The Israel Tax Authority (ITA) regulations state that all ERP and other simpler Bookkeeping systems include the ability to produce the “Open Format” or “Unified” File. This file is a full replication of all transactions in the ERP system, from Sales Order through Cash Receipt, Purchasing, Manufacturing, Inventory movements,
Accounts Payable and General Ledger transactions. The file is to be produced in a standardized format which allows the ITA to easily upload and read the entire file, without the need for specialized software.
The Israeli Localization of JD Edwards EnterpriseOne, produced and licensed by Alfasi Consulting, is the only version of JD Edwards registered with the Israel tax Authority.
Increasingly, over the past few years, Israeli subsidiaries of global enterprises have received requests from the Israel Tax Authority or VAT Authority to provide, within a very short time frame, the Open Format file. Failure to do so may lead to penalties, starting from a curtailing of the company’s withholding exemption to a possible disqualification of the Company’s Accounts.
The Open Format application in JD Edwards and other large ERP systems localized for Israel, needs to be adjusted to take into account the changes to the various document types and business process flows of the Israeli company in order to produce the required results. Even Israeli software which has been built with the requirements of Open Format in mind, may require adjustments as the business evolves.
As a company grows, extra modules may be added to the ERP system. A company that previously purchased all its inventory may begin manufacturing, an agricultural company may add a Grower Management Module or a large retailer may change their POS system. In all the above examples, many new Document Types will be added the ERP system, all of which need to be included in the Open Format file production.
The ITA will normally provide a week to 10 days for a company to produce and deliver the Open Format files. This will rarely be sufficient time to update the Open Format specifications and properly test the system. Rather than scrambling to produce the file, we strongly recommend an annual project to ensure that you are Open Format Ready for when the ITA makes its request.