EMS Before Your Business Needs an SOS
Travel has become an integral part of the business landscape, with companies spending an average of 6-12% of their total annual budget on travel costs. If processed properly, VAT from most travel expenses can be fully recovered. However, the very nature of global business travel translates into cross-border complexities and difficulties in maintaining the vast knowledge required to understand the rules for managing expenses and claiming VAT in different countries.
Some T&E systems are programmed to make assumptions that may in fact cause erroneous calculation of recoverable/deductible VAT. In addition, inconsistent usage of currencies can easily lead to processing errors. Add to this the many instances of employee error and fraud that often go undetected until they are uncovered during an audit.
Managing these complex T&E processes are often simply beyond the scope of many enterprises. In fact, every year companies file incorrect VAT claims, reporting T&E data that is inaccurate or not properly backed by evidence. This puts them at serious risk for audits and non-compliance with domestic and international regulations. Valid claims may also be rejected due to incorrect filing, leaving significant sums of VAT unrecovered.
The EMS Advantage
Expense management systems (EMS) are deployed to process, pay, and audit employee-initiated expenses, including travel-related expenses. Expense management includes the policies and procedures that govern such spending, as well as the technologies and services utilized to process and analyze the data associated with it. Electronic systems also make it easier to collect, transfer, store and analyze large amounts of data without significantly increasing the time spent by companies on compliance.
With an automated system, there is an even greater benefit in heightened productivity of clerical staff, and the need for manual input of T&E spend data is minimized, although not completely eliminated. Reducing manual input can also positively impact the accuracy of expense reports, thereby reducing lengthy and costly corrections.
Best in class EMS are user-friendly and focus on improving the process of expense entry and approval flows, while reducing processing costs and eliminating manual processes.
Value of a Digital Expense Management System paired with a VAT recovery solution
A robust EMS provides the comprehensive data necessary to support an efficient and effective VAT reclaim process, with easy audit trails necessary to satisfy tax authority requests. Companies that offer electronic expense reporting can more easily flag out-of-policy spend or card misuse, further facilitating VAT reclaim processes and compliance.
Using a VAT recovery solution together with a travel expense system saves significant costs, and reduces overall compliance and regulatory risks. When combined, businesses benefit from the power of automation to improve their T&E processes and their overall VAT recovery.
To learn more about the importance of a robust Expense Management System for automating and recording data necessary for the process of VAT reclaims, audit and compliance, we have prepared a White Paper. The White Paper provides detailed data about the difficulties in VAT reclaim, defines how to choose an EMS, describes widespread productivity gains from implementing EMS, and clarifies the true benefits of having a robust EMS for your business.
Founded in 2012, VATBox implements the highest level of data security and compliance with all international rules and regulations of the various jurisdictions, and offers companies 360⁰ visibility into their VAT spend and recovery. Let us show you too how your company can thrive in today’s complex financial times. Request a free demo here.