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IMPROVING CASH FLOW THROUGH VAT

Through our centralised VAT reporting service, we’re improving cash flow for businesses trading cross-border in the EU

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Our VAT experts remove the VAT burden while improving cash flow for companies trading cross-border in the EU. Read on to find out how we helped a leading distribution business improve cash-flow as a result of our VAT and supply chain analysis.

We know that VAT should not burden companies; it is important to realize that it’s a tax on consumers that businesses happen to collect. Nevertheless, VAT obligations can often create cash flow issues for firms trading cross-border. So it’s important to take steps to minimise any impact to continue to trade with confidence.

We have extensive experience in helping businesses resolve cash flow issues through VAT compliance. For this reason, a leading distribution business that deals in raw materials (iron, steel and magnesium) contacted us. We provided a competitive proposal for specialist VAT advice.

Prior to contacting us, the business received advice from an independent consultant. However, the company identified that current processes were not optimised. As a result, there were negative cash flow consequences. They were also concerned about exposure to a high level of risk that they wanted to reduce.

Supply Chain Analysis

After reviewing the client’s existing compliance structure, in addition to some of its supply chains, we took over the management of its Spanish VAT registration from their previous provider. Sovos Accordance also helped the business to obtain two further VAT registrations in other EU Member States. We identified the need for which while we carried out our initial review work.

Result

As a result of these actions, the client transferred the responsibility for VAT compliance management to Sovos Accordance. Through our centralised VAT reporting service, they gained visibility on their VAT position across multiple jurisdictions. It also meant that risk is more readily controlled and managed.

Adding value

Finally, we also advised our client to become part of the voluntary Special Monthly Refund Register (REDEME) regime in Spain. Qualifying businesses can obtain VAT refunds on a monthly basis (as opposed to annually). This reduces cash-flow blockages as a result. This then led to the effect of freeing up cash that the businesses invested in itself.

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