Sales tax compliance involves a highly complex set of rules and regulations. These rules change frequently in many jurisdictions, and the question of whether (and how) your company needs to collect and remit sales tax to a certain jurisdiction can be quite difficult to determine.
Many companies believe that when going with a sales tax automation option everything is taken care of. However, relying only on automated software to determine and manage your sales tax obligations could come at a risk.
For many businesses, software can serve an important purpose in the compliance process. Businesses need a way to calculate the correct sales tax to charge in states where they have a sales tax obligation, and for this, it’s a great solution, but what about the rest of your process?
Why is it not enough?
Sales tax software on its own may seem like a workable solution. However, there are gaps that you need to account for when using an automated solution. A main one being time.
In using one of these automated solutions, you will need to assign a staff member to act as your in-house sales tax manager. Ideally, this in-house resource will need to be knowledgeable in sales tax in order to close the gaps that the automated solution cannot.
While you might think you are outsourcing the sales tax compliance process when you use an automated solution, you are not. When you need to have someone on staff with that amount of knowledge and skill to manage software you are paying for, is it really worth it? Simple software solutions may look like a good deal on the surface, and are often chosen because of their cost savings, but they can open a company up to the possibility of liability, risk and penalties if not managed closely. It is important to understand that a “set it and forget it” mentality with automation can lead to errors and failed returns.
Automation does pair very nicely with an experienced service provider though. If you work with a specialist like TaxConnex, you can relax and let our experts manage your obligations outside of rate calculation. A software system simply cannot keep up with the ever-shifting patchwork of sales and use tax, or give the hands-on support that is needed to keep up with the on-going maintenance and care of sales tax filings. Trusting your sales tax future to TaxConnex will bring you peace of mind and ensure that you are complying with all state and local regulations.
Learn more in our whitepaper – Sales Tax Automation flaws!