For companies in complex industries, having an effective procure-to-pay (P2P) tax platform is critical to ensuring they are remitting the correct amount of sales and use tax on purchases. However, some older tax solutions aren’t built to catch on to the nuances that exist between application of sales and use tax on a sales transaction versus the purchase transactions. This often results in overpayments or underpayments. At scale, this can be an expensive oversight.
But first, let’s cover our bases.
What is a procure-to-pay system?
A procure-to-pay system, sometimes referred to as a purchase-to-pay system, is an integrated process created to support end-to-end transactions. This process is full of objective and subjective determinants. Structured and unstructured data that can be leveraged to determine the true nature of a transaction, which ultimately drives taxability.
It begins with goods and service requisitioning and ends with ready-to-pay files uploaded into your accounts payable system. There are a lot of moving parts within this process, and it requires a high level of teamwork between tax teams, IT, procurement and account payable teams. Without this collaboration, there is a significantly increased risk for discrepancies. In turn, audit risk increases as well.
Payment Discrepancies Happen…
The process of tax research and updating financial systems takes up a considerable amount of time and resources from in-house tax and IT teams. A typical P2P process can be filled with paperwork, process gaps, compliance issues and back and forth. It’s time-consuming and can be complicated. Even if the system is digital and frequently updated, it’s not always precise enough for today's ever evolving tax landscape. Meanwhile, tax authorities are increasing audit activity.
Getting tax calculations wrong within this process not only drains money from your business, but it can also incur tax penalties and interest, increases your audit exposure and more.
Procure-to-Pay Tax Automation Platform
Integrating a tax platform automates sales and use tax to improve the accuracy of taxes paid and accrued. How? Through a rule-based calculation engine. It applies constant tax logic across the procure-to-pay process, ranging from the requisition and purchase order page to the invoice reconciliation and approval stage.
This eliminates inconsistencies and human errors within the system. Adding a tax platform for your procurement process will reduce the burden and cost of continuous in-house research. Moreover, there will be less IT support needed to implement tax changes as this can now be managed by tax specialists.
Integrating a tax platform can maintain consistent tax coding which results in a reliable and repeatable process. Furthermore, you cancoordinate that single tax solution to your financial systems across the board for scalability and centralization.
You may want to consider automating your procure-to-pay process tax platform if:
· It is a challengefor your in-house team to keep up with the constantly changing tax
· Inefficiencies arise due to errors in tax coding decisions
· Increased audit activity reveals tax errors in procurement
· You are dealing with insufficient tax functionality in your ERP
Benefits of a Tax Platform in Sales & Purchasing
Create a Simplified Process
When utilizing a single tax platform for sales and purchasing you will see improved tax accuracy which will result in reduced audit risk. Not only will you spend less time on tax research and content maintenance, you will also experience a more reliable AP process with consistent tax coding.
Improve Supplier Relationships
Connecting with all your suppliers about shared data and documents becomes simple. It will also increase on-time payment performance by providing real-time visibility on transactions.
Increase Control and Minimize Risk
Improve strategic decision-making by providing a comprehensive view of your suppliers and spending from a centralized place. Through this you will be better able to control expenditure and minimize risk by having access to data.
Finding the Right P2P Tax Automation Platform
When it comes to finding the right P2P automation it’s imperative you ensure your choice is flexible and built to handle the nuances that accompany sales tax compliance.
The primary goal of an effective P2P tax platform should be to eliminate errors and ultimately avoid underpayments or overpayments of tax. The focus needs to be not just on the sales side of the business but on the procurement side as well. Keep in mind, most tax solutions don’t calculate a “variance”.
Many tax platforms calculate the tax, but don’t compare it to what the vendor charged. In fact, only CereTax returns the “variance” calculation to identify the over/under payment.
Usage matters
Oftentimes, usage variables involved in the P2P process are overlooked. Purchase-side taxability is more complex because usage variables are more subjective.
