,800
while leaving the input recovery fragmented and slower this is the part that breaks budgets

1040
01:26:12,800 --> 01:26:17,040
enterprises model vda as a compliance program then discover a working capital program showed up

1041
01:26:17,040 --> 01:26:22,160
instead when you can't net input vat against output vat in the same return you create a timing

1042
01:26:22,160 --> 01:26:27,200
gap that gap becomes a cash float you have to fund and if you operate at scale across multiple

1043
01:26:27,200 --> 01:26:31,120
member states that float becomes material whether you like it or not so the decision point

1044
01:26:31,120 --> 01:26:36,000
becomes uncomfortable and very practical do you keep some local vat registrations even if you

1045
01:26:36,000 --> 01:26:41,440
could move transactions into oss because can and should diverge the moment input vat matters if you

1046
01:26:41,440 --> 01:26:46,880
have meaningful local costs warehousing returns processing marketing subcontractors repairs fuel

1047
01:26:46,880 --> 01:26:51,920
property costs then reclaim timing becomes treasury risk yes a refund route exists but it

1048
01:26:51,920 --> 01:26:57,280
introduces drag and drag becomes exposure the system behaves like this compliance simplification pushes

1049
01:26:57,280 --> 01:27:03,040
you toward oss but cash efficiency sometimes pulls you back toward local registration that isn't in

1050
01:27:03,040 --> 01:27:08,320
decision that is architecture meeting finance reality now here's the trap most organizations fall

1051
01:27:08,320 --> 01:27:13,520
into they treat cash flow as a reporting output they wait until month end and ask what's our vat

1052
01:27:13,520 --> 01:27:18,160
payable under vda that question is too late because transaction level compliance drives earlier

1053
01:27:18,160 --> 01:27:22,560
visibility and earlier accountability if you can see liabilities building daily then leadership

1054
01:27:22,560 --> 01:27:27,120
will expect you to forecast them daily and if your systems can't produce a reliable forecast

1055
01:27:27,120 --> 01:27:31,760
finance will build one in spreadsheets spreadsheets become the shadow treasury system shadow systems

1056
01:27:31,760 --> 01:27:36,640
become ungoverned ungoverned becomes audit pain so you need treasury forecasting as part of the vat

1057
01:27:36,640 --> 01:27:41,920
pipeline not as a separate finance ritual what does that mean in practice first forecast liabilities

1058
01:27:41,920 --> 01:27:46,480
by member state not as one blended number oss centralizes filing but it doesn't change that

1059
01:27:46,480 --> 01:27:50,960
the liability is still due across jurisdictions you need to know whether vat is accumulating

1060
01:27:50,960 --> 01:27:55,680
what rate mixes driving it and what timing profile it follows otherwise you can't plan cash

1061
01:27:55,680 --> 01:28:00,560
and you can't explain variance when the payable spikes second model timing not just totals

1062
01:28:00,560 --> 01:28:06,800
vat exposure isn't just how much it's when under an oss regime your payment timing might be

1063
01:28:06,800 --> 01:28:12,000
predictable but your cash collection timing is not especially when sales channels psp settlement

1064
01:28:12,000 --> 01:28:17,840
delays refunds and chargebacks distort the cash curve if you don't model timing you'll treat vat

1065
01:28:17,840 --> 01:28:22,240
like profit and spend it that mistake never dies it just gets a new policy memo every year third

1066
01:28:22,240 --> 01:28:27,280
include fx exposure explicitly workflow number two already forced effects discipline at transaction

1067
01:28:27,280 --> 01:28:32,480
time treasury needs the same discipline at forecast time if you forecast vat using one rate basis but

1068
01:28:32,480 --> 01:28:38,000
settle using another your liability moves without any underlying business change that creates executive

1069
01:28:38,000 --> 01:28:42,960
confusion and executives respond to confusion with governance theater better to run the numbers

1070
01:28:42,960 --> 01:28:47,680
on purpose than to explain why they drifted now translate this to Microsoft systems because this

1071
01:28:47,680 --> 01:28:54,080
is where the architecture either reinforces truth or manufactures illusions dynamic 365 finance

1072
01:28:54,080 --> 01:28:59,360
holds the ledger truth vat liability accounts receivables settlements and cash but finance only knows

1073
01:28:59,360 --> 01:29:04,080
what was posted it doesn't automatically know what's expected based on order flow and it doesn't

1074
01:29:04,080 --> 01:29:10,240
automatically know what input vat recovery timing looks like across refund routes so you need a vat

1075
01:29:10,240 --> 01:29:14,480
cash view that ties three things together what was collected at checkout or invoicing what was

1076
01:29:14,480 --> 01:29:19,200
posted as liability in finance what was actually paid or recovered and when power bi is the obvious

1077
01:29:19,200 --> 01:29:25,360
cockpit here not for pretty charts for operational truth vat collected versus vat reported versus vat

1078
01:29:25,360 --> 01:29:30,320
remitted forecasted payable by period exposure by member state and currency variance explanations

1079
01:29:30,320 --> 01:29:35,120
driven by refunds chargebacks and effects changes and one executive kpi that matters more than anyone

1080
01:29:35,120 --> 01:29:40,960
admits days to close the vat period if that number grows your pipeline is decaying power automate is

1081
01:29:40,960 --> 01:29:45,760
the enforcement layer that keeps treasury from inheriting chaos when refund volumes spike

1082
01:29:45,760 --> 01:29:50,640
automate can force tax reversal workflows to complete before payouts release when refund claims

1083
01:29:50,640 --> 01:29:56,000
for input vat stall automate can raise aging alerts and require evidence pack completeness when a

1084
01:29:56,000 --> 01:30:01,040
business unit starts creating off ledger adjustments automate can root it into a controlled correction

1085
01:30:01,040 --> 01:30:07,360
path instead of letting it leak into will reconcile it later oss reduces admin fine but it does

1086
01:30:07,360 --> 01:30:12,800
not reduce treasury risk it exposes it and once vat becomes observable daily cash risk becomes

1087
01:30:12,800 --> 01:30:16,960
observable daily to whether you engineered for that reality or just hoped it would stay invisible

1088
01:30:16,960 --> 01:30:23,760
workflow three overview psp settlement checkout dr bank here's the workflow that exposes whether

1089
01:30:23,760 --> 01:30:28,800
you actually run a controlled vat pipeline or whether you just post accounting entries and hope

1090
01:30:28,800 --> 01:30:34,480
reconciliation sorts itself out psp settlement because payment service providers don't settle like your

