Feature

Forestry Commission uses web system to improve VAT recovery

The Forestry Commission, the government department responsible for managing the UK's woodlands, has dramatically cut its costs and improved its VAT recovery seven-fold by replacing its manual expenses system with expenses management software.

The Edinburgh-based body employs more than 3,000 people, from the board of commissioners, to rangers and foresters, and has an annual employee expenses bill of more than £2m.

The commission implemented the Employee Expenses Management Module from CedarOpenAccounts, integrating it into the CedarOpenAccounts' eFinancials core financial management system, which the commission had been using for eight years.

The roll-out has been particularly protracted, partly due to the remoteness of some locations. The project began in April 2005 and is now approaching its final phase.

The expenses system replaced costly and inefficient manual processes, whereby employee expenses had to be signed off by line managers before going to the finance team. It required the original paper-based submissions to be completed by employees and accompanied by receipts. The expenses then had to be processed through the finance system.

"Under the manual system, we only claimed back about £4,000 in VAT from a total expenses bill of £2m," said Steve Atkins, head of finance systems at the Forestry Commission.

"With the CedarOpenAccounts system in place, we expect to be much more efficient in our VAT claims, particularly for expenses such as hotel bills. Early indications show our VAT recovery is seven times greater than the manual system, and we expect this to make a significant contribution to our return on investment."

The automated web-based system allows employees to input their own expenses. The software then automatically transfers the data to the accounts department for processing.

The Commission also introduced self-approval, with pre-determined expense limits. The Commission checks 10% of the claims, rather than 100%, and this has cut the time and cost of processing and approving claims, said Atkins.

Staff still need to produce receipts to accompany the claims and back up VAT reclaim, but these are retained at local offices, and the rest of the process is now electronic.

"We have already seen quantifiable improvements in terms of the accuracy of claims, along with reduced processing costs by about 60%. In addition, we have a single electronic record of each claim, which has helped us with our analysis and reporting, revealing further savings."


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This was first published in January 2006

 

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