This subjective side lends itself to overpaid or underpaid tax. Vendors don't always know their customers are using the products they’re selling, often the vendor will default to taxing the good or service which results in overpayments.
What Sets CereTax Apart
When a company is audited by a state auditor, 90% of the examination will focus on purchase transactions. Same with a reverse audit looking for refunds. Whether it’s an overpayment or an underpayment, it’s an expensive problem to have.
Give us 30 minutes and we will show you CereTax’s indirect tax solutions can save you
countless hours and reduce risk when dealing with sales tax.
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https://simfoni.com/procure-to-pay/
https://simfoni.com/procure-to-pay/
https://kissflow.com/procurement/procure-to-pay-process-guide/
A procure-to-pay system, sometimes referred to as a purchase-to-pay system, is an integrated process created to support end-to-end transactions. This process is full of objective and subjective determinants. Structured and unstructured data that can be leveraged to determine the true nature of a transaction, which ultimately drives taxability.
It begins with goods and service requisitioning and ends with ready-to-pay files uploaded into your accounts payable system. There are a lot of moving parts within this process and it requires a high level of teamwork between tax teams, IT, procurement and account payable teams. Without this collaboration, there is a significantly increased risk for discrepancies. In turn, your audit risk increases as well.
The process of tax research and updating financial systems uses a considerable amount of time and resources from in-house tax and IT teams. A typical P2P process can be filled with paperwork, process gaps, compliance issues and back and forth. It’s time consuming and can be complicated. Even if the system is digital and frequently updated, it’s not always precise enough for today's ever evolving tax landscape. Meanwhile, tax authorities are increasing audit activity.
Getting tax calculations wrong within this process not only drains money from your business, but it can also incur tax penalties and interest, increases your audit exposure and more.
Integrating a tax platform automates sales and use tax and value added tax determination to improve the accuracy of taxes paid and accrued. How? Through a rule-based calculation engine. It applies a constant tax logic across the procure-to-pay process, ranging from the requisition and purchase order page to the invoice reconciliation and approval stage.
This eliminates inconsistencies and human errors within the system. Adding a tax platform for your procurement process will reduce the burden and cost of continuous in-house research. Moreover, there will be less IT support needed to implement tax changes as this can now be managed by tax specialists.
Integrating a tax platform can maintain consistent tax coding which results in a reliable and repeatable process. Furthermore, you can coordinate that single tax solution to your financial systems across the board for scalability and centralization.
You may want to consider automating your procure-to-pay process tax platform if:
When utilizing a single tax platform for sales and purchasing you will see improved tax accuracy which will result in reduced audit risk. Not only will you spend less time on tax research and content maintenance, you will also experience a more reliable AP process with consistent tax coding.
Connecting with all of your suppliers about shared data and documents becomes simple. It will also increase on-time payment performance by providing real-time visibility on transactions.
Improve strategic decision-making by providing a comprehensive view of your suppliers and spending from a centralized place. Through this you will be better able to control expenditure and minimize risk by having access to data and visibility.
When it comes to finding the right P2P automation it’s imperative you ensure your choice is flexible and built to handle the nuances that accompany sales tax compliance.
The primary goal of an effective P2P tax platform should be to eliminate errors and ultimately avoid underpayments or overpayments of tax. The focus needs to be not just on the sales side of the business but on the procurement side as well.
Keep in mind, most tax solutions don’t calculate a “variance”. Many tax platforms calculate the tax, but don’t compare it to what the vendor charged. In fact, only CereTax returns the “variance” calculation to identify the over/under payment.
Oftentimes, usage variables involved in the P2P process are overlooked. Purchase-side taxability is more complex because usage variables are more subjective.
This subjective side lends itself to overpaid or underpaid tax. Vendors don't always know the usage variable when it comes to their customers' purpose of purchase, and often the vendor will default to taxing the good or service which often results in overpayments.
