In the era of global business, corporations face the daunting challenge of catering to diverse markets while maintaining a consistent global identity. One of the most pressing challenges pertains to finance and invoicing operations. It is one that the Navan Expense product and finance teams obsess over to ensure an experience that is unlike anything else on the market.
To illustrate the challenge and opportunity in tailoring nuanced fintech products for product-market fit when entering new territories, let’s look at Value-Added Tax (VAT), a ubiquitous tax structure in EMEA.
Complexity is an understatement when considering VAT, especially in the travel sector. Not only do businesses need to adhere to standard VAT rules, but they also need to navigate layers of regulations, each tailored to a specific type of inventory and jurisdiction. This makes invoice availability crucial in this market.
Generally, if the VAT paid is related to the operation of a business, many companies may reclaim that amount. A simplified example is if a business-related purchase includes 20% VAT, companies reclaim that from the tax authorities in the respective jurisdiction under certain circumstances. Generally, a basic requirement for VAT reclaim is to have a valid tax invoice that meets specific criteria set forth by the tax authorities.
If a TMC buys and sells inventory in its name, customers lose the ability to reclaim VAT. A company may only reclaim VAT when the TMC is the agent and the invoice is issued directly from a supplier.
To help support customers’ applications for VAT reclaim for travel and accommodations, Navan acts as an agent for qualified travel and accommodations.
Even seasoned tax experts sometimes aren’t familiar with the nuances of travel VAT unless they’ve dealt with it directly. As a result, there’s a genuine need for expertise and significant customer awareness to help navigate the intricacies.
This level of detail is vital for our business model. When a product is designed and conceptualized in a particular market, it must go through specific iterations to make it valuable and user-friendly in local markets.
Navan Expense has strategically positioned itself at the forefront of this European challenge. You can access the airline invoices/receipts directly on our platform.
To ensure that the customer does not lose the VAT on applicable hotel invoices, our Expense solution offers the ability to have the traveler seamlessly upload the hotel invoices. Alternatively, we’ve introduced an invoice collection service, enabling us to collect hotel invoices on the customers’ behalf when the customer wants to reclaim VAT.
Since most business expenses stem from travel, integrating travel data with expense data is invaluable. Navan Expense understands this synergy.
With Navan Expense, customers can upload invoices directly to the platform and itemize the information. While Navan does not provide all invoices nor function as tax software, its seamless integration of travel and expense, complemented by features like corporate cards, enhances the power of the full solution.
Navan also focuses on developing a robust back office and invoicing system to assist finance teams and admins. While many competitors make grand promises, the industry’s intricacies mean that not everything can be “glamorous.” Some competing solutions might even inadvertently hinder their clients from VAT reclaims or restrict them with limited inventory options.
Navan’s approach is rooted in the real-world intricacies of the industry to produce a robust product-market fit. Navan automates and streamlines the process as much as possible by offering a comprehensive platform that centralizes all tools and functions. Navan’s approach aims to be straightforward and transparent, so finance teams have optimal tools, especially for tasks like VAT reclamation.
If one thing defines the future of global finance operations, it’s user-centricity. The goal of technology is to transform the dense forest of tax regulations and invoicing procedures into a user-friendly experience.
Behind the scenes, there might be numerous complex local tax regulations to navigate for the customer, but the software they use must feel smooth and intuitive for the end user. It should seem like the product is performing magic in the background by adhering to every necessary standard. This simplifies the user’s experience and gives finance administrators comprehensive tools for maximum visibility.
At Navan, we see ourselves as ambassadors, prioritizing education for the account management and sales teams on the front lines of customer communication. This deep understanding helps when they interact with the finance departments of potential clients or existing customers. By offering detailed information and transparency, clients face no surprises when they onboard with Navan.
Navigating the world of global invoicing, especially with ever-evolving tax regulations, is no small feat. However, Navan Expense is pioneering the way forward with an unwavering focus on user experience, technological integration, and a deep understanding of local nuances.
Take a demo with Navan Expense today and see how this revolutionary technology can help your finance team automate even the most challenging parts of business.