Every opportunity you miss to create income or save money, is as important as making money for your organisation. What are you doing to make or save money for your organisation?

Let’s look at a practical example. If you pay your VAT too early you lose the opportunity of earning interest on that money, right?

So, let’s say you can legally delay the payment of R100m for one month to SARS, that is approximately R600 000 interest which you would save.

Let’s say you do not delay the payment that you are legally entitled to you would be missing out on the opportunity of saving R600,000 in interest.

What you should do, is increase your bottom-line profit by an extra R600,000 just by claiming late captured Inputs.

Over 12 months this saving is over R7 Million.

If you are a smaller organisation this amount would be less but may still be significant.

On average 50% of Vendor inputs are captured late and not included in the VAT period they should be claimed in.

How do we calculate the potential saving for your organisation?

  1. What is the average Input Tax for the year claim as per your VAT201? ie. R50 Million
  2. Then divide this by two: R25 Million
  3. Times by Prime Interest rate @7.25% giving an estimate annual saving: R1.8 Million
  4. Divide by 12 gives you a monthly saving: R150 000

Would you like to save up to R150,000 every month and make money for your organisation?

If you have any questions, let me know in the comments below and until next time – ask yourself how you can make money for your organisation?

Alan Sutton
CEO VATSolve 

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