This subjective side lends itself to overpaid or underpaid tax. Vendors don't always know their customers are using the products they’re selling, often the vendor will default to taxing the good or service which results in overpayments.
When a company is audited by a state auditor, 90% of the examination will focus on a purchase transaction. Same with a reversed audit looking for refunds, the examination will focus on that low hanging fruit on purchase transactions.
They want to know where you overpaid or underpaid taxes. Whether it’s an overpayment or an underpayment, it’s an expensive problem to have. At CereTax, we saw this recurring common issue and wanted to solve the unique problem that exists in determining taxability on purchase transactions.
We have been able to help leading manufacturers who were utilizing an old legacy solution. They were dealing with inaccuracies, lack of control over the rule configurations, risk associated with outdated content, and high cost of their old solution. We have been able to help these companies essentially eliminate the manufacturers audit risks and put them in complete control of their rule configurations.
To efficiently map transactions to the tax solution, it requires properly configured infrastructure that can tax-sensitize them. This significantly reduces errors, leading to substantial savings during audits and refund reviews with consultants. Want to see our process for yourself?
See how it works, here!
Give us 30 minutes and we will show you CereTax’s indirect tax solutions can save you countless hours and reduce risk when dealing with sales and use tax.
CereTax's VP of Product Strategy, Moshe Weingarten explains how CereTax was modeled to handle shipping differently from legacy platforms.
Sales tax automation is critical to your business and its success — you rely on it to process your transactions, build reports, and keep you compliant. You need your sales tax platform to always be reliable whether it’s a standard day of business, month-end reporting, or one of the busiest times of the year i.e., Black Friday. However, when your tax automation solution is only backed by a 99.5% uptime SLA, then you could be down for over 7 minutes per day, almost an hour per week, over 3.5 hours per month, and almost two days per year. While you wait, here are five few things you can do in 7 minutes if your system goes down during the day.
Joking aside, these critical minutes can hit at the worst time and when you need your tax platform to work the most. These setbacks can take a toll on your business and “just .5%” adds up when it comes to lost productivity and revenue. Most of the time, this does not even include the downtime for scheduled system maintenance, so you could actually wait even longer and risk falling even further behind.
So, what can you do? If you are using a legacy platform hosted in a multi-tenant environment, there isn’t anything you can do other than hope and pray your tax platform does not fail you at the most critical times. With a 99.5% uptime SLA, having an unreliable tax platform down for nearly two days per year can cost your business in a big way.
Your best option is to switch to CereTax — our 99.9999% uptime SLA will never let you down. CereTax runs mirrored, multi-regional east and west data centers. If all 3 of our primary facilities experience an outage, we auto-failover, in seconds, to 3 west facilities. With CereTax, maintenance windows and outages really are a thing of the past. We give you back your time and money, but most importantly — peace of mind.
If you want to see how CereTax keeps sales tax automation running as efficiently as possible and with truly minimal downtime, then watch this short video here:
The software-as-a-service (SaaS) industry has been growing rapidly in recent years, and with this growth has come increased scrutiny from tax authorities around the world. In many jurisdictions, SaaS businesses are now facing new sales taxes, which can have a significant impact on their bottom line.
One of the main reasons for the new sales taxes on SaaS businesses is the changing nature of the industry. SaaS businesses are now considered to be "cloud-based" services, which means that they are delivering software over the internet instead of through physical media such as CDs or DVDs. This has led to a rethinking of the way that software is taxed, as many tax authorities are now viewing SaaS businesses as service providers rather than software vendors.
In general, sales taxes on SaaS businesses are based on the location of the customer, not the location of the business. This means that if a SaaS business has customers in a jurisdiction that has a sales tax, the business must collect and remit the tax on behalf of the customer. In many cases, this can be a complex and time-consuming process, especially for small and medium-sized businesses that may not have the resources to manage this additional tax burden.
