The variable nature of corporate environments can lead to inefficient processes, oversights, and human error when it comes to accounts payable expenditures. Although new procedural developments relying on increased automation may simplify many daily activities, they can also result in inaccuracies that are difficult to identify. A common issue is the misprocessing of recoverable sales taxes.
There a multitude of reasons for this, including:
- continually evolving legislative changes,
- system updates,
- personnel changes
- business growth
- deadline pressures
- human error.
Accurate recovery and payment of commodity taxes, VAT /GST /HST QST/PST, is a stream that directly impacts cash resources and cashflow. 87.4% of companies overpay sales tax.
Companies are generally prudent, and ensure commodity taxes collected on revenues are paid in a timely manner, they often don’t have the resources available to ensure the accuracy and timeliness of recovery of taxes paid. Sales Tax can be as high as 15% in Canada, so, missed recoveries are costly and expensive.
Canada and the provinces impose commodity taxes on the sale of goods and provision of services, rent, and the importation of goods and services. Commodity taxes paid by business enterprises on their purchases are refundable within a defined period of time.