Verifying tax registration numbers (TRNs) is a legal requirement in many countries around the world, including in the European Union (EU).
But we know many businesses – including some of the most famous brands of all – are failing to do so; either because they have not put processes in place to achieve this crucial check or due to their infrastructure and systems simply being unable to perform checks to the necessary standards.
Since 2020, we’ve been developing our industry-leading LimeLyte® Entity Manager platform to offer unprecedented power, accuracy and precision when it comes to validating TRNs and cleansing master data.
But before we could get started, we identified many of the most common and costly pain points for tax professionals who were tasked with validating TRNs (also known as VAT numbers) and worked to eliminate them.
Here’s our round-up of five of the most frequently disclosed problems – and exactly how we developed Entity Manager to provide a comprehensive and failproof resolution to those headaches:
Pain 1: ‘How can we validate local and EU VAT numbers? Aren’t the formatting requirements different?’
It’s true that there can be major differences in the composition of a TRN in your local jurisdiction compared to one that complies in the EU or further afield.
Every country and jurisdiction loaded into LimeLyte® Entity Manager has a unique validation profile assigned to it. That means if you upload a TRN that is specific to a particular country, the platform will first seek to validate its format is compliant with the precise nuances and requirements of that country’s TRN validation criteria.
In selected countries where an API from the national tax authority is available, LimeLyte® Entity Manager will also verify that the TRN you have uploaded is a perfect match for the customer or supplier you are checking.
Crucially, only TRNs that have been validated will be passed to the tax authority for full verification.
Ultimately, this allows LimeLyte® Entity Manager to validate and verify different numbers across dozens of countries – even without the country code prefix or when they are uploaded in a differing format.
Pain 2: ‘We occasionally record TRNs in different ways, which leads to inconsistencies in the country each number is registered to.’
There’s no getting around the fact that you’ll need a country for your TRN to validate and verify it.
When uploading TRN data to LimeLyte® Entity Manager, you’ll have the option of entering a VAT number and a VAT number country.
Entity Manager will firstly scrutinise the VAT number country to establish the country in which the business you are checking is based. But if no VAT number country is entered, the platform will also use the country code of the VAT number itself to establish the correct country.
Occasionally, no country will be established, but in such scenarios Entity Manager still provides you with an error message so you can update the record and next time you upload the data, it will be validated.
Pain 3: ‘We typically check records manually – if at all’.
It can be difficult for tax professionals to accurately check and validate TRNs on a regular basis, particularly when dealing with high volumes of data.
That’s why we designed LimeLyte® Entity Manager to allow users to either upload their data by spreadsheet or via a bespoke interface that we can build.
As data is loaded into the platform, it checks the target instance to see if the record already exists and inserts new or amended records and keeps an audit trail of any changes.
This means there is no requirement to filter the data before loading it into Entity Manager, as Entity Manager manages it for you. All you need to do is run your chosen extract and upload it – the system does the rest.
This will free up many hours for your team, while reducing cost and significantly improving accuracy.
Pain 4: ‘Exporting data from our source systems to verify TRNs is often inefficient and problematic’.
Manually extracting data from each system and running checks on the TRNs within can be extremely time-consuming and laborious.
That’s why we designed LimeLyte® Entity Manager to connect with as many source systems as required. It’s easy to upload data from your ERP, a billing system, a GL extract, SAGE or most other platforms.
Once it’s in Entity Manager, it’s stored in the same place so you can view and manage it from one dashboard. However, it’s still possible to filter it by source to allow you to separate it if you wish or to see what it was originally linked to.
Pain 5: ‘TRNs should be added to our master data but there’s no way to check.’
It’s unlikely you and your team are comprehensively checking the VAT number of each and every one of your suppliers – and it’s almost certain you aren’t checking all your historical suppliers too.
You may even be struggling to capture a confirmation code on a successful verification and log it against the record in your source system, so even if you are checking a VAT number you can’t actually prove it.
We’ve designed LimeLyte® Entity Manager to check every supplier, customer, bank account and legal entity that you upload. It will then produce a report for all those entities for which a VAT number is missing or invalid – and include a reason for this. The report can be sent to the procurement team to get the VAT numbers added.
As soon as these erroneous TRNs are resolved – either by adding or correcting their details – they will drop from the Entity Manager dashboard.
The platform also provides a safety net in the shape of a full audit trail that shows when each issue was first identified, when you requested an update to it and when it was fully resolved.
If any of these pains resonate with you and your team, why not check out our Navan case study to find out how the world’s leading business travel brand deployed LimeLyte® Entity Manager to validate and verify TRNs for its 4,000-plus customers and suppliers each year.