1091
01:30:34,480 --> 01:30:39,760
ERP thinks they do they settle net they batch they deduct fees they hold reserves they replay charge

1092
01:30:39,760 --> 01:30:45,040
backs weeks later and they do all of that while your tax reporting story is trying to be transaction

1093
01:30:45,040 --> 01:30:49,920
perfect so workflow number three is the three way sometimes four way reconciliation loop checkout says

1094
01:30:49,920 --> 01:30:54,800
what you charged dr says what you reported the psp says what you actually received the bank says

1095
01:30:54,800 --> 01:31:00,560
what cash really landed if those don't align your vat payable number becomes a belief system and

1096
01:31:00,560 --> 01:31:05,520
under vda belief systems get audited start with the common failure mode the business trusts the

1097
01:31:05,520 --> 01:31:11,440
order system more than the cash system the order system says 120 collected 20 body vat but the

1098
01:31:11,440 --> 01:31:18,560
psp settles 114.37 because it deducted fees converted currency netted refunds and included transactions

1099
01:31:18,560 --> 01:31:23,600
from other days in the same payout finance then post the payout as revenue and clears receivables

1100
01:31:23,600 --> 01:31:28,000
and vat sits in the ledger like it's clean it isn't the system did not collect what you think it

1101
01:31:28,000 --> 01:31:33,840
collected and if vat is included in that gross the difference isn't just a variance it's a question

1102
01:31:33,840 --> 01:31:38,720
where did the vat go so the objective of workflow number three is narrow and brutal prove the tax

1103
01:31:38,720 --> 01:31:44,320
collected equals tax reported equals tax remitted not conceptually practically with evidence

1104
01:31:44,320 --> 01:31:49,360
that means you need a canonical settlement model one that can represent the psp payout as a structured

1105
01:31:49,360 --> 01:31:55,440
object payout id payout date currency gross amounts fees adjustments refunds chargebacks reserves

1106
01:31:55,440 --> 01:31:59,920
and net amount then you need to map that payout object back to the underlying transactions at checkout

1107
01:31:59,920 --> 01:32:04,080
level this is where most people mess up they try to reconcile at the journal level one payout

1108
01:32:04,080 --> 01:32:08,640
journal to one bank statement line that's not reconciliation that's matching two summaries

1109
01:32:08,640 --> 01:32:14,000
and calling it done under vda summaries are where fraud and errors hide which is why the system is

1110
01:32:14,000 --> 01:32:18,480
shifting toward transaction visibility in the first place so you reconcile a transaction lineage

1111
01:32:18,480 --> 01:32:24,640
checkout transaction id payment intent charge id psp payout line bank statement line if you can't

1112
01:32:24,640 --> 01:32:28,720
traverse that chain you can't explain variances and if you can't explain variances you can't

1113
01:32:28,720 --> 01:32:34,720
prove your vat position now add drr to the loop drr is not cash aware drr is invoice aware

1114
01:32:34,720 --> 01:32:39,200
it knows what was invoiced and reported and it can acknowledge or reject but it doesn't know

1115
01:32:39,200 --> 01:32:44,400
that the psp withheld a portion or that a charge back landed later so your architecture needs to link

1116
01:32:44,400 --> 01:32:49,840
drr identifiers to the same transaction identity used in payments so that when cash devates from

1117
01:32:49,840 --> 01:32:54,160
expectation you can determine whether the tax story needs a correction event that's the hidden

1118
01:32:54,160 --> 01:32:59,120
pressure payment events create tax correction obligations refunds and chargebacks aren't just

1119
01:32:59,120 --> 01:33:04,160
revenue reversals they are vat reversals when vat was collected if your payment pipeline can process

1120
01:33:04,160 --> 01:33:08,080
refunds without triggering the tax correction trail you've built a drift machine that leaks

1121
01:33:08,080 --> 01:33:14,400
vat truth slowly then forces a painful cleanup later so here's the vat wallet discipline treat vat

1122
01:33:14,400 --> 01:33:18,400
as ring fence cash in your ledger and treasury view not because the bank account is physically

1123
01:33:18,400 --> 01:33:23,280
separate but because the system must behave as if it is every day you should be able to say this is

1124
01:33:23,280 --> 01:33:28,400
v8 collected this is v8 refunded this is vat still held and this is vat due to be remitted if

1125
01:33:28,400 --> 01:33:32,880
you can't compute that daily you will eventually spend vat cash on operating cash then filing day

1126
01:33:32,880 --> 01:33:38,400
becomes a funding event auditors love that story in Microsoft terms dynamics 365 finance holds the

1127
01:33:38,400 --> 01:33:43,120
accounting truth but it needs transaction great references to do it your settlement import can't

1128
01:33:43,120 --> 01:33:48,000
be a blob it needs structured payout lines tied back to orders and invoices power automate is what

1129
01:33:48,000 --> 01:33:54,640
roots the ugly cases unmatched payout lines missing payment IDs refunds without linked credit notes

1130
01:33:54,640 --> 01:34:00,560
chargebacks without correction trails and power be i is how you see whether the machine is healthy

1131
01:34:00,560 --> 01:34:06,960
reconciliation completeness unmatched aging variances by psp and country and the delta between

1132
01:34:06,960 --> 01:34:11,920
vat expected from checkout and vat realized from settlements this is the difference between

1133
01:34:11,920 --> 01:34:16,640
compliance as paperwork and compliance as a system one hides drift until month and the other

1134
01:34:16,640 --> 01:34:20,400
makes drift visible daily so you can kill it before it becomes policy

1135
01:34:20,400 --> 01:34:27,040
Microsoft architecture positioning record orchestration insight at this point people usually

1136
01:34:27,040 --> 01:34:32,320
ask the wrong question which Microsoft product does veda none of them do because veda isn't an app

1137
01:34:32,320 --> 01:34:36,960
it's a control plane expectation imposed on your transaction pipeline Microsoft gives you components

1138
01:34:36,960 --> 01:34:42,080
you still have to build the machine that behaves deterministically when regulators stop tolerating

1139
01:34:42,080 --> 01:34:47,360
drift so the positioning has to be explicit or you end up with architecture by accident dynamics post

1140
01:34:47,360 --> 01:34:51,920
something power automate patches something power be i report something and nobody can explain why

1141
01:34:51,920 --> 01:34:57,280
the numbers don't tie here's the framing that holds up under audit pressure record orchestration

1142
01:34:57,280 --> 01:35:03,680
inside and each role has hard boundaries dynamics 365 finance is the system of record that means

