A popular misconception when considering VAT assurance technology is that the data-driven approach to automated transaction monitoring, especially when it comes to VAT compliance, is going to be expensive, complex, and disruptive to implement. With many finance teams already using all their resources just to meet their business support, reporting and audit obligations; few have the time and resources to put toward identifying new problems.
An effective and reputable VAT technology becomes a key member of the finance team. Working 7 days a week, 24 hours a day with no requests for leave or calling in sick. Many will expect immediate or dramatic savings when this type of technology is installed, but the focus is rather on improved assurance and compliance, and not immediate bottom line profits. A recommended approach once the technology is installed is that time is set aside when exceptions are uncovered. By fixing these as they are found you ultimately improve the longer-term value and overall assurance of all financial transactions.
Experience has shown that monetary savings do emerge over the medium to longer term and with data being more readily available this can also lead to reduced costs when audits happen as they require less manual intervention. When combined with other data-driven initiatives such as continuous monitoring of accounts payable or accounts receivable, organisations would be able to identify value generating insights that aid in cash flow improvement and process cost reductions.
As the complexity and risks of indirect tax and VAT compliance increases for all organisations a data-driven approach to VAT assurance will increasingly become a key to success. Those that are able to properly evaluate their transactions with greater accuracy and efficiency should find themselves well-positioned to reap the wider benefits of a more mature and focused VAT assurance function.
Clearly, technology will be a strategic consideration for these organisations to enable them to make the shift, and that is why now is the best time to get VAT software.