New and evolving VAT compliance and audit mandates are putting a lot of pressure on businesses, making them reevaluate how they internally manage indirect tax determination and reporting.
Nearly one-third of CFOs told Grant Thornton that keeping up with the volume and complexity of compliance changes is one of their biggest challenges. Traditional compliance approaches – manual spreadsheets, conventional enterprise resource planning (ERP) platforms and on-premise software deployments – can’t keep up with today’s dynamic regulatory environment, making this process tougher and putting even more stress on businesses.
Now, more than ever before, companies need to develop an intelligent, long-term compliance and reporting strategy. This strategy should not only effectively address current VAT compliance and audit mandates in every country in which a company operates, but also prepare for the future.
VAT compliance and reporting technology solutions offer an ideal approach for this long-term strategy. With these solutions, companies can acquire capability that helps:
- Control budgets. These solutions are automatically kept up-to-date with the latest developments and changes and thus avoid the need of having major last-moment implementation projects for every new country mandate.
- Stay compliant and mitigate risks. Accurate and compliant returns are a necessity to avoid penalties and assessments.
- Reduce processing time by moving away from manual, time-consuming compliance processes to simplified and efficient automated processes.
- Establish visibility and control by having a solution that standardizes compliance, creates insights into the overall process and provides a full audit trail that helps prepare for audits.
When selecting a VAT compliance and reporting technology solution, it is important to ensure it meets at least the following requirements:
- Flexible and customized – integrates with any existing back-office systems and adapts to business industry, structure and processes
- Global – is capable of supporting VAT and business-to-government (B2G) reporting requirements wherever businesses operate
- Scalable – streamlines end-to-end VAT compliance and reporting processes across departments and countries and gives visibility and control over them
- Intelligent – empowers business through data analytics and protects business growth strategy from what comes next
If your company is faced with challenges keeping up with dynamic tax regulations or wants to upgrade its VAT compliance and reporting strategy to be a Center of Excellence, technology is no longer a “nice to have” – it’s a “must have.”
If you haven’t already, now is the time to explore the benefits of VAT compliance and reporting technology, and how it can work within your existing operations. More and more countries are instituting mandates for real-time transactional data (i.e., eAccounting, eLedger and eInvoicing), so it is essential to be proactive, embracing technology to address these unprecedented, detailed reporting obligations. Read more about Sovos’ VAT Reporting solution here.