When a large corporate loses input credit, the loss almost never comes from one bad decision. It accumulates through small gaps in ownership — points where a task belongs to procurement in practice, to accounts payable on the org chart, and to the tax team in consequence.
The leakage is not hidden. It is unowned.
1. Vendor filings that were never reconciled at invoice level
Summary-level reconciliation will tell you the totals roughly agree. It will not tell you which specific invoices your vendor failed to report, which is the only level at which you can act — by withholding payment, by following up, or by writing the credit off deliberately rather than by default.
2. Credit blocked by documentation, not by law
Eligible credit gets reversed because the supporting document was incomplete at the time of review. The transaction was fine; the evidence was assembled months later by someone who wasn't there.
3. Job work and movement of goods
In manufacturing, credit chains break at plant boundaries. Goods move, documentation follows late, and the timing mismatch is resolved by reversing rather than investigating.
4. Credit notes issued commercially, not fiscally
A commercial team agrees a rebate. A credit note is issued. The tax treatment is applied to a different period, or not at all, and the position on both sides stops agreeing.
5. Refunds nobody owns
Export refunds and inverted duty accumulations sit as balances rather than as receivables. No role has the filing on their calendar, so the balance grows until someone treats it as a project.
6. Rate and classification applied inconsistently across entities
Group entities take different positions on the same transaction type, usually because each was decided locally at different times. Whichever position is wrong, one of them creates exposure and the other creates lost credit.
7. Reconciliation performed but never reviewed
The most expensive failure of all. A reconciliation is produced monthly, filed, and never read. Breaks age for years inside a control that technically exists.
What to do about it
- Reconcile at invoice level, monthly, with a named owner and an escalation rule
- Capture documentation at transaction time, tied to the transaction record
- Put refund filings on the compliance calendar with an owner, like any return
- Standardise classification positions across entities and document the reasoning
- Review reconciliations. A control nobody reads is not a control
