Sales tax management is a complex and tedious activity that’s a significant burden to many businesses.
With thousands of tax regions throughout North America – many of which overlap – and constantly changing jurisdictional boundaries, rates and taxability rules, it’s virtually impossible for most companies to keep up. Businesses that are calculating sales tax manually are wasting valuable time and accounting resources on the complex, error-prone, and non-revenue generating process of sales tax compliance.
In this article, we’re going to explore the benefits of automating your sales tax compliance processes with Sage Sales Tax – Powered by AvaTax.
The Sales Tax Challenge
Let’s first take a closer look at the complexities of sales tax compliance, and then we’ll understand why sales tax automation can hold tremendous value.
By law, most companies are obligated to calculate, collect, report and remit sales tax. Therefore, by definition, it’s a compulsory activity which means that any time and money spent on sales tax compliance are valuable resources that are drawn away from other areas of your business that may be more important to your bottom line.
Even if you invest the necessary time and resources to manually calculate sales tax and file the appropriate returns, it’s an extremely error-prone process which makes it difficult to achieve 100% accuracy. Therefore in addition to the time and money spent on manual compliance, you may be vulnerable to fines, penalties, and interest charges.
Here are a few of the complications that make accurate sales tax compliance so challenging:
- More than 12,500 tax regions across North America
- Constantly changing rates and boundaries
- States are considering rules that establish sales tax responsibility for companies doing business in another state – even if you DON’T have a physical location there.
The Power of Sales Tax Automation
Sales tax may be inevitable, but the hassle doesn’t have to be. By leveraging the power of automation, Sage Sales Tax can eliminate the tedious work and complexity associated with calculating, collecting, reporting and remitting taxes in multiple jurisdictions—reducing the risk of penalty in an audit while saving money and improving organizational productivity.
It’s a hosted web-service-based solution that runs behind the scenes of your Sage 100 ERP so you use the same order entry and customer screens that you’re already accustomed to. It automatically performs address validation, sales tax jurisdiction research, rate calculation and updates.
Detailed Reports Make Life Easier
Fully detailed reports including taxable sales, discounts applied, exempt sales, and out-of-state sales make it easy to quickly and accurately reconcile your tax liability. Having a consolidated set of reports also provides added protection and peace of mind in the event of an audit.
The Bottom Line
With Sage Sales Tax, you get the benefit of a sophisticated ‘big business’ sales tax engine for a small business price. You’ll streamline order entry and remittance processes without stretching your internal resources or burdening your accounting personnel. It can be the best technology investment your business will make this year.