The waters of sales tax are murky. Navigating them, as evidenced by Nichole Peterson and Chatmeter’s story, is tricky. And if you’re not careful, they could even be life-threatening to your business.
I can hear my haters now: But, Tabatha, manually staying sales tax compliant is SO manageable.
Well, yeah, it is. But only up until a certain point.
Once your company begins to expand into multiple territories, whether it’s states and/or countries, it’s a different story. At that point, if you’re still doing sales tax compliance without the help of technology, you’re asking for trouble.
But avoiding compliance headaches isn’t the only benefit of sales tax software—giving time back to your finance team to focus on other tasks is just as important, too. “Let’s allow our finance and accounting individuals to put out fires elsewhere and not bang their heads against the wall filling out returns back to the states. Yes, there’s some states’ returns that are very easy and simple, and then there’s other complex returns that can take hours out of your day to manage,” says Sam Blass, Sales Executive at Avalara.
With that, let’s get into how tech solutions keep you compliant and ease the burden of sales tax compliance on your finance team.
How sales tax compliance tech works
Every solution is different, but since we sat down with two of our friends from Avalara, they explained everything in reference to what they know best. Which is, of course, Avalara.
However, regardless of what your solution is, you should always start with understanding your nexus. Having that basic understanding down is crucial in getting the most out of a sales tax compliance software.
From there, it’s all about letting your software take sales tax compliance off your plate.
As Sam explains:
“Leveraging a solution like Avalara allows a software to track your sales activities and any future obligation to register and collect new sales taxes. In the first episode, we talked about the complexities of local jurisdictions and aligning tax codes to zip codes and how there’s not a clean overlap there. So, leveraging a solution like Avalara allows you to get a little bit more granular detail in regards to a rooftop-level calculation, so you’re tracking your business activities for future expansion, to ensure that you’re collecting everywhere you need to, you’re allowing a team of experts to manage the content, the rules, and legislations that go into these tax laws to accurately calculate your tax rates based on the products and services that you sell. And then automating the remittance of that back to the states as well.”
Keeping up with ever-changing sales tax laws with software
As discussed in the first episode with Sam and George, there are a lot of weird and wacky sales tax laws.
To add to the confusion, they vary from country to country, state to state, and even jurisdiction to jurisdiction.
And not only that, but they change a lot, too.
“As I mentioned in the last podcast, there were 32,000 changes in the last couple of years alone,” says George Padilha, Senior Strategic Alliance Manager at Avalara. “The reason why is because there are 12,000 different taxing jurisdictions.”
So, how in the world are you supposed to keep up with all of that? (I’ll admit, even with the help of software, this sounds daunting at face value.)
But, as George explains, Avalara takes care of it all quite easily.
“In terms of technology, in helping advance and solve your sales tax problems, Avalara really does have a competitive advantage because we were built on the cloud and we have real-time updates as sales tax changes happen,” says George. “So, by having us update in the cloud, it just makes everything a little more fluid and easier. Not to mention the fact that we have over a thousand connectors and bundles as well that can seamlessly connect a NetSuite ERP to something like an ecommerce store or a CRM, like Salesforce. So we can connect everything seamlessly and have a full picture of a solution for you in automated sales tax.”
Listen to the podcast to discover all the ins and outs of using tech to simplify sales tax compliance
Check out the full episode with Jake Jones, Multimedia Producer at Zone & Co, Sam, and George to discover:
- What life looks like for companies with seamless tax compliance
- Why companies should use a tech solution for sales tax compliance
- How sales tax compliance often ends up on the back burner at companies
Quote of the episode
On why companies should use software to automate sales tax compliance:
“Have your finance department do something more productive, like streamlining your accounts receivable department or streamlining your accounts payable department, or trying to figure out a go-to-market strategy on a new product within a certain demographic. That’s a more revenue-generating activity that would be a little more beneficial to any of your clients.” – George Padilha
Listen to the full “How technology can simplify your sales tax compliance” episode here or wherever you get your podcasts.