Whether employees are submitting travel expense for reimbursement, or making purchases for the business through international channels, the sales tax that is owed on these transactions can still result in considerable concerns for the parent company. Although not all foreign sales tax is an issue, accounting for sales taxes at the end of the fiscal quarter or year can lead to unpleasant surprises for the management team.
Traditional methods for filing these types of spending do overlook the discrepancies that will need to be accounted at tax time. This can be due to an actual oversight, but can also be the result of poorly filed forms and receipts. With a web based expense report, not only can the data be organized and filtered according to dependent tasks, but it can also provide stronger protocols and controls regarding costs that will need to be reimbursed.
The two major areas where foreign sales tax does become a point to focus on include business income from a foreign source, and any cancelled debts. Although financial managers are more aware about recovered sales tax on foreign income, they are not always certain as to the applicability in terms of company payment.
This is also because the need for recovery is based on national trade agreements that different countries have with one another. However, a web based expense report that is set to the appropriate filters can quickly give management personnel a full overview of where recouping will need to take place.
The second issue can become a little more complicated, but a web based expense report still provides solutions that facilitate better efficiency and productivity. While some cancelled debts may purely be between corporations, vendors, and other professional leads, other cancelled debts include employee spending that is later rejected for approval. When this happens, the business is still responsible for recovering the sales tax that is owed.
By automating the accounting process and generating a web based expense report, accounting teams can receive spending information in real time, which reduces the amount of cancelled debt that can occur. The combination of real time monitoring and appropriately filtered reports streamlines the process for sales tax recovery, and minimizes the hidden fees that can linger until tax time.