Filling out VAT Recovery Forms is So Last Century
There was once a time when people were forced to fill out long and complex forms in order to claim VAT returns that are legally due to them. Completing the forms seemed to require a degree in law to manage all of the compliance issue involved and a degree in linguistics to work out all the languages on receipts from abroad.
It was so hard to complete the forms and they took up so much time that many companies simply didn’t bother to do it. They left a combined $20 billion in VAT unclaimed every year, money that belongs to the companies.
Imagine letting billions of dollars go to waste simply because the process was too complicated. Clearly, a new and better method for reclaiming VAT was needed.
Today, the forms are a relic of the past, like public pay phones. They exist and some people still use them, but their numbers are falling. People are choosing technologically advanced solutions. Public phones are being replaced by smart phones, and VAT return forms are being replaced by apps that simply the process and make it easy to collect the money.
Automating the VAT return process has a number of added benefits to companies other than a larger bottom line:
1. No More Lost Receipts
In the old days, the VAT claim forms were filled out on paper and all of the receipts for expenses were on paper as well. They were easy to lose and often difficult to read, compounding the difficulty of making the claims.
Those receipts were also difficult to use for any purpose other than claiming expenses. It was impossible to file them into any systematic system that could make them useful to trip planners and budget allocators.
But with automated solutions, receipts are instantly scanned into the VAT return system. That means no more paper that can be easily misplaced. The receipts are also easily accessible by all those who need them.
2. Greater Transparency
Companies are making more trips abroad than ever before, increasing the need to make each trip as efficient as possible. That means cutting costs their absolute minimum.
Automated expense reports make it easy to see all foreign spending at a glance. That makes it easier to identify areas where costs can be cut or eliminated. That sort of transparency was impossible only a few short years ago.
In an era of global business, travel is essential. Knowing exactly how money is spent abroad can lead to new solutions. Transportation costs can be measured to see if more cab rides are better or if a rental car makes more sense.
3. Better Travel Planning
With about 5% of a company’s budget going to travel, it’s important to get it right. VAT return software can help identify which expenses will ultimately be returned to the company, helping make decisions even more precise.
It also offers a large and growing databank of spending in cities across the world. When the company needs to send people back to those cities, planners have access to expense reports unique to those cities. Since costs for accommodations, food, transportation, and various other line items will vary from city to city, those unique reports provide a great deal of important information.
The reports also build on each other year to year so that expenses can be tracked over time. What might have seemed like a valid expenditure a year ago may now seem like an unnecessary extravagance. The opposite may also be true. Decisions to lower costs may be revealed as missed opportunities.
Automating VAT returns makes sense for a number of reasons. It allows companies to reclaim money that is owed to them instead of writing it off as a sunk cost. When a process that used to seem overwhelming can now be completed in mere seconds, there is no reason to leave money on the table.
The simple reporting process also helps companies get a better handle on expenses, making them better fit to make decisions about spending on foreign travel. With more trips abroad each year, there is greater need for more careful oversight of expenses. With automated expense reports, the job can be done with greater precision and more efficiency.