VAT C1-C4 accounting software capability – request for information

The purpose of this document is to invite prospective service providers to submit information

about the capabilities and services they offer. Interested service providers are requested to

present to Interfront and have an informative discussion of what their company can offer in terms

of the business requirement described below, and to ascertain whether it will be suitable to

Interfront's requirements. Interfront is gathering information on what products are available in

the market, what specifications the products have, the availability of the products in the

marketplace, and the possible rates / indicative pricing and timing of delivery of such products,

for the VAT accounting software capabilities, services, products, integration options and

commercial models that can be offered.

Interfront is gathering market information to understand the availability, maturity, suitability and

feasibility of accounting software solutions that can support the VAT C1-C4 initiative. The focus

is on accounting software that can enable entry-level VAT vendors, small businesses, microenterprises and informal operators to create, receive, view, store and exchange structured VAT

e-Invoices through an interoperability network within the South African market.

The RFI seeks to determine whether market participants can provide basic VAT accounting

software capability that supports structured e-Invoice generation and receipt, aligns to a

generally acceptable e-Invoice data model, and can interact with an interoperable network. The

RFI also seeks information on the type of interoperability network or access point model

supported by the provider, and whether the provider can demonstrate network access capability

in a proof-of-concept or sandbox environment.

All bids, contracts or orders for goods or services shall be subject to the General Conditions of

Contract as published by the National Treasury of the Republic of South Africa. Kindly familiarise

yourself with these provisions at www.treasury.gov.za.

2. RFI is not a contract

This RFI is merely focused market research and not a competitive bid and cannot be used for

placing a contract or purchase order and does not constitute a commitment but merely serves

to request information that may lead to a request for quotation.

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Request for information (RFI)

3. Preparation costs

The service provider will bear all its costs in preparing, submitting, and presenting any response

or proposal to this RFI and all other costs incurred by it throughout the RFI process.

4. Questions and answers process

Interfront will receive questions sent by bidder(s) by email to the address

[email protected] between the dates given in line 6 of Table 1 on . Interfront

may respond to questions received; however, it reserves the right at its sole discretion not to

respond to any question. The identity of a bidder(s) who has directed a question to Interfront will

not be disclosed. The questions and answers will be published on the Interfront Procurement

website and e-Tender portal.

Interfront may issue updated versions of documents issued in the RFI and/or may issue

additional documentation to form part of the RFI submission. Such re-issued or additional

documentation will be published on the Interfront procurement website and e-Tender portal. It

is the bidder(s) responsibility to visit the Interfront procurement website or e-Tender portal at

regular intervals to ensure that the bidder(s) uses the latest versions of documents in the RFI

submission.

Depending on Interfront’s assessment of the nature and extent of bidder(s) questions during the

question-and-answer process, Interfront may schedule compulsory or optional briefing

sessions.

5. Process after the closing date and time

Interfront may request additional information, clarification or verification in respect of any

information contained in or omitted from a bidder(s) RFI submission, which Interfront may do

either in writing or at a meeting convened with the bidder for that purpose. Only under exceptional

circumstances and in line with applicable legislation, Interfront reserves the right, at its sole

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Request for information (RFI)

discretion, to allow bidder(s) to amend or supplement their RFI submissions after the stipulated

Closing Date and Time, where it considers such amendments or supplements appropriate.

Interfront will evaluate the RFI with reference to the business requirements. Interfront reserves

the right to employ subject matter experts to assist in performing such evaluations.

6. Business requirement specification

6.1 Background

SARS is exploring options to modernise VAT administration through increased use of structured

digital transaction data, e-Invoicing, interoperability standards and improved participation by

VAT registered vendors in the digital tax ecosystem.

Entry-level and small VAT vendors often face challenges that limit their ability to participate in

digital VAT compliance processes. These challenges may include manual record keeping, limited

access to affordable accounting software, limited digital infrastructure, low accounting maturity,

intermittent connectivity, and inability to generate structured e-Invoices in a format suitable for

automated exchange and future VAT reporting.

The VAT C1-C4 initiative focuses on the accounting software side of the e-Invoicing ecosystem.

It seeks to understand whether the market can provide a basic accounting software capability

that enables small and micro-VAT vendors to participate in an interoperability network without

imposing unnecessary cost or complexity.

