img

Industry News

image

Changes In Middle East VAT Landscape Adds Urgency To Employee Spend Management Rethink

SAP CONCUR, Strategic Partner for #KTNAFA shares their insights on this extremely crucial topic!

Employee spend management a low-hanging fruit for delivering better business outcomes during time of global upheaval.

In a time of widespread disruption and change, companies that adapt the best to a dynamic business environment are well-placed to survive and thrive. Technology is one of the most valuable tools to assist companies during this time: according to a McKinsey Global Institute study on disruption, companies that are digital leaders in their sectors have faster revenue growth and higher productivity than their more analogue peers.

As the world recovers from a period of unprecedented upheaval, companies are seeking novel ways of improving their versatility and flexibility to ensure they can adapt to changes in their environment, their customer base and their workforce.

According to Emma Shakespeare, Regional Sales Director at SAP Concur, managing a business in uncertain times is a matter of managing change. “Companies will need to relook how they manage spend: one poll of chief financial officers found that travel and entertainment is expected to be the second spend item after hiring that will be introduced as people affected by lockdowns return to work. What policies need to change, and what tools can be introduced to facilitate such changes while minimising further disruption to the business? Spend management is a high-value area for investment in this environment. Maintaining tight control over costs and ensuring complete visibility over total spend gives company decision-makers greater agility and improves their capacity to adapt to new changes.”

Visibility, agility in spend management

Business travel is one type of spend that could benefit from a relook. Many organisations in the Middle East provide a blanket per diem amount to employees during business trips, which is an allowance they receive every day of their trip. “However, if the trip is extended or shortened, it’s nearly impossible for the finance department to make adjustments, especially when the organisation relies on paper-based processes,” explains Shakespeare.

Without visibility over the employee’s travel expense receipts, organisations also can’t tell if they’ve given too much money, or whether the employee stayed at a hotel where the organisation already has preferred rates. “VAT recovery is also impossible,” adds Shakespeare. “With the introduction of VAT rates in the Gulf region, and the Kingdom of Saudi Arabia’s trebling of VAT rates from July 1st, companies need to think carefully how their employee spend management processes are set up, or they risk losing substantial revenue.”

Intelligent employee spend management refers to a comprehensive way for organisations to obtain a unified view of their employee spend. It offers three distinct forms of value to the organisation by helping them manage every source and category of spend and providing a unified view of employee spend that can inform HR and finance processes, improve cash flow and liquidity and ensure impactful cost containment.

“In our competitive and often-disruptive business world , companies increasingly seek tools and partners that can help free up precious internal resources and allow the business to focus on its most important challenges,” says Shakespeare. “For Concur, this means bringing in a vibrant partner network and ecosystem that together capture every form of spend and that adds up to a single unified view of spend across the organisation. A healthy partner network also creates opportunities for innovative new ways of unlocking value or efficiency in the expense management process."

Partner network unlocks new business outcomes

Shakespeare cites the example of VAT IT, a global SAP Concur partner with 41 offices and more than 12 000 clients across the world. “VAT IT’s VAT Cloud technology seamlessly integrates with the SAP Concur platform to extract invoice images and data for VAT reclaim requests, both locally as well as internationally. This can increase companies’ VAT refund potential by as much as 70% when they integrate with the SAP Concur platform.”

VAT IT was founded in 1999 in Johannesburg and today counts half of the Fortune 500 companies as clients. According to Devon Auby, Regional Director for the Middle East and Africa at VAT IT, automating the VAT reclamation process through technology has unlocked immense time saving and additional revenue for its customers. 

“In the past, teams of people would have to spend days on-site at a customer’s office, manually sifting through and capturing physical invoices,” says Auby. “Through our integration with SAP Concur, companies can automate most of its data capture and quickly gain granular insight over what their recoverable VAT amount is. Through insights into specific tax authorities’ VAT reclamation policies, we are also able to ensure full compliance while realising the greatest possible VAT reclaim amount.”

Auby adds that the current trend of remote working is likely to only grow in popularity as more companies untether their teams from corporate offices.

“In light of the global shutting of borders and subsequent short-term decrease in business travel, there will likely be a significant decrease in travel-related invoices through the SAP Concur platform,” says Auby. “But with more than half the world currently working remotely, we are also expecting employee expense claims to significantly change and overall increase. For example, employees working from home due to government regulations may need to purchase office equipment to allow them to do their jobs effectively. Cut off from office facilities, many employees may need additional equipment or supplies, such as printer ink and mobile connectivity. We expect to see a significant increase in related claims over the short term and possibly for the foreseeable future."

Shakespeare also believes there’s a greater need for technology tools to assist with VAT reclamation considering the recent changes in the Middle East region’s VAT rates. “The Kingdom of Saudi Arabia has tripled its VAT rate to 15% to assist with its post-Covid recovery,” says Shakespeare. “In light of the existing VAT Framework Treaty signed by the six-member Gulf Cooperation Council of which Saudi Arabia is a member, there is likely to be further implications for the region’s processing of VAT. Having appropriate technology tools and partnerships in place to manage responses to the changing VAT landscape can give organisations in the region a welcome boost in efficiency and revenue retention at a time when the economic outlook is less than rosy.”

Sponsors & Partners

Official RPA Partner Sponsors and Partners
Exclusive Business Intelligence Sponsor Sponsors and Partners
Strategic Partner Sponsors and Partners
Silver Sponsor Sponsors and Partners
Organised By Sponsors and Partners

Supporting Associations and Media Partners

Supporting Association - ACCA Sponsors and Partners
Supporting Association - ICAI - UAE Chapter Sponsors and Partners
Supporting Association - ICAI - Abu Dhabi Chapter Sponsors and Partners
Supporting Association - UAE Chapter Of ICAP Members Sponsors and Partners
Supporting Association - IBPC Sponsors and Partners
Supporting Association - IASCA Sponsors and Partners
International Business Magazine Sponsors and Partners
Blocksocial Sponsors and Partners
Financial IT Sponsors and Partners