Business Case

UNITED GROUP
 UNITED Group is a leading mobile phone manufacturer in Indonesia with 3 affiliate companies
supporting its manufacturing, logistics and sales & marketing as follows:
 PT UNITED KOMUNIKASI INDONESIA Tbk., Manufacturing
 PT UNITED LOGISTICS INDONESIA, Distribution
 PT UNITED MAJU JAYA, Marketing & Sales
To run the business, UNITED Group purchases goods and services from its vendors located across
Indonesia. These vendors will then bill their invoices to the centralized Finance team in Malang
city, in which invoices will be processed. UNITED Group and its vendors have agreed on the
Background completeness of invoices billed to UNITED to comply with Indonesia tax regulation. For every
invoice received, it must at least include the following: Commercial invoice, E-Faktur Pajak and
Delivery Notes.
(1/2) As all of UNITED Group’s affiliates are Taxable Entrepreneurs, they are eligible to claim back from
the Tax Authority the VAT billed by vendor from their purchases related to business operations.
The Finance team is divided into 3 groups: Invoice Receiving (7 headcount), Accounting (7
headcount), and Taxation (2 headcount) team.
Every day, UNITED Group receives around 700-1400 invoices with detail as below:
Affiliates Invoice Received / day
–PT UNITED KOMUNIKASI INDONESIA Tbk. ± 400 - 800 invoices
–PT UNITED LOGISTICS INDONESIA ± 200 - 400 invoices
–PT UNITED MAJU JAYA ± 100 - 200 invoices
 The current steps of processing invoices billed to UNITED Group are as follows:

Background
(2/2)
 The company expects a solution to improve current process of invoice processing, especially in:
1. Reducing the manual process when keying in the invoices into the ERP system
2. Reducing the number of human errors occurred related to point no.1 and VAT Report
submission

Objective
 Heidi is an invoice receiving team member working for UNITED Group.

On average, Heidi receives 175 invoices daily for all UNITED Group’s affiliates.
Among invoices received, on average, Heidi will reject around 25 invoices daily due to vendor’s
errors, such as: wrong affiliate billed, incomplete documents, etc.

For the complete and proper documents received, Heidi continue to do as follows:

Invoice identification (30 to 60 seconds)

1. Identify to which UNITED affiliates the invoice belongs to.
Supporting 2. Print and put the identification sticker to the first page of the invoice.

Information Invoice Scanning (60 to 150 seconds)

(1/5) 1.
2.
Scan the whole package of invoice using scanner machine and save into PDF format.
Send the softcopy invoice (PDF format) to be processed by accounting team in the
ERP system.
3. Send the hardcopy invoice to warehouse.
 Ira belongs to the accounting team and is responsible for Accounts Payable of UNITED Group.
She usually processes around 100-200 invoices daily, received from the invoice receiving team. For all the
affiliates in UNITED Group, Ira will validate and key in the invoice into the ERP accounting system to book
the transaction billed by the vendor. For that purpose, she will need around 3 minutes per invoice to perform
her job, detail as follows:

Validation (30 to 60 seconds per invoice)

1. Ensure invoice is billed to the correct affiliate.
2. Ensure goods/services description, billed amount, tax amount and other information are aligned
Supporting 3.
between commercial invoice, e-Faktur Pajak and the delivery notes.
If the documents do not pass the validation, Ira rejects the document and ask invoice receiving
Information team to send it back to vendor. Otherwise, Ira will continue to the next step below.

Key-in to the ERP system (60 to 120 seconds per invoice)

(2/5) 1. Commercial invoice number & invoice date
2. Billed amount
3. Invoice description
4. e-Faktur Pajak number & date
5. Purchase order number (must be mentioned on the invoice)
6. Tax amount (VAT & WHT), and other if any
7. Choose vendor’s account in the ERP system

Once the document is processed to ERP system, the ERP will generate an ERP document number to
identify the booking in the system.
 Due to different reasons, 1 commercial invoice can be followed by more than 1 e-Faktur Pajak.
For example when vendor split amount based on separate order date in the same month,
or when vendor includes reimbursement from third party.
For that case, Ira can only input information from one of the many e-Faktur Pajak received.
At the same time, Ira will take note of that particular invoice’s ERP document number so that she will be
able to identify the transaction that has multiple e-Faktur Pajak.
At the end of the period, Ira is required to submit a complete VAT Report to the Tax team for the tax
reporting purpose, detail as follows:

Supporting VAT Report (180 to 240 minutes per month)

1. Download to excel for all transactions entered in the ERP for 1 period
Information 2. Identify transaction with multiple e-Faktur Pajak from her list

(3/5) 3. Open scanned documents of multiple e-Faktur Pajak from ERP based on excel list
4. Breakdown the line transaction for multiple e-Faktur Pajak based on excel list:
 For example, total amount input to the ERP according to the commercial invoice is IDR 1.100.000
including 10% VAT
 Based on Ira’s list, this transaction has 3 e-Faktur Pajak amounting to
IDR 770.000, IDR 110.000 and IDR 220.000
each with their own e-Faktur Pajak number, date and detailed information
 Ira needs to split this IDR 1.100.000 transaction into 3 lines according to its
e-Faktur Pajak, and complete each e-Faktur Pajak information manually

5. Submit completed VAT Report to Tax team

 Leonard works in the taxation team for the UNITED Group.
Every month, he will prepare and submit VAT Returns for all UNITED affiliates based on the data
in the ERP system and the submitted VAT Report from accounting team.
Leonard activities are as follows:
Compare ERP system vs VAT Report (1 day / affiliate / month)
1. When VAT Report amount does not match ERP’s balance, he will ask accountant to
revise the VAT Report. This happened mostly due to human error occurred when
manually splitting multiple e-Faktur Pajak transaction.
Supporting 2. After all VAT Report submitted to Leonard is correct, then Leonard will compile them
into one VAT Final Report.

Information Upload the VAT Final Report to the Tax Authority webpage (2-3 days / affiliate / month)
1. The tax authority webpage will validate each uploaded transaction against
(4/5) counterparty’s data. If there is any discrepancy, the transaction will be rejected.
2. Leonard needs to identify the cause of the rejection and make revision on the
incorrect information, such as: incorrect e-Faktur Pajak number due to human error.
3. Follow-up
 Leonard will re-upload the revised VAT Report if it was due to human error
(such as typo) from accounting team, or
 Leonard will ask accountant to follow-up vendor for a revised e-Faktur Pajak
if it was due to incorrect e-Faktur Pajak information issued by vendor,
such as: incorrect affiliate name and Tax ID
 Additional Information
Since 2017, Indonesia Tax Authority has launched standardized e-Faktur Pajak
with QR Code that records e-Faktur Pajak information and status as shown below:

Supporting
Information
(5/5)

* Output of scanned e-Faktur Pajak QR Code

 You are hired as a consultant to help UNITED Group to:
 Provide solution(s) to achieve UNITED Group’s objectives
 Provide a timeline of implementation for your solution(s)
 Prepare a cost & benefit analysis for your recommendation(s)
 Compute the cost and full time equivalent head count needed to implement your
recommendation(s)
You may feel that to carry out the tasks you have to make additional assumptions.
Business This is permissible, provided that an adequate explanation of the reasons for such assumptions is
given.

Challenge