Expense Software Cuts Costs And Recalculations

Expense Software Cuts Costs And Recalculations

Expense Software Cuts Costs And RecalculationsBusiness travelers find themselves in a variety of different locations, which can range from another town to another country. Along with acclimating to new cultures and practices, there is also the need to contend with different currencies and types of tax. While this is obviously more common with global travel, even continental journeys pose accounting challenges. Features in expense software address these concerns from both the perspective of the traveler and of the financial office at home.

A Variety Of Legal Policies

Even within a single country, sales tax on business related tangibles and intangibles varies by region. Municipal governments see sales tax as being charged at the time when the exchange agreement is made. In modern culture, these transactions tend to be charged on credit, which means that the seller does not truly get paid until the purchasers account holder approves the charge. When this prospect is combined with the use of a business account, it can lead to undue complications.

Since the sales tax is charged at the time of the transaction, the state or country will also expect timely remittance of these funds from the vendor. The complications which arise occur when a travel expense that was charged to a company account is denied for release of funds. At this point, the vendor has received a non-payment, which can become a write-off, but from a government point of view, the sale has still been made, and taxes have still been claimed.

Within a single country, recouping these losses can be permissible across certain states and provinces. However, even between countries, there are also legal obligations which can allow a vendor to still pursue action in order to recover the lost sales taxes. For businesses without expense software this means anything from recalculating a quarterly budget to engaging in a full audit.

 

Modern Solutions

Expense software programs are capable of acting as both the messenger and the translator between a traveling employee and their company. Along with features such as currency conversions and current exchange rates, the software also has the ability to monitor for approval with online reporting. For considerations like sales tax recovery, result can be an immediate denial of payment to the vendor. As a result, the transaction is never initially completed, which means that the country or state will not register the event as a reason for claiming the tax.

While this obviously benefits the vendor, it also provides a considerable service to the company whose employee is traveling. Not only are hours of unnecessary accounting avoided, but expense software also alerts CFOs to patterns of expenditure that are occurring on specific trips or with specific employees. This further helps to cut costs and to avoid a loss of productivity.