1143
01:35:03,680 --> 01:35:08,800
it owns the accounting truth posted invoices tax calculation outcomes that you stand behind

1144
01:35:08,800 --> 01:35:14,080
sub ledger detail and the final liability numbers you'll reconcile to filing in payment finance

1145
01:35:14,080 --> 01:35:19,520
is where you stop debating and start committing once the transaction posts it becomes your official

1146
01:35:19,520 --> 01:35:23,760
position if that position is wrong the correction trail needs to be deliberate linked and

1147
01:35:23,760 --> 01:35:28,880
explainable so you don't use finance as a scratch pad for will fix it later under veda later is

1148
01:35:28,880 --> 01:35:33,280
detectable and month and cleanup becomes an anti pattern but finance also shouldn't be forced to

1149
01:35:33,280 --> 01:35:38,320
become your integration hub or your evidence archive if you stuff every payload acknowledgement

1150
01:35:38,320 --> 01:35:44,080
validation response and proof artifact into ERP tables you'll create a data model that nobody can

1151
01:35:44,080 --> 01:35:49,600
govern and a performance problem you'll call complexity it isn't complexity it's a design omission

1152
01:35:49,600 --> 01:35:55,040
finance records the commercial and tax truth it references evidence by stable identifiers it

1153
01:35:55,040 --> 01:35:59,440
doesn't try to be the evidence warehouse power platform is the orchestration layer and no that

1154
01:35:59,440 --> 01:36:04,080
doesn't mean automation for convenience it means controlled exception handling routing

1155
01:36:04,080 --> 01:36:09,520
gating and state management where the business process intersects with compliance deadlines power

1156
01:36:09,520 --> 01:36:14,880
automate is where you turn policy into enforcement without rewriting your ERP when an e invoice gets

1157
01:36:14,880 --> 01:36:20,000
rejected by a rail automate routes the exception to the owner captures the reason code triggers

1158
01:36:20,000 --> 01:36:25,200
remediation tasks and controls resubmission so you don't spray duplicates when a supplier on

1159
01:36:25,200 --> 01:36:30,240
boarding flow is missing vat status automate blocks the path that would create non-compliant transactions

1160
01:36:30,240 --> 01:36:34,880
when a refund occurs automate triggers the correction workflow so tax reversals stay linked to

1161
01:36:34,880 --> 01:36:39,360
the original decision and identifiers this is where most enterprises fail they treat exceptions as

1162
01:36:39,360 --> 01:36:43,520
rare under transaction controls exceptions are continuous and the platform that can't root them

1163
01:36:43,520 --> 01:36:47,920
becomes the bottleneck that breaks deadlines so power automate is your exception conveyor belt

1164
01:36:47,920 --> 01:36:53,120
power apps is your controlled input surface when humans must touch the system seller on boarding

1165
01:36:53,120 --> 01:36:58,160
vit number capture evidence attachments correction reason codes approvals for re issuance if a

1166
01:36:58,160 --> 01:37:03,040
human decision matters for compliance it needs a governed UI that forces completeness and leaves

1167
01:37:03,040 --> 01:37:08,160
a trail email threads don't count data verse in this context becomes the operational state store

1168
01:37:08,160 --> 01:37:12,320
the place where you can track transaction compliance states without mutating the accounting record

1169
01:37:12,320 --> 01:37:17,600
in finance posted is posted orchestration state can evolve power be eyes the inside layer not dashboards

1170
01:37:17,600 --> 01:37:22,800
as decoration dashboards as early warning systems in a wider world the question isn't are we

1171
01:37:22,800 --> 01:37:27,920
compliant this quarter it's are we compliant today and where will it break next power be i answers

1172
01:37:27,920 --> 01:37:34,080
that by making the pipeline observable success rates exception aging reconciliation completeness

1173
01:37:34,080 --> 01:37:40,800
and the deltas between what checkout says what finance posted what drr acknowledged and what cash

1174
01:37:40,800 --> 01:37:45,520
actually settled and that visibility is not optional because the organization will otherwise

1175
01:37:45,520 --> 01:37:50,080
invent visibility in spreadsheets spreadsheets are how architecture degrades quietly

1176
01:37:50,080 --> 01:37:55,040
now azure sits underneath all of this as the backbone not the star you need reliable integration

1177
01:37:55,040 --> 01:38:01,280
patterns event driven triggers durable storage of immutable payloads cues for retry and replay

1178
01:38:01,280 --> 01:38:06,240
and access control that treats compliance artifacts as sensitive data you need idem potency key

1179
01:38:06,240 --> 01:38:10,560
so resubmissions don't create duplicates you need retention that survives application upgrades

1180
01:38:10,560 --> 01:38:15,680
and vendor changes that's what azure is for scale and resilience but you keep it implicit in the

1181
01:38:15,680 --> 01:38:19,840
narrative because the audience isn't trying to become a cloud engineer they're trying to survive a

1182
01:38:19,840 --> 01:38:24,480
control plane shift without rebuilding their entire stack so the microsoft message is simple and

1183
01:38:24,480 --> 01:38:31,040
blunt dynamics 365 finance record the truth you'll defend power platform orchestrate the reality

1184
01:38:31,040 --> 01:38:38,960
you can't avoid exceptions corrections and evidence power bi observe drift before regulators do azure

1185
01:38:38,960 --> 01:38:43,520
make the whole thing durable enough that it doesn't collapse the first time a rail goes down if you

1186
01:38:43,520 --> 01:38:48,720
remember nothing else remember this veda doesn't require more systems it requires clearer system

1187
01:38:48,720 --> 01:38:53,440
roles and those roles are what prevents conditional chaos from becoming your operating model

1188
01:38:53,440 --> 01:38:59,600
governance controls evidence and correction trails governance is where most vday programs go

1189
01:38:59,600 --> 01:39:04,880
to die quietly not because controls are hard controls are easy to describe governance fails because

1190
01:39:04,880 --> 01:39:10,640
people treat it like documentation when it's actually runtime behavior what the system prevents

1191
01:39:10,640 --> 01:39:15,840
what it detects what it records and what it allows to be corrected without turning into fiction

1192
01:39:15,840 --> 01:39:21,280
under transaction speed reporting we have a policy is meaningless only enforced intent matters

1193
01:39:21,280 --> 01:39:28,720
so governance starts with a clean separation preventive controls detective controls and the

1194
01:39:28,720 --> 01:39:34,080
correction trail that binds them if you blend those into one vague compliance process you'll end up with

1195
01:39:34,080 --> 01:39:39,760
conditional chaos exceptions handled inconsistently corrections made without lineage and evidence scattered

