How to collect VAT IDs during the sales process
To collect the right data at scale, you’ll have to consider the most efficient way to gather VAT IDs from new customers. This will depend on your business model and the tools your company uses during the sales cycle. For many SaaS businesses, a combination of self-serve and sales-assisted processes will be necessary.
For a self-serve sales motion:
Companies typically collect VAT ID numbers from customers as part of a new account signup, or during the checkout process. The VAT IDs are then stored with the customer account for future use, so the customer does not need to input their ID for every transaction.
Each country has a specific format for their VAT ID numbers, and some require additional VAT ID validation checks to combat fraud. Some countries, such as the UK and EU, require VAT IDs to be validated on government databases, where in other countries a format validation is best practice.
Some companies choose to implement a country dropdown option for the customer VAT ID collection object. This can be useful for organizational purposes, but is more work to implement.
If you are using a sales tax platform, it should be able to store and validate VAT ID numbers for you, while integrating with your billing system and checkout flow.
For enterprise sales where the customer is working directly with a sales rep:
VAT IDs can be collected at the time of sale by the rep on the sales form. The ID number then needs to be added to the customer account.
You'd need to work with your sales team to build this VAT ID collection into the sales motion, and also educate the sales team on the importance of collecting this information.
Here’s some sample language you could use to communicate the requirements to your company’s sales leaders:
As part of expanding sales globally, we will start seeing more queries from non-US corporate customers about VAT IDs. For many countries outside of the US, collection of this VAT ID at the time of sale means that no tax is charged on these B2B sales. This is standard protocol for many enterprise customers located in countries like Germany, the United Kingdom, or Australia, among many others.
In order to present a professional and compliant sales process to customers—and reduce [COMPANY]’s unnecessary liabilities in the process—the team is proposing a combination of the following:
- One-time outreach campaign to collect VAT IDs for existing customers
- A new ongoing process to collect VAT IDs on order forms
- [Alternatively] A simple VAT ID form link for reps to share in the sales process
Collecting VAT IDs from your existing international customers
The earlier you start collecting VAT IDs from your customers, the better. But it’s likely that you’ll need to fill in at least a few ID numbers for customers you’re already working with.
Work with your team to identify and reach out to existing business customers located outside the US. Here’s a sample email you can use—you’ll want to point customers to a form or page in your product’s settings where they can enter their ID numbers directly.
If you are receiving this email, you are listed as your organization’s primary billing contact. To ensure accurate invoicing, we conduct periodic reminders to ensure that all customers have provided us with appropriate VAT IDs. If you have a VAT ID number, please submit it here.
We’d recommend sending the message from a familiar company email address with clear branding to reinforce official company comms. Businesses based in countries with VAT regimes will be familiar with the reporting requirements, so your request shouldn’t take them by surprise.
Collecting VAT IDs is an ongoing effort, just like accurately capturing address information from your customers. It’s best practice to store the VAT IDs you collect in your billing system, for ease of reference and integration with other tools in your financial stack. That way, when you’re ready to start taking more steps toward VAT compliance, you’ll be ready with the right data in place.
