Does my billing system really comply with French Anti-Fraud Law?
Published: January 10, 2023
Who is affected by the French anti-fraud law?
Even if this anti-fraud law was put in place as of 2018, it is actually present in article 88 of the French law 2015-1785 of December 29, 2015. More precisely, this regulation applies to any company liable to VAT.
This measure was in a start, voted before others, to improve the collection of VAT and better fight against tax fraud. A report by the European Commission estimated that in 2018, nearly 15 billion euros were still missing from the collection of this tax. This discrepancy between expected and collected revenues should therefore be reduced over the years thanks to rigorous control of the financial activities of companies. In order to obtain a better view of the cash flows of European companies, it is now mandatory for them to use certified accounting and management software.
Digital technology has brought accounting to a new stage of evolution. Companies have been operating on two levels, one physical and the other digital, potentially resulting in the opacity of certain operations. While digitalization has continued to progress, confidence in the digital world has grown and naturally become the preferred environment for forward-looking companies.
Therefore, a standardization of these new practices will be the next step, in order to make the activities of organizations that may be subject to a tax audit readable.
Indeed, digital technology approach stands with great opportunities, however it can exploit various loopholes and anti-fraud legislation fights against that. 4 main compliance criteria must be considered.
In the law text, this imperative is precisely formulated as follows: “Any person liable for value added tax (VAT) who records payments from customers using accounting or management software or a cash register system must use a software or a system that satisfies the conditions of inalterability, security, conservation and archiving of data with a view to control by the tax authorities.
Let’s review these 4 main principles of Anti-Fraud Law while examining how the Sofacto Salesforce Billing App has respected them.
Anti-Fraud Law: Inalterability
It is specified that “the software […] shall record all original settlement data. It must keep this original data recorded and make it unalterable”. The idea behind this concept of inalterability is that it is not possible to go back to a document that has already been validated to correct certain fields.
This does not prevent an invoice from being modified following an error or a change in the transaction. The inalterability just ensures that the document keeps track of its modifications or cancellations. For instance, this could be within the document itself, with successive “plus” and “minus” operations that are added as modifications are made. With Sofacto, the documents themselves represent the history of a transaction: for example, when you want to correct an invoice that has already been sent, or even cancel it, you can create a credit note that will then be attached to the first invoice.
Anti-Fraud Law: Securing
It is mentioned that “the software […] must secure the original data, the record of the modified data and the data allowing the production of the issued supporting documents”. Data protection is indeed more than ever at the heart of the various digital challenges.
As a solution developed within Salesforce, Sofacto benefits from a trusted framework to host your billing data in an ultra-secure cloud. The text of the anti-fraud law also calls for vigilance on the part of your own teams when using the software, particularly during training periods. Sofacto protects you doubly against these hazards thanks to its licensing system. Distributed sparingly, they grant a set of authorizations according to the position held in the company.
Anti-Fraud Law: Archiving and Conservation
For this last point, it is mentioned that “the purpose of the archiving procedure is to freeze the data and to assign a certain date to the archived documents. It must ensure the integrity over time of the archives produced and their conformity to the initial settlement data from which they are created.” In the case of invoicing, this requirement can be found in the L123-22 article of the French Commercial Code, which requires that accounting documents should be kept for a period of 10 years.
Sofacto naturally stores all your documents in the Salesforce CRM cloud, thus avoiding any possible loss or additional costs generated by physical storage. Nevertheless, if wanted, it is possible to extract your billing data in order to ensure a double archiving.
The 4 points raised by the anti-fraud law are therefore factors of transparency and should not be considered as barriers to evolve. They are real levers for improvement for companies that have timidly embarked on the path of digitalization. And in the particular case of invoicing, they are precisely part of the arguments for changing software to take advantage of what technology has to offer.
To strengthen the fight against fraud, the anti-fraud law also brings various obligations to invoice electronically by 2024. Sofacto is closely monitoring these developments in order to offer you a solution that is simultaneously in line with the legislation and the most innovative trends that the digital doors are opening.
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