Taxation Reconciliation

Tax is the one counterpartyyou cannot negotiate with.

Every other recovery is a conversation. Tax is arithmetic against a statute, which makes it the quietest line on the list and often the fastest to collect. DataTwin reconciles what you booked against what you filed, and both against what your suppliers and customers filed, on the payables side and the receivables side together. Then it ranks what is left by how long you have to act.

How Discover works

Read-only on top of the ERP you already run
Both sides: credit claimable and credit at risk
Every item ranked by its remaining window

Four registers, one difference list

The four things that must agree

Live process

The four things that must agree

Returns as filedPer registration, per period
The ledgerWhat was actually booked
What counterparties filedSupplier returns and customer claims
Certificates and documentsWithholding, exemption, shipping bills

DataTwin

Reads all four and names every difference

One difference register

Entity 1 · Apr · Input creditSupplier never filed — at risk
Entity 1 · Apr · Input creditEligible, never claimed — claimable
Entity 1 · May · Output taxRate applied wrongly — exposure
Entity 2 · May · WithholdingNo certificate received — claimable
Entity 2 · Jun · Reverse chargeNot self-assessed — exposure

Why this matters A tax difference is not an opinion. Either the ledger and the return agree or they do not, and the counterparty is a statute rather than a negotiation. What is missing is the reconciliation, not the argument.

Read-only to start — we reconcile and evidence; we do not file your returns. Every stage runs on the same engine that powers the DARP Framework and FSCP: acquire, process, govern, report.

Two directions

Two directions, and they fail in opposite ways

Most tax work is organised by return rather than by direction, which hides the fact that the payables side and the receivables side leak differently. One loses money you were entitled to. The other creates exposure you have not provided for.

Payables: money you are owed

Input credit is yours if the spend was eligible, the document exists and your supplier actually filed. All three can fail, and the third is not in your control.

Receivables: exposure you carry

Output tax is yours to get right. A wrong rate, a wrong place of supply or a credit note that never reversed becomes an assessment, with interest.

And a clock over both

Almost every item has a statutory window. Once it closes the money is gone, valid claim or not, so urgency has to rank the findings, not just value.

The reconciliation

Five parts, from register to notice

Part 1

Start where every tax question starts: register against return

The books say one thing and the return says another, and nobody can say why without rebuilding both. Doing that once, per registration and per period, turns most tax questions from an investigation into a lookup.

Both registers, rebuilt

From the ledger up. Purchase and sales registers reconstructed from the transactions themselves, at line level, for every registration and entity you hold.

Every registration and entity reconciled separately
Built from transactions rather than from a filed summary
Multi-entity and multi-state positions held side by side

Return

Return against register

Period by period. What was filed compared to what the books support, with each difference carrying the invoices behind it rather than a net figure.

Differences explained by invoice, not by a summary total
Amendments and revised returns tracked to the period they fix
Late and missing filings surfaced against the period they cover

Window

Aged by window

Urgency, not just value. Each difference is tagged with the statutory window it sits in, so what is about to expire is ranked above what is merely large.

Every item carries its remaining claim or correction window
Items past their window reported honestly as closed
Ranking by urgency and value together, not value alone

← Payables side

Credit you can claim, and credit you should not have

Input credit fails in two directions at once. Credit is left unclaimed on eligible spend because nobody matched the document, and credit is claimed on spend that was never eligible or against suppliers who never filed. Both are found the same way.

Claimable, unclaimed

Money sitting in the register

Eligible spend where the credit was never taken, including import duty, reverse charge and credits stranded in a period nobody revisited.

Eligible purchases with no corresponding credit claimed
Import duty and reverse charge credit never taken
Credits stranded in a closed period, with the window shown

Claimed, at risk

Credit you may have to give back

Credit taken on blocked or ineligible spend, or against suppliers whose own returns do not show the invoice.

Purchase register matched to supplier filings, line by line
Blocked and ineligible categories tested against the spend
Credit requiring reversal surfaced before an assessment finds it

The supplier gap

Not in your control

A valid invoice from a supplier who never filed is a credit at risk. The gap is quantified per supplier so it can be chased while it is still recoverable.

Differences aggregated by supplier, with the invoices listed
Suppliers who file late separated from those who never file
The chase pack assembled from your own records

Receivables side →

What you charged, and what you should have

Output tax rarely goes wrong in the total. It goes wrong on a class of invoices, in one state, or on one product, and it stays wrong for as long as the master data that produced it stays wrong. Re-performing the decision on the invoice is what finds it.

Rate and classification

Re-performed, not assumed

Rate, classification and treatment tested against the item and customer on each invoice, rather than trusted from the master data behind them.