In addition to the new sales taxes, SaaS businesses must also be aware of other tax considerations, such as the potential for double taxation and the impact of taxes on their overall business strategy. For example, businesses may choose to structure their operations in a way that minimizes their exposure to sales taxes, or they may choose to pass the cost of the taxes on to their customers in the form of higher prices.
In conclusion, new sales taxes on SaaS businesses are a reality that businesses must navigate to stay competitive and remain profitable. While these taxes can be challenging, they also provide an opportunity for businesses to review their tax strategies and consider ways to minimize the impact of taxes on their bottom line.
By staying informed and being proactive, SaaS businesses can ensure that they are prepared for new sales taxes and are well positioned for success in the future. If you want to see how CereTax can manage sales tax for your SaaS business, fill out the form here.
ATLANTA, Nov. 28, 2022 -- CereTax, the sales tax automation platform, and OneBill Software, the modern agile billing and monetization platform, announced their integration and partnership, which will transform the way telecommunications businesses handle their sales tax automation, along with their billing and subscription management.
The integration between the CereTax and OneBill platforms will give companies the flexibility and scalability not found in many modern billing and sales tax solutions. This versatility is a must-have for the communications industry with the expansion of the "as a Service" marketplace and the abundance of new regulations that obstruct the day-to-day financial operations of businesses.
"This integration was built with the limitless scalability needs of the communications market in mind. The complexity of the communications industry compounds over time and we needed a powerful integration that could manage the difficulty of both subscription and billing management along with sales tax automation. This integration would not have worked without a revolutionary true-cloud sales tax platform that was built to manage that complexity and the world-class billing and subscription management platform that OneBill has established,'' said Brent Reeves, Co-Founder and CRO of CereTax.
The vast telecommunications, sales tax, and billing expertise on both teams created a partnership and integration that is a game changer for the communications marketplace and other multi-vertical industries. This partnership was built not only for the integration but also to change the way the billing and sales tax automation process is done for finance departments everywhere.
"We are thrilled to partner with CereTax to empower our Communications Industry customers with the capability to efficiently and effectively keep on top of their sales taxation obligations. It is another way that we can ensure that the revenue stream for businesses can remain airtight," said JK Chelladurai, Founder and CEO of OneBill.
The CereTax and OneBill partnership will make a massive difference in how finance departments handle the ever-evolving world of billing and subscription management alongside the multivariate world of sales tax management.
When describing a software as a service (SaaS) offering, one of the common terms used is flexibility. But what does that mean? Flexible configurations? Flexible interface? Flexible deployments? Maybe all, or none, of these?
When designing CereTax, we considered all these areas of flexibility, but also focused on one more – flexibility of customization.
After working with large enterprise clients and supporting their numerous indirect tax workflows in our prior business, we consistently had requests or requirements to implement a custom process, calculation, or extract. This was difficult to accommodate as legacy applications are typically not designed to support custom routines within a production system. The alternative was to create and manage custom code that did not impact or break other routines or create a separate code branch that varies from the main programs. This was challenging at best and a nightmare at worst.
Our strategy to solve this problem within the CereTax platform was to breakdown each key process into small, independent routines (called microservices) that are connected like Legos into a workflow. Each “Lego” has two mandatory requirements – to receive and understand the output from the previous Lego, and to send information along to the next one. This means that each microprocess can be completely customized as long as it adheres to the two necessary requirements.
One of the additional benefits of this approach is the ability to expand or streamline a client workflow as needed. For example, we might have a request to create a very complex tax situs routine that uses client-specific data. In that case, step 2 could become steps 2a, 2b, and 2c. As previously described, if step 2c sends along what step 3 needs, we can accommodate this customization.
The opposite of this example is also true. If a client needs a simplified workflow, we can remove unnecessary routines to streamline the process for efficiency. Only the required or essential functions would be included in this example to limit the steps needed to complete the process.
