For many entrepreneurs, sales tax (also known as the VAT return) is one of those recurring tasks that keeps getting put off until the last minute. Not because it’s unimportant, but precisely because it’s often a time-consuming task. Especially for freelancers and small companies, the VAT return isn’t usually complicated enough to warrant daily attention, but it’s still important to get it right.
Yet in practice, many business owners experience the same frustrations every quarter. Receipts have gone missing, invoices are scattered across different email inboxes, transactions haven’t been processed yet, and the bookkeeping is behind. Before you can actually file your sales tax , you first have to gather all the information needed to file it in the first place.
Why sales tax often takes so much time
Many entrepreneurs assume beforehand that filing sales tax is mostly just a matter of “filling in the numbers.” In reality, the bulk of the time is actually spent on everything surrounding it.
For a sole proprietorship, filing sales tax usually takes entrepreneurs a few hours per quarter. For a corporation, this often takes even longer, as the administration is more extensive and there are usually more transactions to process. But the actual time is rarely spent solely on filing the return itself. Most of it is lost to catching up on backlogs.
Many business owners recognize the pattern. First, all loose receipts must be gathered from coat pockets, email inboxes, or folders. Then, missing invoices must be tracked down and entered into the accounting software. Next, it turns out that certain transactions haven’t been properly categorized yet, or that there are discrepancies between the bank account and the records. Only then is there enough clarity to actually file the sales tax return. The result is that something that should be relatively simple in theory turns into a time-consuming administrative task every quarter.
The traditional solution: working with an accountant
For this reason, many entrepreneurs choose to work with an accountant or bookkeeper. This takes a large part of the technical knowledge and responsibility off your hands, which can be especially helpful if you have little affinity for bookkeeping yourself.
An accountant checks the figures, processes the paperwork, and ultimately files the sales tax return. For many entrepreneurs, this provides peace of mind. At the same time, it doesn’t mean you no longer have to spend any time on it at all.
Even with an accountant, communication is still necessary. Invoices still need to be submitted, missing documents need to be tracked down, and questions about transactions keep coming up. Especially when the records aren’t kept in real time, there’s often a period right before the deadline when everything needs to be finalized.
In addition, the costs of an accountant can quickly add up. For a sole proprietorship, costs often range from €75 to €200 per month, depending on the number of transactions and how much work the accountant handles. For limited liability companies (BVs), this amount is usually higher. As a result, entrepreneurs can easily spend hundreds to thousands of euros annually on their bookkeeping.
This works for many companies, but it often remains a process where records are updated retrospectively rather than being continuously up-to-date.
A more modern approach: real-time accounting with AI
More and more entrepreneurs are therefore looking for ways to structurally simplify their bookkeeping. Not by working harder every quarter, but by organizing the process more intelligently throughout the quarter.
This is where modern accounting platforms come into play. Instead of manually collecting receipts and processing transactions at the end of a quarter, these platforms keep records in real time. Invoices, bank transactions, and receipts are processed automatically, ensuring that the books are always up to date throughout the quarter.
Platforms like Thred use AI agents to automatically handle much of this administrative work. This includes recognizing invoices, categorizing transactions, and flagging missing information immediately when the transaction is made. As a result, sales tax shifts from a recurring quarterly stressor to a process that runs 24/7 in the background.
That doesn’t mean business owners don’t have to do anything at all; they still need to provide missing information. Only now can they do this immediately through channels that are convenient for them, such as WhatsApp. By the end of the quarter, this means they have all the information ready to file their return.
Less time spent on bookkeeping
For most business owners, sales tax isn’t really about the return itself, but about everything that comes before it. The more paperwork piles up, the more time and energy it takes to regain an overview later on.
That is precisely why it pays to think about how you organize your paperwork from the very beginning. Whether you choose an accountant or software that automates a lot of the work, the goal remains the same: spend less time on paperwork and have more time left over to run your business.
