How to Achieve 100 percent Expense Review For Taxable Employee Benefits


Inefficient & complex invoice validation posed by multiple EMS systems

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How to Simplify Compliance & Maximise VAT Returns with Advanced AI

In the dynamic landscape of modern work environments, particularly in the aftermath of the COVID-19 pandemic, the process of managing and reviewing taxable employee benefits (TEB), or fringe benefits tax (FBT), has emerged as a significant challenge for businesses worldwide. This complexity is not limited to sectors with high employee mobility but extends to any organisation where employee-related events, commuting, work from home arrangements, and similar activities occur. A compelling illustration of this challenge is presented through the experiences of a large company headquartered in Germany, employing close to 12,000 staff across various countries.

The company’s finance team, already burdened with policy compliance reviews, found relief in the face of daunting tasks. The sheer volume of expenses to be reviewed and the intricate rules surrounding taxable benefits, which vary from country to country, made maintaining efficiency and compliance nearly impossible without resorting to automation. The solution came in the form of the Blue dot platform, which empowered the team to increase its audited transactions for employment taxes by 500%, resulting in a 27% boost in reporting accuracy. This marked improvement closed significant compliance gaps and enhanced global controls without increasing the workforce, giving the team a sense of control and efficiency.

Several key challenges highlighted the need for a transformative approach to managing TEB. The high volume of employee expenses made manual review and accuracy verification unfeasible, leading to a reliance on sample checks and leaving many categories unexamined. Moreover, the necessity for detailed expense reporting for tax purposes clashed with the goal of simplifying the expense submission process for employees, complicating the verification of costs like parking, which could be taxable or exempt based on specific conditions.

Furthermore, increased scrutiny from tax authorities, driven by financial pressures such as COVID-19 support measures, soaring energy prices, and inflation, has intensified the demand for tax-compliant processes. Companies face not only financial but also reputational risks if they fail to meet these compliance standards. Additionally, the global tax landscape continues to evolve rapidly, especially in response to the pandemic’s impact on remote and hybrid work, posing further challenges to maintaining regulatory accuracy across different jurisdictions.

To address these challenges, the company implemented Blue dot’s solution, integrating it with their expense management system. Blue dot’s platform leverages artificial intelligence to analyse, structure, and harmonise data from expense records and receipts, including specific codes and employee details. This enables the automated identification of taxable benefits and items requiring attention from the finance department, streamlining the process for payroll and corporate reporting.

The results of implementing Blue dot’s solution were nothing short of transformative. Previously, only a small fraction of transactions and expense images were reviewed for tax purposes. With Blue dot, 100% of expenses are now processed automatically, ensuring compliance with country-specific TEB rules. This shift not only increased compliance by 20% but also reinforced the company’s commitment to social responsibility by ensuring a fair contribution to the tax systems of the communities in which they operate. This success story is a testament to the transformative power of Blue dot’s platform, instilling hope and optimism in businesses facing similar challenges.

This use case underscores the importance of embracing digital tax transformation to navigate the complexities of managing taxable employee benefits in a globalised and rapidly changing work environment. Companies interested in streamlining their TEB management processes are invited to explore Blue dot’s offerings and join the movement towards more efficient, compliant, and responsible tax practices.

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