Take Control of Your VAT Position
For U.S. multinationals, it is important they take control of and properly manage their global positions with regard to value added tax. Automating this tax process can be managed through ERP systems by integrating a capable third party VAT engine with your financial/ERP system. Since VAT automation is basically an international extension of sales tax automation processes already being used in the U.S., multinationals can take control of value added tax positions by using a VAT software package, such as the Vertex O Series, that contains country-specific VAT rules and rates.
Users then input or transfer value added tax data into their business's Accounts Payable system or to Accounts Receivable. From there, the VAT software will analyze the inputted data to establish the correct jurisdiction in which the supply should be taxed and the appropriate tax rate for the transactions.. And with the continually evolving report functionality of third party VAT engines, valuable data reports can be generated to help tax departments complete compliance returns.
The Benefits of VAT Automation
Using a third party VAT engine to automate VAT processes can provide many benefits including:
- Cost-Effective Solution - Not only is VAT software a cost-effective means for multinationals to manage their global VAT performance, but it also provides businesses with a reliable data source to base their entire global strategy for value added tax.
- Regular VAT Rates and Rules Updates - Users and their tax systems stay up-to-date with current foreign market tax rate and rules changes, as well as the appropriate supply logic required to properly identify tax accounting jurisdiction with the need for research efforts by users.
- Reliable Tax Decision Making - Automated value added tax software provides reliable and consistent tax decision-making and input abilities operating far more efficiently than native ERP functionality while also removing the chance of human error.
- VAT Visibility - Automated VAT solutions systems can provide management with a high level of visibility into a company's global value added tax position, reduce audit exposure risk and free up resources by minimizing the amount of cash reserves maintained.
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