If you dropped your spare change, would you pick it up? Of course you would. Our money is our money and once we’ve earned it, it’s something that we protect carefully (spending habits aside). So why do so many financially-savvy people not apply the same mentality to their company’s finances? Quite literally, millions are being left behind by companies that are sending employees travelling on their behalf, but not entering into the process to reclaim the VAT that is available to them.
Bring money back into your business
In a recent webinar - if you register you'll receive the recording - we explored the VAT reclaim process and why it needs to be taken seriously. After all, any new process needs to have a business case. In short, the figures certainly do build that case, with around four per cent of global travel spend offering reclaimable VAT, a figure that rises to 10 per cent of European travel (discounting airfare). If you take into consideration that projected figures put business travel spend at around $220 billion for 2017 in Western Europe alone, it’s clear to see that we are speaking about large amounts of unclaimed money.
So why isn’t this collected?
There isn’t one set reason as to why reclaimable international VAT gets left behind. But put simply, a lot of the blame falls at the feet of that old suspect - manual processes. Firstly, manually reclaiming money needs a level of expertise. Different countries have different rules that need to be adhered to, and the type of business will also impact what can and can’t be claimed. This, combined with the fact that much of the paperwork can be rejected for any mistakes – not to mention the lengthy process – means the finance team may be put off considering VAT reclaim.
Automation is the way forward
Perhaps unsurprsingly, automation can greatly reduce the effort and complexity of reclaiming VAT, leading to far more companies being able to claim back the money that they are entitled to. If the expense process is automated, then a variety of spending is automatically captured in the system. Here, the real ingenuity lies in how tax companies – like those found in the SAP Concur ecosystem of partners – have embraced innovation to automate the process of analysis, submission of claims to the authorities and reclaiming the money on behalf of their clients. Suddenly, through some sensible technology choices, this arduous process has transformed into money flowing back into your business.
Getting your ecosystem right
After they connected their SAP Concur platform to one of our tax partners, Electrolux reclaimed 75,000 Euros in the first year compared to 18,000 Euros in the previous year. This is exactly why we are so proud of the ecosystem that we have built and how both our technology and our partners’ technology can combine to help companies achieve more than they initially expected.
When you lay the foundations of compliance with our Concur Audit service and enhance with the expertise of our tax reclaim partners, maximised VAT reclaim becomes a reality and not a dream. Now, any money you might inadvertently drop (or believe is too difficult to pick up), is put right back into your hand.