Obviously, there is much more detail to this design as each Lego must adhere to security protocols, accomplish key tasks, and support elements for rules and configurations. But from a design perspective, the Lego analogy holds true as the processes are separate pieces that are placed together.
What truly makes the CereTax flexibility approach unique is that customization does not impact performance, other client revenue streams, or reporting. The custom workflows can be independently assigned to specific revenue streams, integrations, or business units.
We look forward to demonstrating our approach on flexibility as we are confident it will solve many of the usual challenges that occur when accommodating custom requirements. Want to see how the flexibility of the CereTax platform can help manage the complexity of sales tax compliance for your business? Connect with our team here.
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Mike Sanders Co-Founder and CEO, CereTax |
ATLANTA, Sept. 21, 2022 -- CereTax announces its entry into the AT&T Partner Exchange ecosystem as a taxation partner. CereTax, a true-cloud sales tax automation platform, is joining AT&T Partner Exchange to assist companies with the complex world of tax calculation and compliance for the telecommunications industry.
AT&T Partner Exchange is a first-of-its-kind reseller program that puts the solution provider in the driver's seat. This program has a range of offerings including internet and network services, voice and collaboration, cybersecurity, cloud services, wireless and mobility, IoT, among other solutions. It allows partners to tap into a robust product portfolio, layer in your value-added services, and deliver tailored solutions to your customers — all powered by a network designed for the future.
CereTax, in its collaboration with AT&T Partner Exchange, eases the burden of sales tax compliance for customers, simplifies operations, and provides an advanced API to enable real-time calculations of all the various federal, state, and local taxes and fees. This allows solution providers to properly collect and remit the correct amounts from their customers.
"This partnership opens a lot of doors for us to help solution providers enter the market or expand their operations. We are really excited to work with a great partner like AT&T to better serve their customers by providing help in the tax and compliance marketplace," says Brent Reeves, Chief Revenue Officer at CereTax.
CereTax's entry into the AT&T Partner Exchange ecosystem will provide the platform to a wider range of customers within the communications industry. Customers will not have to stress when adding communications services with the CereTax sales tax automation platform that is scalable, fast, dependable, accurate, and secure.
Interested in becoming a CereTax partner? Click here.
While there are a variety of sales tax automation solutions, CereTax has gone a step beyond the rest with the newest technology, highest security level possible, a highly flexible API, and scalability not found in other systems.
Today, most sales tax software is delivered in the cloud via a SaaS (Software-as-a-Service). These tools automate the sales tax calculation process by integrating with the invoicing or ERP system typically via an API (Application Programming Interface).
When it comes time to create a customer quote or invoice, the ERP system will pass certain data elements (customer location, product, sales amount, etc.) to the sales tax platform which will then calculate the sales tax and pass back to the ERP system the applicable sales tax. This is generally done in real time in sub-second intervals.
There are two pieces of information required to calculate the applicable sales tax –
(1) Tax rates
(2) Taxability rules
These rates and rules can be managed in some situations without the need for a sales tax automation platform. For example, if you’re selling tangible personal property (generally taxable) in a few jurisdictions where the tax rates are easily accessible then a sales tax platform may not be necessary. However, if you are selling telecommunications services on a nationwide basis then a sales tax automation solution is a must.
Now, if you fall into the camp where you need a tax calculation solution, there are 5 specific areas that we invite you to explore as you navigate the tax calc landscape.
These are:
These are areas you can “poke and prod” your current sales tax solution provider on and see how they respond.
At CereTax, we wanted to offer the fastest transaction speeds and the highest volume throughput without disruption. To do so, we abandoned the old cloud infrastructure paradigms and built CereTax in a whole new way.
If you have ever...
If you’ve ever heard any of this kind of language or dealt with these issues from your current vendor, then it may be time to look into making a change. CereTax is built to meet the highest volumes and exceed the expectations of even the most demanding businesses.
Let us prove it to you — reach out to us about setting up a free Load Testing Environment.
