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Is VAT Automation a Good Idea for Your Business?

By SiliconIndia   |   Monday, 16 October 2017, 11:51 Hrs
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Is VAT Automation a Good Idea for Your Business?



When some people hear about VAT automation, it’s easy to think that adopting an automated system is the best thing that can happen to your business. However, the automation involves some factors that need to be assessed before diving in. But this doesn’t imply that you shouldn’t be contemplating switching to automated VAT management.



Instead, this means that your business may not be ready for the transformation as far as the software’s ability to meet your requirements is concerned.



The benefits of VAT automation



While the process can be difficult for some businesses, it has lots of advantages to offer.



·       It facilitates a quicker VAT return as opposed to what happens when the process is manual



·       VAT automation is a great way of circumventing human error



·       It gives you the advantage of full compliance with newly-implemented regulations



·       Manual processes tend to be cumbersome, expensive and will usually put excess pressure on a few individuals who are conversant with the system



·       The VAT recovery technology is quite effective when it comes to generating accurate reports necessary for quick financial audits



·       The system stores even the tiniest details of VAT so your financial manager won’t need to remember every little detail



Despite the benefits, this doesn’t imply that this is a perfect system. Basically, there are still several flaws you’ll experience when setting the system for your startup. While you can’t ignore the fact that this system has undergone massive evolution to be what it is today, here are a few things that can improve VAT systems.



Streamlining employee involvement



When you decide to implement a VAT system in your business, almost every employee in the organization must understand how to enter the right data into the system. Alternatively, they must be aware of the right format to submit the data to your financial manager.



Since most systems come with a steep learning curve, some employees tend to be confused and submit the wrong information.



As such, the program that you choose to use should be friendly to both small startups and huge companies. In addition, the system needs to be appropriate for tech-savvy employees as well as those who haven't caught up with technology.



Basically, it takes a significant effort to educate every employee about the process but this doesn’t eliminate incorrect data. Since human interaction with the systems is present, human error is still prevalent.



Global discrepancies



When doing business across multiple countries, VAT automation can be a complicated issue for your business. Besides knowing where and when the transaction has taken place, there are also multiple questions that revolve around the nature of transactions.



Global VAT compliance is no mean feat when you are doing business in countries and cities with different VAT rates. Some VAT management tools can experience a serious difficulty in keeping up with current policies as well as constantly changing regulations in different locations.



The ideal system would be connected to a quality database with the ability to keep track of any change that is happening in all areas of interest.



Conclusion



Considering the pace at which VAT technology is evolving at, it’s possible that most of the limitations in the technology will be ironed out to make the process easier for any business. However, the existing technology can be very helpful to a business that’s struggling with bulky paperwork when keeping up with VAT regulations.



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