1196
01:39:39,760 --> 01:39:45,600
across email and screenshots like it's still 2005 preventive controls are the ones that stop bad data

1197
01:39:45,600 --> 01:39:50,000
from becoming legal truth this isn't about perfection it's about blocking the predictable failures

1198
01:39:50,000 --> 01:39:55,920
that create downstream rejections missing vat IDs were required invalid address structures

1199
01:39:55,920 --> 01:40:00,560
missing mandatory invoice fields broken sequencing and timing breaches against the 10 day

1200
01:40:00,560 --> 01:40:05,680
issuance and reporting expectations described in the webinar the trick is where you enforce if you

1201
01:40:05,680 --> 01:40:10,000
enforce preventive controls after posting you're doing governance theater the ledger already

1202
01:40:10,000 --> 01:40:15,200
contains a committed position under vda prevention has to happen before the moment the invoice

1203
01:40:15,200 --> 01:40:20,480
becomes an outbound regulated object whether that object is issued by dynamics 365 finance by a

1204
01:40:20,480 --> 01:40:26,240
platform system or by an invoicing provider so prevention looks like this in practice validate the

1205
01:40:26,240 --> 01:40:32,080
master data inputs validate the transaction object against the EN6931 semantic requirements you

1206
01:40:32,080 --> 01:40:36,400
are mapping to validate the numbering and linkage rules for credit notes and validate that the

1207
01:40:36,400 --> 01:40:41,520
decision evidence exists for the scenario then allow posting and submission otherwise route to

1208
01:40:41,520 --> 01:40:46,480
exception handling with a reason code that is machine readable not a human rent detective controls

1209
01:40:46,480 --> 01:40:50,880
are different they assume bad things will happen anyway because they will and they exist to find

1210
01:40:50,880 --> 01:40:55,680
drift early drift is what kills you because drift turns into a backlog and the backlog turns into

1211
01:40:55,680 --> 01:41:01,200
manual cleanups and manual cleanups create undocumented decisions detective controls are thresholds

1212
01:41:01,200 --> 01:41:08,000
and reconciliation invoiced success rates to the rail rejection categories exception aging missing

1213
01:41:08,000 --> 01:41:12,640
acknowledgments mismatches between what was invoiced and what was reported and mismatches between

1214
01:41:12,640 --> 01:41:17,200
what was collected and what was posted as vat liability the thing most people miss is that detective

1215
01:41:17,200 --> 01:41:22,000
controls must be owned a dashboard that nobody is measured against is just wallpaper under vda you

1216
01:41:22,000 --> 01:41:29,440
want operational owners for specific signals rejection rate over x exceptions older than y days unmatched

1217
01:41:29,440 --> 01:41:35,200
settlements over zed missing evidence count and you want escalation rules that don't rely on heroics

1218
01:41:35,200 --> 01:41:40,400
now the core the evidence pack people hear evidence and think attachments that's amateur hour

1219
01:41:42,240 --> 01:41:46,880
evidence in a transaction control model is structured linkable and replayable for each regulated

1220
01:41:46,880 --> 01:41:52,880
transaction you should be able to produce without debate an evidence pack that contains the invoice

1221
01:41:52,880 --> 01:41:58,480
payload as submitted in the structured format you used the dr r submission metadata timestamps

1222
01:41:58,480 --> 01:42:03,920
message IDs and the acknowledgement or rejection response the vat ID proof where applicable including

1223
01:42:03,920 --> 01:42:08,240
the validation outcome and the date it was obtained the location evidence used for place of supply

1224
01:42:08,240 --> 01:42:13,040
decisions when destination matters the fx source and timestamp if currency conversion influence

1225
01:42:13,040 --> 01:42:17,440
reporting values and the linkage between original invoices and any corrections credit notes

1226
01:42:17,440 --> 01:42:22,160
amendments resubmissions and their identifiers that pack doesn't have to be one physical file

1227
01:42:22,160 --> 01:42:27,440
but it must behave like one stable identifiers retention controls and the ability to reconstruct

1228
01:42:27,440 --> 01:42:33,840
the decision without trusting life system state because life state lies it changes correction

1229
01:42:33,840 --> 01:42:38,640
trails are where enterprises either mature or collapse in the old world corrections were period level

1230
01:42:38,640 --> 01:42:43,680
adjust in the next return maybe issue a credit note and hope it ties out the webinar makes the shift

1231
01:42:43,680 --> 01:42:48,880
clear reporting becomes transaction level and the time window shrinks so corrections become transaction

1232
01:42:48,880 --> 01:42:53,120
linked amendments with lineage that means you need versioning discipline not update the invoice

1233
01:42:53,120 --> 01:42:57,360
record create a new correction object that references the original states the reason preserves

1234
01:42:57,360 --> 01:43:01,680
the original payload and generates the new payload with a new submission every correction should

1235
01:43:01,680 --> 01:43:06,880
answer three questions what changed why it changed and which regulated objects were affected if you

1236
01:43:06,880 --> 01:43:11,200
can't answer those instantly you don't have a correction trail you have edits and edits are

1237
01:43:11,200 --> 01:43:15,840
not defensible now map this governance model onto the Microsoft stack without turning it into a

1238
01:43:15,840 --> 01:43:21,680
compliance art project dynamics 365 finance holds the posted truth and must preserve the integrity

1239
01:43:21,680 --> 01:43:27,680
of posted records power platform governs the human touch points the approvals reason codes

1240
01:43:27,680 --> 01:43:32,560
and evidence capture that corrections require power automate enforces escalation and routing

1241
01:43:32,560 --> 01:43:37,600
for both preventive failures and detective signals power be I makes governance observable

1242
01:43:37,600 --> 01:43:42,720
not just what happened but where the control plane is eroding governance is not a binder it is

1243
01:43:42,720 --> 01:43:49,120
enforced intent preserved evidence and correction lineage that survives audits outages and organizational

1244
01:43:49,120 --> 01:43:55,360
amnesia continuity planning lawful degraded modes replay and idempotency continuity planning is the

1245
01:43:55,360 --> 01:44:00,720
part everybody claims they'll do later right after they finish the fun parts like mapping and dashboards

1246
01:44:00,720 --> 01:44:04,800
they are wrong because vida doesn't just tighten deadlines it removes tolerance for ambiguity

1247
01:44:04,800 --> 01:44:10,080
and outages manufacture ambiguity at scale the system will fail on schedule access points go down

1248
01:44:10,080 --> 01:44:15,520
national notes timeout certificates expire cues backup ERP posting lags and payment processes

