For VAT professionals, the whole area of VAT recovery is a laborious task of both complexity and opportunity. The task is complex because of the ever changing rules and regulations of the different countries that have to be adhered to in an accurate, efficient and compliant manner. Opportunity lies in this task, as the amount of VAT that can be reclaimed, but all-too-often isn’t, runs into significant and game changing amounts. Billions of dollars that could be reclaimed get left on the table, as companies fail to grasp the complexities and the opportunity of both domestic and foreign VAT recovery.
As of 2018, 166 of the world’s 193 countries employ some sort of VAT system. For every business, VAT is an integral part of their everyday expenditure. VAT rates and exemptions differ considerably across varying jurisdictions and need to be constantly updated. Administering VAT on cross-border transactions requires intricate knowledge of the different countries laws and regulations governing VAT. This is made all the more difficult when laws get updated. With so many countries’ VAT laws to update and uphold, resources often get strained in order to keep up and remain compliant.
It can become costly to squeeze a company’s already limited resources in order to manually analyse and complete VAT reclaim. To manually navigate and manage the complexities of VAT reclaim across multiple borders and in different languages takes considerable manpower and expertise. Having to manage all the VAT documentation and stay compliant to varied rules and regulations is labour intensive, not transparent and definitely not cost effective. Data gathering alone can consume easily 50% of the time spent in VAT management by professionals, whilst the cost to administer these processes by human hand is amplified when you take into consideration the cost of human error.
VAT Technology in Use
Like it or loathe it, humans, and that includes VAT professionals, make mistakes. The more human involvement in any process, the higher the likelihood of mistakes. Human error can be seen in just about all stages of the VAT reclaim process. VAT professionals have to deal mistakes made at the front-end level. Lost or invalid receipts account for 40% of missed VAT reclaim on Travel and Expenses, an operational cost second only to salaries in company’s budgets. Meanwhile, even seemingly infallible, VAT professionals make mistakes in basic areas like poor bookkeeping or even simple form-filling. One wrongly ticked box, be it through plain error or lack of knowledge, can result in lost money and non-compliance, with the latter putting even more strain on resources for rectification.
VAT technology minimizes the human involvement and the human errors. When VAT laws get changed, the changes are automatically applied to the full VAT recovery process, making VAT reclaim a more streamlined and accurate process.
Compliance to VAT laws has never been more important and more complex for VAT professionals. With so many different domestic and foreign VAT regulations and exemptions to master, compliance becomes a major issue and governments around the world are investing more into ensuring VAT compliance. In the UK, VAT is the third-largest source of revenue for the government, so it ensures there are large penalties that are strictly enforced, for VAT non-compliance. Staying compliant is all the more difficult when VAT laws get updated, as they regularly do. When this happens, existing processes will need to be altered, which puts an enormous strain on resources and increases the margin of error. It could be a change in the flat rate, exemptions, filing requirements, or even heavy-impacting regulation changes such as GDPR. Any change in VAT laws that affect your business will need to be well managed.
Added value technology ensures VAT compliance at all times, regardless of country and language. VAT professionals using technology for their VAT spend can analyze their VAT data at any given time, have full control of VAT processes and a more accurate VAT reclaim.
Save Time, Save Money with VAT Technology
VATBox provides the solutions your business needs to ensure that VAT is being reclaimed correctly, efficiently and compliantly. By automating the process at every stage, real-time VAT analysis can be made for greater control and transparency. VAT documentation and management is controlled centrally, dramatically reducing the manpower hours spent gathering data, and ensuring a compliant and accurate VAT reclaim.
Using technology to automate the entire VAT process overcomes the multifaceted complexity of domestic and foreign VAT analysis and reclaim. Changes to laws are updated automatically, reducing further manpower time and slashing the likelihood of human error. Financially, VAT Technology solutions significantly reduce operating costs whilst importantly, providing a compliant solution to VAT reclaim. Let the hard work be done automatically and enjoy the many benefits VAT technology can bring to your VAT processes. Request a free demo here.