Sales tax automation and ERP: An integrated approach
Sales and use tax is a complex area for business compliance. Sales tax requirements differ from those for income tax, meaning that organizations are obligated to collect and remit sales tax based on their transaction types, rather than their profitability. Additionally, rates and collection procedures vary by state, county and local jurisdiction.
For businesses with multiple locations—or selling to customers in multiple locations—keeping track is complicated. Add in the potential for significant nexus-related changes stemming from the Marketplace Fairness Act and other legislation around online sales and use tax, and it is clear that companies need to pay close attention to sales tax processes and compliance. This is where automation can help.
Most enterprise resource planning (ERP) systems, including Microsoft Dynamics Business Solutions, don’t offer end-to-end tax compliance right out of the box. Integration with a sales and use automation tool is often recommended, which is why our ERP team and our sales and use tax automation team are partnering to provide integrated sales and use tax consulting to our Dynamics clients.
Together, we can help you determine the best tax automation solution for your needs, provide the detailed tax technical advice to customize the implementation and design a seamless integration with Dynamics. To demonstrate our commitment to providing best-in-class tax, accounting and consulting services to the middle market, we have partnered with Avalara and Vertex SMB, two of the leading sales and use automation platforms for small and medium-sized business. Of course, we will work with you to consider all options and determine the best choice for your business needs.
How can you gauge whether sales and use tax automation will benefit your company? Some questions to ask:
- Do you currently collect sales or use tax? Will you in the near future?
- In how many states are you currently registered to collect sales and use tax?
- Into how many states do you sell or ship?
- Do you sell products or services outside the United States?
- How are you tracking and capturing changes to the sales tax rate in all relevant jurisdictions?
- Do you have consumer use tax needs?
- Do you utilize an ecommerce application for online sales? How is taxation handled for products and customers (fully taxable, reduced rate, exempt)?
- Are you comfortable with your sales and use tax audit risk profile?
If you would like to explore the implications of your answers to the above questions, let us know. We’ll bring together the right team to assess your situation and determine whether new sales and use tax automation or an update to your existing processes is recommended.