Is there room for innovation in VAT recovery?
In our previous newsletters, we have explored the potential for companies to recover air miles as a new source of savings. Today we will be covering more familiar territory, but an area that is still under-exploited by companies: recovering VAT on work expenses.
We asked VATBox* to help us gain a better understanding of good practice in VAT recovery with the help of technology.
VAT recovery is a subject that calls on three very distinct areas of expertise.
The first area relates to taxation. The perpetual evolution of rules and directives now means that organisations must maintain an active monitoring unit in order to be aware of all the ways in which they apply; in concrete terms, this can involve staying on top of the fields of application for several thousand evolving rules.
The second relates to local knowledge. Each authority has its own informal way of operating, and contacts always take place in the local language. For companies wishing to take advantage of the full potential for VAT recovery, we are talking about some fifty different countries.
The third relates to technology. Manual processing (sorting, photocopies of boxes of invoices) has well and truly had its day. Only technology can eliminate input errors and provide the compliance necessary for optimal VAT recovery.
Many companies throw in the towel when faced with cumbersome and complex manual procedures that leave room for errors, and take little interest in reclaiming VAT on expenses. This source of savings is still seen as poorly controlled and offering limited benefits, so its real potential is often overlooked.
This potential is very real, however, with an accepted savings level of 4% of a company’s expenses. So a company that repays 2 million euros in expenses can expect a potential annual saving of between €60,000 and €80 000, provided that the expenses are “compliant” in the eyes of the relevant tax authorities.
In addition to the savings, there are also significant gains in visibility, compliance and governance.
Thanks to its highly accomplished technological approach based on a SaaS platform, VATBox has been able to optimise the execution of a previously cumbersome manual process, allowing it to:
- Automate all VAT recovery operations.
- Provide full visibility across the entire process, for both domestic and foreign VAT.
- Adapt to the organisation of its client companies, whether they still use paper or an advanced expenses management solution like Traveldoo.
- Offer companies a dynamic dashboard (real-time visualisation of refundable, requested, reimbursed and ineligible amounts)
So we can conclude that there is indeed room for innovation in VAT recovery, making it another example of the numerous technological innovations that are significantly altering the day-to-day operations of those involved in the optimisation of T&E processes (tax, accounts and finance departments, etc…)
It would be a shame to overlook this source of savings.
* VATBox* is an innovative international company that manages VAT recovery for a portfolio of multinationals in France and abroad, all of them belonging to the CAC 40 or the Fortune 500. VATBox brings innovation to the market with a multi-patented solution that automates every stage of VAT recovery.
Accolades: CitiBank Accelerator programme, MasterCard programme, recently nominated for the Red Herring Europe Top 100…