London, February 5, 2021: Tungsten Network is advising customers to avoid the cost trap of decentralized invoicing department cost as a way of complying with an increasing number of governments implementing invoicing mandates.
The guidance comes as many governments turn to invoice mandates to avoid economic shortfalls and VAT Gaps. The VAT Gap is the overall difference between expected VAT revenue and actual collection amount. In 2018, the EU VAT Gap was €140bn. Mandates ensure legislated taxation compliance and VAT collection by requiring businesses to either share invoice data or route invoices through government-owned platforms.
This practice is becoming a key tool in elimination of common tax avoidance measures. In 2019, Italy mandated business to business e-invoicing for all companies. Since then, the Italian government has reported a €4bn tax revenue increase. Visibility of invoice information also helps governments with the right tools detect economic performance trends and make more informed decisions about budgets and policies.
“What’s good for Governments, isn’t necessarily good for business,” says Ruud van Hilten, SVP Country Compliance for Tungsten Network. “The more countries adopt these measures, the more it creates process and integration complexity because the rules will differ from country to country.”
In recent years, leading finance departments have achieved productivity gains, outperforming the median average by 30-40%. These gains are due to streamlining, standardizing and by centralizing resources into shared services centres of excellence.
“Given new mandates including the November 2020 German federal B2G e-invoice mandate, it’s all too easy to reverse cost savings by decentralizing invoice processing, adding headcount and overhead costs,” adds van Hilten, “We know local knowledge will be required to ensure compliance. But adding more people to carry out this task will reverse centralized shared service value, undoing savings previously achieved. The best value approach to solving the problem is smarter processes.”
Tungsten Network CEO Andrew Lemonofides says, “The common-sense approach is partnership with a service provider capable of meeting complex compliance requirements. As the leader in global e-invoicing and compliance, Tungsten Network is uniquely qualified to protect and enhance customer productivity gains amidst mandate changes.”
About Tungsten Network
The Tungsten Network vision is to be the world’s most trusted business transaction network by using intelligent data to strengthen the global supply chain. Trusted, passionate and proven, Tungsten is making the digitisation of global commerce between Buyers and Suppliers faster, easier and smarter.
Tungsten Network processes invoices for 70% of the FTSE 100 and 72% of the Fortune 500. It enables Suppliers to submit tax compliant e-invoices in 53 countries, and last year processed transactions worth over £133bn for organisations such as Alliance Data, Cargill, Deutsche Lufthansa, General Motors, GlaxoSmithKline, Mondelēz International, Henkel, IBM, Kellogg’s and the US Federal Government.