Save Thousands with Tax Automation Software
How many times do you look up a sales tax rate and before applying it to an invoice? If you are selling products to customers in different locations, you’ve probably spent a reasonable amount of time looking up taxes. This can become time drain.
The appropriate tax automation software will help you automate the application of local taxes, the preparation of tax returns and the management of tax exemption certificates. A tax system consists of a database of all applicable tax rates. These tax rates are constantly updated to ensure their accuracy. This will automate manual tax and accounting processes freeing up tax teams so they can focus on strategy and value-add initiatives.
“Using tax automation to ensure compliance is one of the best things you can do for your company. If there is an audit or a financing event, exit or IPO, being clean and consistent and having an auditable record is of the utmost importance.” – Lisa Sherwin, CFO, VentureBeat
According to the U.S. Census Bureau report, state tax revenue was up 5.21 percent. General sales tax revenue followed that trend by increasing to $72.1 billion from $69.3 billion above the same quarter in 2009 – an overall 4 percent increase.
Automate tax returns with tax software
Once taxes are charged to a customer, you are required to file tax returns. Preparation of these returns can turn into a nightmare, especially if you’re selling products across state or provincial borders. The good news is that tax software will automate the preparation and filing of these returns. The entire process can be accurately completed within minutes.
Manage tax exemption certificates
An often omitted attribute of tax compliance is the management of tax exemption certificates. However, if you’re facing an audit, improper management of your customers’ exemption certificates can cost you large sums of money. Many tax packages have methods for electronically tracking these tax exemption certificates. You will be able to set triggers to alert you when tax exemption certificates expire. This will ensure that you are not making tax free to customers without valid exemption certificates. When an audit comes you will not be forced to spend the time finding and organizing your customers’ tax exemption certificates.
Deployment of tax automation software
Tax automation software is completely flexible in terms of deployment options. Many ERP packages have tax modules available as an integrated piece of the software. If your ERP system doesn’t have a tax module, there are a number of standalone tax systems. These systems can communicate with other software to ensure that the management of taxes is as efficient as possible.
Infographic: Tax Automation
The bottom line
To manage tax receipts and collection is a massive time suck. Automating your sales tax compliance process from calculation to remittance ensures a consistent, repeatable process that is auditable. Businesses that ship to customers on anything approaching a regular basis should consider putting some tax automation software in place.