British SMEs will have failed to claim an estimated £2 billion in expenses for the 2011 / 2012 financial year, according to new research.
One of the biggest failures of small businesses is not claiming the full amount of VAT they’re entitled to. Sloppy management of expenses in this area alone means they’re failing to claim for a quarter of all potential VAT refunds, at a combined annual cost of nearly £1.2bn.
Poor standard of expense management
The standard of expense management by SMEs is so poor that:
- 40% aren’t confident their expense records are accurate enough to allow them to claim all the tax deductions;
- 40% don’t know the size of the monthly expenditure bill;
- one third don’t know how much their employees claim in expenses every month;
- for many small businesses, the time spent managing expenses (13 day per annum, on average) exceeds that spent generating new business or investing in new markets.
Even SMEs who retain an accountant to manage the process could still miss out on identifying patterns in expense claims which could help streamline processes or identify potential cost inefficiencies.
….read the full article.