Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Ah, yes, but if you have a reasonably sizeable VAT, then people have an incentive to keep a paper trail. Otherwise, they might find that the VAT that other people have invoiced as having paid to them exceeds their own markup. Which would be bad for the continued viability of their business as a going concern.

Besides, you can't borrow against future cash flow without paper trails. So large and medium-sized firms have an incentive to keep an audit-able paper trail. Particularly if you audit the banks to make sure that the money they issue is backed by an auditable future cash flow.

Small business have cashflows in cash. But small businesses don't do control fraud or aggressive accounting. They do conventional man-with-suitcase fraud, or simply don't disclose their incomes.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Apr 25th, 2011 at 12:03:18 PM EST
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