How to facilitate accounting in Israel – opinion

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In Israel, there are strict accounting and customer invoicing rules and regulations covering all businesses. Approved Israeli software or printed books must be used – not Excel, Word, QuickBooks, or Sage. Otherwise, the Israeli tax administration doesn’t just levy fines, it can also estimate taxable income, which is never good for the taxpayer.

In practice, small businesses typically outsource accounting and tax reporting to an accountant or accountant who has all approved software and can process the returns by the 15th of each following month, or by the 19th if the returns are filed electronically and tax paid. electronically.

These companies must let the accountant or bookkeeper have all the documents on a regular basis throughout each month. They should also provide read-only access to their internet bank accounts and credit card accounts.

Large companies generally have in-house accounting departments.

In short, if you own or manage a business, large or small, you need reliable, up-to-date books to tell you (and the IRS) how you are doing. Is the business profitable? Is the cash flow sufficient? How much do you owe suppliers and when do you have to pay them? How much do customers owe you and how old are their balances? Are you on budget or on milestones? Do you need to report to investors?

Illustrative photo of Israeli money (credit: MARC ISRAEL SELLEM)

Help is at your fingertips

On the sales side, there are software products approved by the Israel Tax Administration that help you generate tax invoices electronically. You then have the sales data for the books.

As for bank account and credit card statements, there is now software available to read movements and transactions.

There are travel report products out there, but unfortunately not all of them generate the data needed to calculate the amounts allowed as expenses under Israeli tax regulations.

There are inventory programs that will help you track your inventory levels. Israeli tax regulations require it, as do year-end physical statements.

And there are comprehensive ERM (Enterprise Resource Management) and ERP (Enterprise Resource Planning) systems that help give a combined view of your business.

But one of the big areas of “nuisance” is that of accounts payable (A / P).

Accounts payable

Accounting software and ERM / ERP systems have become considerably innovative in recent years, but newer technology (eg from DOKKA.com) aims to further optimize the financial process. By using a combination of artificial intelligence and other features, accounts payable teams, bookkeepers, and accountants become more efficient. Here is a preview.

Optical Character Recognition (OCR) is widely used around the world, but does not always work effectively in non-English documentation, and even with English documentation there are issues. Turning unstructured data into structured data is now possible in every language with almost any financial document.

In the old days, an accountant would review a document and spend time creating the accounting entry. Today, accounting entries can be created automatically by combining data extracted from documentation, (date, reference numbers, amounts, etc.) and information from accounting / ERP software (general ledger account, VAT code, supplier , etc.). Within seconds and one-click approval, the accounting entry and documentation can be transferred to your approved accounting software system. And the system can be trained to remember all of this for the future.

New technology can now not only recognize an invoice, but also match and extract data from a purchase order or receipt of goods.

What about approving payments before they are made? Digital approval flows can be established so that the right people can approve documents before they are processed or paid for.

What about liaising with colleagues / superiors / clients? A chat feature can be linked to documents so that you can talk to them. This can be a huge time saver, avoiding ping pong by email or phone when you need to resolve questions on documents.

Purchasing documents can also be managed digitally. In the old days, you would file documents, write sticky notes on them, and staple them together. Today, you can use a Google style search to instantly find any document. You can virtually link documents and add virtual sticky notes to documents. But smart document features can go further with virtual folders, markup, and virtual duplication.

On the run? No problem, document collection, approval workflows, chat collaboration and intelligent document management can be integrated with mobile apps, so you can continue wherever and whenever you want.

As always, consult experienced advisers in each country at an early stage in specific cases.

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