It's transactions that make businesses tick. However, the strategic importance of the underlying transactional processes is unfortunately often overlooked. Despite being a core part of any organisation, legacy systems and the human factor cause accounting errors - and capital leakage. Even among best-in-class organisations.
We've put a price tag on the errors.
Based on an analysis of 17 million account postings from over 100 Nordic private and public sector organisations, we searched for one of the most common pitfalls in accounting: VAT errors. Value-added taxation is complex - and common - and so it provides an indication of the magnitude.
So, how much is lost?
On average, process and human factor errors caused a loss of EUR 0.73 per transaction due to VAT complexity. Furthermore, these errors represent 49% of the total cost of posting and codification.
The Nordics are on top of e-invoice usage in the world, but structured transaction data alone doesn't eliminate errors. The result indicates flaws in legacy processes and ERPs. Moreover, erroneous VAT is only the tip of the iceberg. Overpayments, double payments, wrong price - and the considerable time and resources required to fix errors – all add to the accidental capital leakage.
Download the full report Lost in transaction – the hidden cost of accounting errors and get inspired to assess and develop your financial processes.