Cloud technology is a powerful tool and gives businesses a vast amount of flexibility and versatility in their infrastructure for all aspects of business ranging from cybersecurity to sales. However, there are a lot of “cloud” providers who don’t really use cloud infrastructure. They use the same old systems that were built for on-premises solutions wrapped in an API that feeds into a cloud. The system itself and the infrastructure that backs it are very much the technology of old wrapped in a pretty bow.
Despite being in the “cloud” it still requires costly maintenance and a patchwork of solutions whenever a new problem arises it is not built to solve. These costs are passed onto you to the customer, all without the flexibility of modern technology as their “cloud” is unable to adapt without additional patchwork integrations. This is especially true when it comes to the sales tax automation space, the technology is built on either old systems or an old system glommed onto a cloud solution.
There must be a better way, right? There is, CereTax is a true cloud solution for sales tax automation that is built within the cloud. There is no server space you pay for, integrations are seamless, and it’s built to scale. Think of it like this, CereTax scales like an automatic transmission, no need to use a clutch to change gears as it speeds up and slows down as needed when processing transactions. Previous iterations of tax technology require you to switch gears and then every few miles you realize you also blew out a tire. If you’re a high-volume enterprise, it’s more akin to paying for a rental car instead of just getting the car yourself. Each time you push those high volumes like every time you rent a car you pay up, with CereTax the solution or the “car” in this analogy is yours to drive as fast you can without paying for a rental (i.e. dedicated instance).
The lack of server maintenance and constant iterations means you’re not paying for hidden costs and you’re getting a streamlined technology like you use for most other modern software systems. The large 200lb HD TV’s cost $2,000 over a decade ago but nowadays you can get a far lighter and clearer TV for a quarter the price, CereTax adapted that same mindset to the sales tax automation arena. It allowed us to improve the quality of the solution AND decrease the costs to the end user. So next time you are talking to your sales tax vendor ask them, ask them if their tax software is truly a cloud software or is it a cloud attached to an antiquated system disguised as a cloud.
If you want a sales tax automation platform that doesn’t lag behind your business’ other true cloud software systems and create unnecessary risks whether for downtime or security, then you need CereTax.
CereTax P2P revolutionizes use tax for purchases.
Results
Tax Challenges
A leading manufacturer utilized a legacy tax platform for determining and calculating sales & use tax variances on purchases. Tax department leadership was concerned about accuracy, lack of control over the rule configurations, risk associated with outdated content, and the high cost of the solution.
Need to Gain Confidence in Sales and Use Tax Determinations and Calculations
The company realized that the legacy tax platform’s back-end was unable to update content associated with “custom tax codes”. A custom tax code is set up when delivered content is not sufficient to properly determine taxability. Custom tax codes do not get updated. Therefore, when a rule or law change is initiated it’s up to the client to notify the previous provider of the change. The tire manufacturer’s tax resources were not monitoring for these changes. Thus, numerous errors existed exposing them to audit deficiencies in multiple states.
Need for Updated & Secure Technical Platform
Another concern that the tire manufacturer had was the legacy tax platforms outdated technology. The legacy tax platform runs in a 3-tiered client/server architecture presented over the web using a Citrix wrapper with a PowerBuilder UI. The legacy tax platform was also not SOC compliant. CereTax alleviated all their concerns by providing a solution that was developed using the latest technology which makes it the most secure and compliant platform on the market.
CereTax P2P Solution
CereTax was able to streamline the rule configuration from over 1,500 tax policy rules (many of which were redundant) to under 200 rules resulting in a much more manageable configuration. More importantly, the CereTax rules are mapped to proprietary “PS Code” taxability content that is updated every month. CereTax’s “PS Codes” were comprehensive to cover all the manufacturer’s tax determinations without the need for custom codes. This essentially eliminates the tire manufacturers' audit risks and puts them in complete control of their rule configurations.
Let’s face it, no one enjoys dealing with tax compliance. Compliance can be complex and the consequences of not doing it properly can have drastic effects on a company both financially and in a company's valuation. When it comes to compliance, there are four main components: registrations, tax calculation, billing, and filing/remittance, with three of the four components relying heavily on the tax calculation side. Tax calculation is what makes sure the correct amounts, as well as the right legal descriptions, appear on the invoice. The tax calculation platform is also what tells the compliance vendor how much to remit to the various taxing authorities. With something so fundamentally important to a company’s success, don’t you think it makes sense to have some checks and balances in place?
The three main reasons some companies choose an all-in-one solution is because they want one invoice, it may be cheaper sometimes, or they want to set it and forget it. However, consolidation of billing to make your life easier is very different than relying on one vendor having total control over your company’s compliance process. One makes a ton of sense, the other eliminates the checks and balances we spoke about earlier.
Think about it. The compliance vendor knows your business intimately. They know what products you sell, and they usually have a hand in determining the right way to treat these products from a taxation perspective. They should also periodically review whether you had a change in your business that predicates a change in your tax policy. Most of all, they know what data they are expecting to see when filing your taxes, and they are the ones who will represent you should an audit situation arise. If your compliance vendor also owns the software that calculates the taxes, and they identify an error or the data is inconsistent, are they motivated to bring this to your attention and point the finger at themselves? Does the filing team have the ability to choose another calculation platform to support you? Conversely, what if the calculation platform is providing all of the right data, but there is a breakdown in the filing process and dates are missed?
Splitting up the process between multiple vendors helps ensure that the data is consistent and keeps your company honest by filtering information through several different parties and/or individuals. Usually, when there is a problem with compliance it is one of the components, not all. Having your tax calculation platform disconnected from your compliance vendor gives you the flexibility to switch either component, at any time, if a problem arises, with less disruption to your business.
In summary, if you are leaning towards the one-provider approach, make sure you evaluate the potential impacts to your business.
o What if your tax calculation software is not being improved or maintained but you have a great relationship with your compliance filing team?
o What if your business expands and you have outgrown your automation software but you have a great relationship with your compliance filing team?
o What if your compliance filing vendor misses critical filing dates or returns but your automation software is embedded in your finance package and working effectively?
o What if you feel like you need better or different legal or compliance advice?
o Think about it this way, would you want to have to change your accountant just because you outgrew QuickBooks, or changed financed packages?
It is critical that the software platform and the compliance filing vendor have a close-knit relationship and it is not uncommon for these processes to be sold in tandem. Purchasing one or the other through a bundled solution can often yield discounts on the services as a whole and provide the ease of one invoice. Just ensure you have the flexibility to bifurcate the relationship if needed. This will ensure that both parties are holding up their end of the process and still maintain the checks and balances that will protect you in the long run.
Reach out to CereTax today to have a discussion with us or any of our industry-leading partners to discuss your compliance needs!