6.2 Business need

The business need is to identify accounting software providers that can support a basic,

structured and scalable VAT accounting service for qualifying entry-level VAT vendors, small

businesses, micro-enterprises and informal operators. The core requirements include the

following:

• simplified VAT accounting;
• structured e-Invoice creation;
• receipt of supplier e-Invoices;
• secure exchange through an interoperability network;
• offline capture and later synchronisation;

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• minimum VAT data capture;
• invoice viewing and storage;
• credit note handling;
• basic general ledger or accounting postings;
• manual capture of invoices not received through the network;
• issuing of invoices to vendors not yet participating in the interoperability network; and
• proof-of-concept participation.

6.3 Target users and vendor profile

The intended user base includes VAT vendors and potential VAT participants operating in the

lower end of the business market, including entry-level VAT vendors, small businesses, microenterprises, informal operators moving into more structured business activity, SMMEs within or

lower turnover thresholds, and business owners who require a simple digital tool to capture

product information and basic accounting information.

The RFI assumes that the business entity must have a bank account as a minimum requirement.

Service providers are requested to indicate whether their solution requires a business bank

account, whether a personal bank account can be supported in limited cases, and what

implications this has for onboarding, verification, reporting and data quality.

6.4 Scope of information requested

Vendors should indicate which of the following capabilities are provided by the

software

• Generate VAT-compliant invoices

• Receive supplier invoices

• Receive supplier e-Invoices through a network or access point

• View invoices generated and received

• Store invoice records

• Capture minimum VAT fields for e-invoice generation

• Capture and process credit notes

• Identify and indicate whether an invoice has been paid

• Record basic revenue and expense activity

• Maintain basic accounting information

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• Support core general ledger postings
• Export or exchange structured e-Invoice data
• Operate online and, where possible, offline
• Synchronise offline transactions when connectivity is restored
• Authenticate and onboard vendors
• Manage secure data transfer
• Support South African data protection and privacy requirements
• Participate in a pilot, sandbox or proof-of-concept environment
• Support qualifying entry-level vendors through a free, subsidised, minimum-fee or other

low-cost service model

• Support PC and/or mobile use

6.5 Functional requirements

Service providers are requested to describe the functional capability of their solution in relation

to account setup and onboarding, product tiers and commercial model, invoice creation, receipt

of supplier invoices, structured e-Invoice capability, interoperability network participation,

offline capability, credit note handling, basic VAT accounting and general ledger capability, VAT

reporting readiness, mobile and web capability, and security, privacy and data protection.

6.6 Information required from service providers

Service providers are requested to provide company information, product information, technical

information, commercial information and proof-of-concept participation information.

Responses should distinguish between capability currently available, capability available with

configuration, capability available with minor enhancement, capability requiring significant

development, capability planned on the product roadmap and capability not supported.

6.7 Questions to be answered by the service provider

The following questions to be completed in line with the functionality provided by

your solution.

NO. questions included

6.7.1 What accounting capability can your organisation provide for entry- Yes / No

level, small and micro-VAT vendors?

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NO. questions included

6.7.2 Does your solution currently support structured e-Invoice generation? Yes / No

6.7.3 Does your solution currently support structured e-Invoice receipt? Yes / No

6.7.4 Which e-Invoice standards, data models or interoperability frameworks Yes / No

are supported?

6.7.5 Which interoperability network or access point model does your Yes / No

solution support?

6.7.6 Can your organisation demonstrate network access capability? Yes / No

6.7.7 Can your solution operate offline and synchronise when connectivity is Yes / No

restored?

6.7.8 Can users create invoices while offline? Yes / No

6.7.9 Can users receive or capture supplier invoices while offline? Yes / No

6.7.10 What minimum VAT data fields does your solution capture? Yes / No

6.7.11 Can your solution process credit notes at full invoice reversal level? Yes / No

6.7.12 Does your solution support partial credit notes? Yes / No

6.7.13 Does your solution allow manual capture of invoices not received Yes / No

through a network?

6.7.14 Does your solution allow issuing of invoices to vendors not participating Yes / No

in the interoperability network?