Rate and classification checked against the item and customer
Exemptions and concessional rates tested against their conditions
A wrong classification traced back to the master data behind it

Place of supply

Where it was actually supplied

Inter-state, intra-state and export treatment tested per invoice, since the consequence of getting it wrong is paying twice and reclaiming once.

Place of supply tested per invoice, not per customer
Export and zero-rated treatment matched to its documentation
Invoices taxed in the wrong jurisdiction listed with the value

Credit notes and returns

What was reversed, and when

Credit notes tested against the invoice they reverse and the period they landed in. A reversal in the wrong period is a difference in two returns.

Credit notes matched to the invoice and period they reverse
Sales returns reconciled to the tax originally charged
Reversals outside their permitted window flagged

Part 4

Withholding runs both ways, and both ways leak

Tax your customers withheld is a credit you have to claim, and it fails when the certificate never arrives. Tax you withheld on vendors is a liability you have to deposit at the right rate, and it fails on section, threshold and certificate.

What was withheld from you

A credit to collect

Short payments from customers reconciled to the tax they withheld, and the credit claimed rather than left sitting as an unexplained shortfall.

Withholding matched to the certificate and the period
Certificates never received, chased with the invoice attached
Credit claimed reconciled to what was actually deducted

What you withheld

A liability to get right

Rate, section and threshold tested per vendor and payment, including thresholds only breached once spend is aggregated across the year.

Rate and section tested against the nature of the payment
Thresholds tracked on aggregated spend, not per invoice
Deposits and returns reconciled to what was actually deducted

Certificates and exemptions

Dated, and they expire

Lower-deduction and exemption certificates applied only inside their validity, since an expired certificate silently becomes a short deduction.

Certificates applied only within their validity window
Expired certificates surfaced before the next payment run
Vendors with no certificate on file, listed before deduction

What this is not.

We reconcile and evidence. We do not file your returns, and we are not a substitute for your tax advisers. Rules are configured per jurisdiction rather than assumed, so the honest question to ask us early is which of your jurisdictions are already configured and which would be new work. We would rather answer that before a contract than after one.

Part 5

And when the notice arrives, the answer is already assembled

A tax assessment is a reconciliation somebody else has run on your data. If you have run it first, responding is a print rather than a project, and the difference between those two is usually several weeks and a lot of goodwill.

The annual position

Built through the year

The annual reconciliation assembled from the periods as they close, rather than reconstructed in the weeks before it is due.

Period reconciliations rolled forward into the annual position
Differences carried with the explanation agreed at the time
Prior-year corrections separated from current-year movement

Evidence, attached

Invoice level

Every difference carries the invoices, documents and filings behind it, so a query is answered from the record rather than from memory.

Each difference traceable to the invoices that create it
Supporting documents held against the item they support
Full population, so a sampled challenge can be answered in full

The same view for the auditor

And for your adviser

Your auditor and your tax adviser read the same reconciliation your team does, which removes most of the back and forth.

One reconciliation, read by finance, audit and advisers
Sign-off recorded against the period it covers
Changes after sign-off visible as changes, not as edits

Prevent

Then the same checks run forward, before the return is filed

Prevent is not a second build. The checks that reconciled last year are the checks that run on this month’s transactions. That is where a one-off recovery starts compounding.

1
At entry
Rate, classification and place of supply tested on the transaction, before it posts.
2
At payment
Withholding rate, section and threshold applied from the vendor record and the year to date.
3
Before filing
Register against return reconciled while the period is still open to correct.
4
After filing
Counterparty filings matched as they appear, so a supplier gap is a same-month chase.
5
At the close
The annual position assembled from periods already agreed, not rebuilt.

How Recover becomes Prevent

What changes

What changes, honestly stated

Not a longer list of features. A different distribution of who does what, and when a difference is found.

Where it shows	How tax reconciliation runs today	How it runs on DataTwin
The register	Downloaded, pasted into a workbook, reconciled by whoever has time	Rebuilt from transactions, per registration and period, as the period closes
Supplier gaps	Found at the annual return, when the supplier has stopped answering	Matched as filings appear, so the chase happens while it still works
Classification	Trusted from master data until an assessment disagrees	Re-performed on the invoice, with the master-data cause identified
Withholding	Checked per invoice, so aggregated thresholds are missed	Tracked across the year per vendor, per section
Certificates	Chased at year end, when many can no longer be obtained	Chased against the period they belong to, with the invoice attached
Urgency	Findings ranked by value, so expiring items get missed	Ranked by remaining window and value together
A notice	A project: rebuild the period, find the documents, explain the gap	A print: the reconciliation and its evidence already exist