Don''t Forget VAT Compliance

Don''t Forget VAT Compliance

Copyright 2004, Traffic World, Inc.

Your article "Universal Billing" (Traffic World, June 21) offered a good initial overview of the market interest in global and, specifically, European freight payment.

As your article correctly identified, freight payment in a global environment has several unique challenges. But your article missed some of the most important challenges that the industry faces in Europe.

Although financial reporting in multiple currencies is an important aspect of the service, time and experience has taught us that it is actually down the list of real issues. One issue heading that list is the challenge of operating an effective global disbursement process in multiple currencies. The subjects of your interviews seemed unaware of the challenges facing a European freight payment company trying to operate inside of the European banking system. Our experience has shown this is a major issue not to be overlooked.

We receive and disburse funds denominated in euros, British sterling, Swiss franc, Norwegian crone, and Hungarian forints. This is all done through a disbursement function that took years to develop.

However, the most glaring omission is mention of Value Added Tax issues. VAT compliance is easily one of the most critical elements of a European freight payment service. VAT has a profound impact on almost all aspects of the freight payment service including: EDI invoicing practices, auditing practices, general ledger and accounting reporting practices, payment practices, and organizational adoption of freight payment.

Your article briefly cited "language skills" as an important concern in operating a European freight payment function. This is a woefully incomplete statement.

In reality, it is "cultural skills" encompassing not only textbook language but the ability to conduct business in your customers'' and their carriers'' native tongue and culture. Our experience has shown that a company that simply hires multilingual personnel will have great difficulties and deliver a poor-quality service. True multicultural personnel are available only in select locations in Europe.

For that reason, our research and experience shows that none of the locations mentioned in your article is optimal for a European regional freight payment center.

We commend you for spending the time to touch upon global freight payment. Our clients view it as a very serious part of their business, thus our business, so we felt it important to add more substance to the topic.

Ross Harris

Executive Vice President

AIMS Logistics

Suresh Sainanee

Managing Director

AIMS Europe