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NO. questions included

6.7.15 Does your solution indicate whether an invoice has been paid? Yes / No

6.7.16 Does your solution provide basic revenue and expense tracking? Yes / No

6.7.17 Does your solution provide basic general ledger postings? Yes / No

6.7.18 Does your solution provide VAT summaries? Yes / No

6.7.19 Is your solution available via mobile application? Yes / No

6.7.20 Is your solution available as a web-only application? Yes / No

6.7.21 What functionality is available in the free or entry-level tier? Yes / No

6.7.22 Is the free service time-limited or available on an ongoing basis? Yes / No

6.7.23 What are the commercial models available, including free-to-market, Yes / No

subsidised, minimum-fee, white-label or incentivised options?

6.7.24 What onboarding requirements apply to small or micro businesses? Yes / No

6.7.25 Is a business bank account required to use the solution? Yes / No

6.7.26 What authentication and access control mechanisms are used? Yes / No

6.7.27 How does your solution address POPIA compliance and South African Yes / No

data sovereignty?

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NO. questions included

6.7.28 What infrastructure, support and integration requirements would apply Yes / No

to conduct a proof-of-concept participation?

6.7.29 What constraints or dependencies should Interfront and SARS be aware Yes / No

of?

6.7.30 What additional information should be considered when assessing Yes / No

market readiness for the VAT C1-C4 initiative?

6.7.31 Can software be provided to participate in a proof of concept? Yes / No

6.7.32 Does software support multi-currency functionality Yes / No

6.7.33 Are you able to demonstrate your software solution? Yes / No

6.7.34 Does your solution provide for the recording or making payments? Yes / No

6.8 Out of scope

The following requirements are excluded from the scope:

• full ERP functionality;
• advanced inventory management;
• payroll functionality;
• enterprise-wide finance transformation;
• advanced procurement functionality;
• complex workflow management;
• replacement of existing enterprise accounting systems;
• detailed development specifications for SARS systems; and
• supplier selection or award.

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Request for information (RFI)

7. Development period/proof of concept

A proof of concept (POC) will be required to test VAT C1-C4 accounting software capability,

interoperability network participation, structured e-Invoice exchange and usability for qualifying

entry-level VAT vendors. The proof of concept may include account setup and onboarding,

invoice creation, VAT data capture, structured e-Invoice generation, network transmission,

supplier invoice receipt, offline capture, later synchronisation, credit note processing, basic VAT

summaries, basic general ledger postings, manual invoice capture, security assessment and

commercial model assessment.

The proof-of-concept period may be between three and six months, depending on the solution

capability, environment readiness, integration requirements and agreed scope.

8. Duration of engagement

The duration of any future engagement will be determined after completion of the RFI process

and any subsequent procurement, proof-of-concept or governance process. This RFI does not

commit Interfront or SARS to any contract duration, procurement model or supplier engagement.

9. Confidentiality

Throughout this RFI process and thereafter, both parties shall maintain the confidentiality of all

information exchanged in connection with this RFI. Neither party may disclose, publish, or

otherwise release any information relating to (i) the potential work or activities to which this RFI

relates, or (ii) the RFI process and any subsequent processes, without the prior written consent

of the other party, except where disclosure is required by law. Each party shall take all reasonable

steps to protect such confidential information from unauthorized access, use, or disclosure.

Failure to comply with these confidentiality obligations may result in disqualification from the RFI

process, termination of discussions, and/or such legal remedies as may be available to the

affected party.

10. Additional information

Any additional information that may assist Interfront in understanding the market, available

software capability, interoperability readiness, commercial models or proof-of-concept

feasibility will be considered useful. Service providers are encouraged to distinguish clearly

between capability currently available, capability available with configuration, capability

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Request for information (RFI)

available with minor enhancement, capability requiring significant development, capability

planned on the product roadmap and capability not supported.

11. Response format

Description included

Executive summary Yes / No

Company profile Yes / No

Product overview Yes / No

Response to business requirements Yes / No

Response to functional requirements Yes / No

Response to technical requirements Yes / No

Response to commercial questions Yes / No

Proof-of-concept readiness Yes / No

Demonstration readiness Yes / No

Risks and assumptions Yes / No

Additional information Yes / No

Contact details for follow-up engagement. Yes / No

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