1249
01:44:15,520 --> 01:44:19,840
deliver settlements whenever they feel like it none of that is new what's new is that your old work

1250
01:44:19,840 --> 01:44:25,280
around delay in manual cleanup stops working when reporting expectations converge toward near real time

1251
01:44:25,280 --> 01:44:30,720
and transaction level comparability so continuity under vida is not high availability it's lawful

1252
01:44:30,720 --> 01:44:34,880
degraded modes a degraded mode is what the business does when the rail is down the submission can't

1253
01:44:34,880 --> 01:44:39,360
happen or an acknowledgement doesn't return and lawful matters because of fallback that breaks

1254
01:44:39,360 --> 01:44:43,760
chain of custody is just fraud with better intentions there are four failure modes you designed for

1255
01:44:43,760 --> 01:44:48,960
because they are inevitable first the transport rail fails your pepall access point is unreachable

1256
01:44:48,960 --> 01:44:54,080
or a clearance system like italy's archetype is not responding in that moment you don't need heroics

1257
01:44:54,080 --> 01:44:58,400
you need a controlled cue that can hold submissions without mutating them second the national

1258
01:44:58,400 --> 01:45:03,120
note fails in a partial way you can submit but you don't get acknowledgments that creates the

1259
01:45:03,120 --> 01:45:07,760
most dangerous state you can't tell if the transaction was accepted rejected or duplicated if

1260
01:45:07,760 --> 01:45:11,920
you respond by resubmitting blindly you create duplicate reporting if you respond by waiting

1261
01:45:11,920 --> 01:45:17,680
indefinitely you create deadline breaches third your ERP posting lags the invoice exists in commerce

1262
01:45:17,680 --> 01:45:22,960
or billing but finance hasn't posted it yet or posting failed if you submitted the RR before finance

1263
01:45:22,960 --> 01:45:27,200
is the truth you'll report something you may later reverse or change if you wait for finance but

1264
01:45:27,200 --> 01:45:31,600
finance is late you'll miss the reporting window that is where architectural discipline matters the

1265
01:45:31,600 --> 01:45:37,040
invoice becomes reportable only when it reaches a specific state you can defend fourth settlement

1266
01:45:37,040 --> 01:45:41,680
drift PSP payouts include refunds and chargebacks that arrive after the original reporting if you

1267
01:45:41,680 --> 01:45:46,560
don't design for those late events your truth diverges quietly until you can't reconcile now the

1268
01:45:46,560 --> 01:45:50,880
engineering discipline that makes all of the survivable is simple capture immutable payloads

1269
01:45:50,880 --> 01:45:55,360
and replay them safely immutable means the payload you intend to report gets stored exactly as

1270
01:45:55,360 --> 01:46:00,160
generated with a stable identifier before you attempt submission not we can regenerate it from the

1271
01:46:00,160 --> 01:46:06,000
database regeneration depends on life state and life state changes prices get recalculated addresses

1272
01:46:06,000 --> 01:46:11,040
get corrected vat IDs get updated if you rely on regeneration you'll replay a different invoice

1273
01:46:11,040 --> 01:46:15,440
than the one you originally attempted to submit so you store the submission artifact as an object

1274
01:46:15,440 --> 01:46:20,080
payload metadata time stamps and the identity keys that link it back to the transaction the

1275
01:46:20,080 --> 01:46:25,920
invoice and the evidence bundle then you submit if submission fails you don't rebuild you replay

1276
01:46:25,920 --> 01:46:31,040
replay requires a damp potency because regulators don't enjoy duplicates and neither do auditors

1277
01:46:31,040 --> 01:46:36,080
it impotency means you can send the same submission again without creating a second logical transaction

1278
01:46:36,080 --> 01:46:41,600
in practical terms you need deterministic i-dempatent keys a unique submission id tied to the

1279
01:46:41,600 --> 01:46:46,080
invoice identity and version same invoice version same key correction version new key if the

1280
01:46:46,080 --> 01:46:51,840
rail accepts an id impotency key you use it if the rail doesn't you simulate the behavior by tracking

1281
01:46:51,840 --> 01:46:56,320
your own submission attempts and never emitting duplicates unless you can prove the original attempt

1282
01:46:56,320 --> 01:47:01,760
did not land that distinction matters because at least one's delivery is how integration works

1283
01:47:01,760 --> 01:47:06,320
exactly one's business meaning is what you have to engineer and you also need a lawful offline

1284
01:47:06,320 --> 01:47:11,440
posture even if the law varies some regimes will allow delayed submission under defined outage

1285
01:47:11,440 --> 01:47:16,560
conditions some will not the research makes clear that the technical specification details will evolve

1286
01:47:16,560 --> 01:47:21,520
over time and member states retain choices so you do not hard code offline allowed you design the

1287
01:47:21,520 --> 01:47:26,720
pipeline so that offline operation still preserves evidence the payload the failure reason the time

1288
01:47:26,720 --> 01:47:32,000
stamps and the retry sequence that is what makes it defensible later you can show what you tried to

1289
01:47:32,000 --> 01:47:37,360
do when you tried why it failed and exactly what you sent when the rail came back now map continuity

1290
01:47:37,360 --> 01:47:42,880
into the Microsoft ecosystem without turning it into an infrastructure lecture dynamics 365 finance

1291
01:47:42,880 --> 01:47:49,120
stays clean posted truth stable identifiers no panic edits power platform governs state transitions

1292
01:47:49,120 --> 01:47:54,800
and exceptions when an invoice is ready to submit when it is submitted when it is awaiting acknowledgement

1293
01:47:54,800 --> 01:47:59,760
and when it becomes exception owned power automate routes those exceptions and blocks downstream

1294
01:47:59,760 --> 01:48:04,800
actions like payouts when the compliance state is unresolved and your backbone as you're or any

1295
01:48:04,800 --> 01:48:09,680
durable integration layer stores immutable payloads runs cues and supports replay with

1296
01:48:09,680 --> 01:48:14,240
i-dampotent keys then you do chaos drills not because it's trendy but because the first time you

1297
01:48:14,240 --> 01:48:19,200
test replay cannot be when the rail is down and the cfo is asking why v80 reporting stopped you

1298
01:48:19,200 --> 01:48:24,080
prove failover replay and state recovery without breaking chain of custody because under vda

1299
01:48:24,080 --> 01:48:29,120
continuity is not uptime continuity is being able to prove what happened when the system didn't

1300
01:48:29,120 --> 01:48:34,720
country anchors italy sdivers Poland kcf vs. not xpepple if vda still feels abstract these

