Managing VAT cashflows
Even if you’re doing a good job of managing cash flows, poor processes, deficient systems setup, or inefficiencies in contracting can result in penalties, damaged reputation and missed opportunities. Managing VAT cashflows better can mean working capital improvements of 3%-5% of turnover with cash freed up within a month or two.
For companies with European supply chains, identifying and implementing a VAT strategy to ensure VAT does not adversely impact the movement of products is advised. For consumer-facing businesses, simple changes to their VAT payment cycles (e.g., to take into account peak trading) can improve their ‘net’ VAT cashflow position significantly.