1301
01:48:34,720 --> 01:48:39,520
three country anchors fixed that they show the same destination transaction controls but through

1302
01:48:39,520 --> 01:48:44,320
different rails and different cultural assumptions about trust italy is the clearance archetype

1303
01:48:44,320 --> 01:48:49,600
Poland is the schema and state machine archetype the noughticks are the interoperability archetype

1304
01:48:49,600 --> 01:48:54,000
and you don't get to choose which one you prefer you get to operate across all of them while trying

1305
01:48:54,000 --> 01:48:59,840
to pretend you have one invoicing solution start with italy's sdiv model as the mental baseline for

1306
01:48:59,840 --> 01:49:04,400
clearance the defining behavior is simple the invoice isn't really an invoice until the system

1307
01:49:04,400 --> 01:49:10,480
says it is that single fact rewires your process design because your internal posting your customer

1308
01:49:10,480 --> 01:49:15,280
communication and your tax reporting all become dependent on acknowledgments and status that

1309
01:49:15,280 --> 01:49:20,240
distinction matters in a clearance world you architect for sequencing discipline you architect

1310
01:49:20,240 --> 01:49:25,120
for deterministic numbering you architect for explicit acceptance and rejection states and you

1311
01:49:25,120 --> 01:49:29,440
architect for the reality that sent is not a terminal state it's a request for permission so the

1312
01:49:29,440 --> 01:49:35,280
Microsoft implication is not we can output XML it's that your dynamics 365 finance invoice life

1313
01:49:35,280 --> 01:49:40,800
cycle must map to a regulated life cycle if sdi rejects you need a correction path that preserves

1314
01:49:40,800 --> 01:49:45,680
lineage if sdi accepts you need to persist the acknowledgement identifiers as part of the evidence

1315
01:49:45,680 --> 01:49:50,160
pack if you can't do that you can't prove the invoice existed in the form the authority considers

1316
01:49:50,160 --> 01:49:54,400
valid now Poland's ksdf model sits in a similar family but the failure mode is different

1317
01:49:54,400 --> 01:49:59,280
Poland is where teams learn that schema versioning is not a technical detail it is the operating model

1318
01:49:59,440 --> 01:50:04,640
because when the platform enforces a schema your adapters rot unless you govern them like code

1319
01:50:04,640 --> 01:50:08,640
your mapping layer becomes a product that needs releases testing and change control otherwise

1320
01:50:08,640 --> 01:50:13,040
the first schema update turns into a production incident with a tax deadline attached this is where

1321
01:50:13,040 --> 01:50:17,680
most people mess up they treat country adapters as integration projects then they walk away under

1322
01:50:17,680 --> 01:50:23,200
a ksf style system walking away is how you create deferred outages the system will accept your payload

1323
01:50:23,200 --> 01:50:27,120
until the day it doesn't and then your compliance pipeline becomes a queue of rejected

1324
01:50:27,120 --> 01:50:33,120
invoices with no rapid remediation path so architecturally Poland forces a normalization layer with

1325
01:50:33,120 --> 01:50:38,640
explicit version management canonical invoice in your domain deterministic transforms to the target

1326
01:50:38,640 --> 01:50:43,760
schema validation before submission and a release process that treats schema changes like breaking

1327
01:50:43,760 --> 01:50:48,720
api changes dynamics holds the posting truth fine but you can't let finance become the place where

1328
01:50:48,720 --> 01:50:53,040
transforms happen at hawk put the transforms in a governed layer and make the output artifacts

1329
01:50:53,040 --> 01:50:58,080
immutable then power automate roots rejections with reason codes and forces the fix upstream

1330
01:50:58,080 --> 01:51:02,480
not in the payload after the fact now the Nordics and the Netherlands often used as a

1331
01:51:02,480 --> 01:51:08,640
pepoll heavy reference show the other rail interoperability pepoll is not a tax authority platform

1332
01:51:08,640 --> 01:51:13,520
in the clearance sense it's a network pattern access points standardized documents and a delivery

1333
01:51:13,520 --> 01:51:18,240
mechanism that scales because it doesn't centralize permission the benefit is obvious reuse one

1334
01:51:18,240 --> 01:51:22,640
access point strategy can serve many counter parties the network effect reduces bespoke

1335
01:51:22,640 --> 01:51:27,840
integrations enterprises like it because it feels like messaging not control but interoperability

1336
01:51:27,840 --> 01:51:32,720
still enforces discipline just in a quiet away you still need e and musick 1931 semantics you

1337
01:51:32,720 --> 01:51:37,600
still need code list hygiene you still need predictable identifiers and you still need to handle

1338
01:51:37,600 --> 01:51:42,160
delivery and validation failures because it should work is not an engineering strategy so the

1339
01:51:42,160 --> 01:51:46,960
pepoll lesson is different the rail doesn't impose a single state machine therefore you must impose

1340
01:51:46,960 --> 01:51:51,920
your own you track send delivered acknowledged if available and failed you build your own evidence pack

1341
01:51:51,920 --> 01:51:56,560
from message metadata access point logs and your own stored payloads and you accept that different

1342
01:51:56,560 --> 01:52:00,720
member states may layer additional requirements over time because interoperability is not the same

1343
01:52:00,720 --> 01:52:05,280
thing as uniformity now pull these three anchors into one enterprise conclusion clearance teaches

1344
01:52:05,280 --> 01:52:11,440
you that acceptance is a system event not a human belief ksef style schema enforcement teaches you

1345
01:52:11,440 --> 01:52:16,560
that adapters rot unless you manage them as software products pepoll teaches you that decentralization

1346
01:52:16,560 --> 01:52:21,120
still requires deterministic internal state because the network won't save you from your own

1347
01:52:21,120 --> 01:52:27,120
ambiguity so the strategy is not pick the right country solution the strategy is one normalization

1348
01:52:27,120 --> 01:52:32,080
layer with adapters and one compliance state model that your business actually uses that is how you

1349
01:52:32,080 --> 01:52:37,200
avoid country specific spaghetti and that's why the next section isn't about theory it's the playbook

1350
01:52:37,200 --> 01:52:46,080
start small build the rails then scale implementation playbook start small build the rails then scale

1351
01:52:46,080 --> 01:52:50,720
this is the part everyone asks for because after 20 slides of control plane shift they want to

1352
01:52:50,720 --> 01:52:56,480
checklist they won't get a checklist checklist rot what they can get is a playbook that survives

1353
01:52:56,480 --> 01:53:02,320
entropy start small build the rails then scale because vdder doesn't reward ambition it rewards

1354
01:53:02,320 --> 01:53:07,840
repeatability start with an impact study but do it like an engineer not like a tax memo the research

1355
01:53:07,840 --> 01:53:12,960
advice is clear map transactions understand which flows are in scope and translate obligations into

1356
01:53:12,960 --> 01:53:18,000
system requirements so the output you want is not a power point it's a transaction inventory which

1357
01:53:18,000 --> 01:53:23,440
systems create invoices which systems calculate tax which systems hold customer and product data

1358
01:53:23,440 --> 01:53:29,280
which systems touch payments and which systems store evidence today if any then you mark the failure

1359
01:53:29,280 --> 01:53:33,840
points where data gets rekeyed where fields are optional where identifiers change where someone

1360
01:53:33,840 --> 01:53:39,120
fixes it later is the operating model that becomes your backlog not implement vdder implement the

1361
01:53:39,120 --> 01:53:44,000
parts of your pipeline that currently rely on delay and goodwill now pick one thin slice and ship it

1362
01:53:44,000 --> 01:53:48,880
the foundational mistake is trying to solve all countries all transaction types and all rails in one

1363
01:53:48,880 --> 01:53:53,600
go that produces an integration hairball and a governance vacuum instead choose a single high

1364
01:53:53,600 --> 01:53:59,120
volume flow you can control end-to-end one entity one channel one or two countries and build the vdder

1365
01:53:59,120 --> 01:54:03,920
rails around it pillar one is the right place to start because it defines the runtime behavior

1366
01:54:03,920 --> 01:54:09,840
e-invoicing and digital reporting so build the e-invoice and drr pipeline first even if the legal

1367
01:54:09,840 --> 01:54:14,880
deadline feels distant it's the forcing function that fixes your data model and your exception

1368
01:54:14,880 --> 01:54:20,080
life cycle your deliverables are boring and that's the point a canonical invoice object mapped to

1369
01:54:20,080 --> 01:54:26,080
e-n6931 semantics in your domain model a submission service that emits immutable payloads track

1370
01:54:26,080 --> 01:54:31,040
state and stores acknowledgments an exception queue that can be owned aged and cleared and an

1371
01:54:31,040 --> 01:54:35,200
evidence pack pattern that you can reproduce per transaction without debate do not start with a

1372
01:54:35,200 --> 01:54:39,920
country adapter start with the normalization layer that makes country adapters replaceable once

1373
01:54:39,920 --> 01:54:44,960
that rail exists add the operational surface area that keeps it from collapsing master data controls

1374
01:54:44,960 --> 01:54:50,400
that validate vat IDs and required codes before posting numbering and linkage rules for credit

1375
01:54:50,400 --> 01:54:55,600
notes and corrections and dashboards that expose failure as early as possible rejection categories

1376
01:54:55,600 --> 01:55:01,200
exception aging and success rate at this stage power platform earns its keep power automate routes

1377
01:55:01,200 --> 01:55:07,760
exceptions and enforces gating power be i makes the pipeline observable and dynamics 365 finance

1378
01:55:07,760 --> 01:55:13,440
stays what it should be the system of record that posts the truth you'll defend now you layer

1379
01:55:13,440 --> 01:55:18,560
pillar three capabilities because oss and reverse charge decisions depend on the same discipline

1380
01:55:18,560 --> 01:55:24,320
this is where you build workflow number two as a product check out decision capture evidence capture

1381
01:55:24,320 --> 01:55:29,600
effects discipline and an oss return preview that ties back to transaction IDs the preview is not

1382
01:55:29,600 --> 01:55:34,240
a quarterly report it is a daily visibility artifact if it can't run daily it isn't real then you

1383
01:55:34,240 --> 01:55:39,360
implement reverse charge decision as a governed model not as a tax code toggle customer classification

1384
01:55:39,360 --> 01:55:44,240
and establishment flags become controlled attributes with validation and history the system must

1385
01:55:44,240 --> 01:55:49,680
be able to answer why later not just what today inventory and own goods transfers join this phase if

1386
01:55:49,680 --> 01:55:54,000
they apply because they're part of the same reporting truth movements as events with identities

1387
01:55:54,000 --> 01:55:59,040
classifications and reconciliation paths only after pillar one and pillar three rails behave do you

1388
01:55:59,040 --> 01:56:04,320
touch pillar two and only if your business lives there if you are a platform in short term accommodation

1389
01:56:04,320 --> 01:56:10,160
or passenger transport you build theming logic as product design onboarding that captures VAT

1390
01:56:10,160 --> 01:56:15,840
status evidence pricing that handles VAT inclusive display correctly and payout statements that

1391
01:56:15,840 --> 01:56:23,040
reconcile gross fees VAT retained and VAT remitted if you're not in that world you don't burn

1392
01:56:23,040 --> 01:56:27,680
program time pretending you are now here's the scaling rule that makes or breaks this every new country

1393
01:56:27,680 --> 01:56:32,320
rail or transaction type must plug into the same normalization layer the same evidence pack model

1394
01:56:32,320 --> 01:56:36,640
and the same exception life cycle if a new requirement forces you to fork the model that fork

1395
01:56:36,640 --> 01:56:41,360
becomes permanent and permanent forks become compliance debt so you scale by adding adapters not

1396
01:56:41,360 --> 01:56:47,360
by rewriting behavior Italy style clearance new adapter same canonical invoice same state machine

1397
01:56:47,360 --> 01:56:52,320
different acknowledgments Poland style schema enforcement new adapter version transforms same

1398
01:56:52,320 --> 01:56:57,440
orchestration stricter pre validation Nordic style people interoperability same semantic contract

1399
01:56:57,440 --> 01:57:02,160
different transport same evidence discipline and you keep running continuity drills rail down

1400
01:57:02,160 --> 01:57:07,360
acknowledgement missing replay required correction path invoked because the first time you discover

1401
01:57:07,360 --> 01:57:12,960
your identity story is broken cannot be during a reporting window start small build the rails scale

1402
01:57:12,960 --> 01:57:18,240
with adapters that's the only way this turns into architecture instead of patchwork the uncomfortable

1403
01:57:18,240 --> 01:57:26,320
truth Vida turns tax into an always on system now the uncomfortable truth VDA doesn't digitize VAT

1404
01:57:26,320 --> 01:57:31,360
it operationalizes VAT that sounds like the same thing until you live through it digitization is

1405
01:57:31,360 --> 01:57:36,080
when you take the old process and run it faster operationalization is when the process stops being

1406
01:57:36,080 --> 01:57:41,520
a calendar event and becomes a continuous system behavior and Vida is built to eliminate your favorite

1407
01:57:41,520 --> 01:57:46,320
feature of periodic compliance the month and hiding place most organizations believe they can file

1408
01:57:46,320 --> 01:57:51,200
their way out of bad transactional data they are wrong under a transaction control model the

1409
01:57:51,200 --> 01:57:55,440
filing is no longer the first time the numbers matter the numbers matter at the moment they are

1410
01:57:55,440 --> 01:58:00,560
created at checkout at invoice issue at submission at settlement and at correction and the system

1411
01:58:00,560 --> 01:58:05,520
remembers each of those moments with identifiers and timestamps that distinction matters because it

1412
01:58:05,520 --> 01:58:12,320
converts will reconcile later into we can't explain it now this is why the just at e invoicing mindset

1413
01:58:12,320 --> 01:58:17,200
is a program killer not because xml is hard but because e invoicing is only the data contract

1414
01:58:17,200 --> 01:58:22,160
the real change is observability the authority's ability to compare supplier and purchaser to

1415
01:58:22,160 --> 01:58:26,880
correlate invoices and payments and to see patterns faster than your quarterly close process

1416
01:58:26,880 --> 01:58:31,280
so the enemy is not non-compliance the enemy is drift missing policies create obvious gaps

1417
01:58:31,280 --> 01:58:36,160
drifting policies create ambiguity and ambiguity is where exception debt accumulates every time

1418
01:58:36,160 --> 01:58:41,120
someone makes a local workaround an override tax code a manual credit note and adjustment journal

1419
01:58:41,120 --> 01:58:47,440
a reissued invoice without linkage you convert a deterministic security model into a probabilistic one

1420
01:58:47,440 --> 01:58:52,480
not because you love chaos because the system let you over time those exceptions become normal

1421
01:58:52,480 --> 01:58:57,280
then they become invisible then the business depends on them that is architectural erosion

1422
01:58:57,280 --> 01:59:01,440
vider rewards architecture because architecture is the only thing that scales intent you can't

1423
01:59:01,440 --> 01:59:06,480
train 5,000 users into consistent behavior under a 10-day window with real-time submission pressure

1424
01:59:06,480 --> 01:59:10,480
you enforce your assumptions at scale or you don't have assumptions you have hopes

1425
01:59:10,480 --> 01:59:16,080
and the system will not honor your hopes so what does always on tax mean for an enterprise running

1426
01:59:16,080 --> 01:59:21,760
dynamics 365 finance in the power platform it means your tax position becomes a pipeline with state

1427
01:59:21,760 --> 01:59:27,280
ownership and telemetry not a team not a spreadsheet a pipeline calculate once capture evidence

1428
01:59:27,280 --> 01:59:33,440
once report once reconciled continuously correct with lineage prove on demand if any one of those

1429
01:59:33,440 --> 01:59:37,920
stages runs on a different truth the pipeline breaks this is where systems thinking replaces

1430
01:59:37,920 --> 01:59:42,480
clerical work finance and tax stop living at month end they start living in exception cues

1431
01:59:42,480 --> 01:59:48,240
and reconciliation deltas the business stops asking did we file and starts asking are we green today

1432
01:59:48,240 --> 01:59:52,400
and that's a harder question because green today is a runtime property not a check box

1433
01:59:52,400 --> 01:59:58,080
now here's the part people don't expect early movers don't just get compliance they get operational

1434
01:59:58,080 --> 02:00:03,520
advantages because when you build transaction grade rails you also build cleaner master data faster

1435
02:00:03,520 --> 02:00:09,360
close fewer disputes and more predictable cash not as a motivational promise as a mechanical consequence

1436
02:00:09,360 --> 02:00:14,960
a deterministic pipeline reduces rework therefore it compresses cycle time it also makes blame harder

1437
02:00:14,960 --> 02:00:19,200
because the data shows exactly where the pipeline broke organizations hate that at first

1438
02:00:19,200 --> 02:00:23,200
then they realize it's cheaper than guessing but early mover payoff only happens if you treat

1439
02:00:23,200 --> 02:00:27,680
wieder as a product a product has a backlog a product has releases a product has monitoring a

1440
02:00:27,680 --> 02:00:32,320
product has incident response and a product has owners a project has a go-live date and a committee

1441
02:00:32,320 --> 02:00:36,800
vider eats committees because once the rules are live you don't get to pause the pipeline you don't

1442
02:00:36,800 --> 02:00:41,600
get to negotiate with an outage you don't get to ask the authority for one more month because you

1443
02:00:41,600 --> 02:00:46,560
adapt a broke the system just keeps asking for data therefore you keep producing data therefore

1444
02:00:46,560 --> 02:00:51,200
you must keep the machine healthy that's why the common data model matters if you build one

1445
02:00:51,200 --> 02:00:57,200
canonical transaction representation one evidence pack pattern and one exception life cycle you can

1446
02:00:57,200 --> 02:01:01,840
change rails without changing the business you can add countries without forking the logic you can

1447
02:01:01,840 --> 02:01:06,880
survive schema changes without panic you can replace submissions without duplicating legal truth you

1448
02:01:06,880 --> 02:01:12,000
can reconcile cash without inventing a second ledger if you don't your future is permanent exception

1449
02:01:12,000 --> 02:01:16,720
debt and permanent exception debt is expensive in the only currencies leadership understands cash

1450
02:01:16,720 --> 02:01:22,000
time and audit pain so yes vider is about vat but architecturally it is something else the redesign

1451
02:01:22,000 --> 02:01:27,680
of european trade as a continuously measured continuously compared continuously enforced data system

1452
02:01:27,680 --> 02:01:32,640
you can build a pipeline that behaves deterministically under that pressure or you can keep patching

1453
02:01:32,640 --> 02:01:38,080
and watch your compliance posture turn into conditional chaos treat video as a product not a

1454
02:01:38,080 --> 02:01:44,000
project viders key take away is simple build a transaction grade pipeline calculate invoice and

1455
02:01:44,000 --> 02:01:49,680
report reconcile file and prove because the month and hiding place is gone if you want the practical

1456
02:01:49,680 --> 02:01:56,240
build watch the next episode on workflow one dynamics 365 finance to e invoice to drr with the

1457
02:01:56,240 --> 02:02:01,360
evidence pack and exception q that makes it survivable subscribe if you want the rest of the miniseries

1458
02:02:01,360 --> 02:02:03,680
because this control plane isn't waiting for your road map