You have built your business based on dependability and now you want to scale - but is your tax vendor keeping up with your needs?
If your answer is "yes" to any of these, then you need CereTax. We solved these challenges and many more by:
CereTax is the only solution built to automatically scale to meet your growing needs, when you:
At CereTax we did this by:
Other tax systems:
CereTax ensures your accuracy:
At CereTax we believe the measure of success of the business is not the top line or the number of customers, but rather success is the percentage of your customers who are raving fans. Here is how our approach is different:
At CereTax we handle customer success differently than the others. Oh, and one more bonus point…
Nothing short of the highest level of security is even an option.
With the constant threat of malware intrusions, cyber-attacks, and just everyday risks to any of your cloud-based solutions, security should be of primary concern. The 5 keys to our security protocols are:
Take a look at our comprehensive security protocol and compare how your vendor stacks up when it comes to speed, dependability, accuracy, support, and security.
With the constant advancements in technology, more and more companies are moving to cloud-based applications daily. Being on the cloud makes it easier for businesses to access applications across their entire organizations, but also opens them up to ever-increasing cyber security threats. Hackers are everywhere and attempted security breaches are inevitable. Even some of the most well-known companies have found themselves subjects of a security breach. Below are some tips to help protect your company’s data and yourself. These may seem simple or common sense, but some of the biggest data breaches have occurred because an employee was careless and clicked on a link in an email they shouldn’t have…
1) Always use a secure/private internet connection.
a. Public Wi-Fi networks are not secure, making them a prime target area for hackers.
2) If you must use a public internet connection, these will help prevent vulnerabilities.
a. Connect to a Virtual Private Network (VPN).
i. VPNs are used to defend against hackers by helping to hide your IP address, browsing activity and personal data. If your company didn’t provide you with one(which they should have), there are several highly rated VPN providers you can find with a quick Google search.
b. Always access a URL through HTTPS instead of HTTP.
i. HTTPS uses TLS (SSL) to encrypt normal HTTP requests and responses. As a result, HTTPS is far more secure than HTTP.
3) Never leave your devices unlocked or unattended.
4) Install anti-virus software that is setup to run automatically on a weekly or bi-weekly basis.
5) Beware of suspicious email links or websites.
a. Malware (malicious software) can be disguised as an email from a friend or a useful website.
i. Make sure to review the full email address of who it is from. At first glance it may look legitimate, but often there will be an extra letter or character in the email address, indicating this isn’t actually from Sue in Accounting, but rather a phishing scam or imbedded malware.
ii. Always review the full URL address of the website (without clicking the link).
6) Use a strong password that is not the same for any other devices and don’t keep this password with your computer or mobile device on a post-it note or easily accessible in a word document titled “my passwords”.
a. A password manager application on your computer and/or mobile device ensures your passwords are stored in an encrypted database.
b. It is also important to pay attention to the password requirements when signing up for an online service. If the company uses weak password requirements, there’s a good chance they don’t take cyber security seriously as a whole.
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These were just a few tips to keep your company and you safe when accessing cloud applications, but what is your current cloud provider doing to keep your company’s valuable data safe? How do they handle cloud compliance?
CereTax employs multiple regional data centers with multiple availability zones within each region. Your data replicates between the regions in near real-time, so your data is constantly backed-up if there was ever an outage.
When evaluating a new cloud provider, it is crucial to understand what security protocols they have in place. You should also continuously evaluate how your current provider is adapting its security measures to account for the“newest” threats.
CereTax utilizes enterprise-grade best practices to protect our customers’ data.
Continuous Security Control Monitoring
CereTax uses an automation platform to continuously monitor 100+ security controls across the organization. Automatedalerts and evidence collection allows CereTax to confidently prove its security and compliance posture any day of the year, while fostering a security-first mindset and culture of compliance across the organization.
Employee Trainings
Security is a company-wide endeavor and requires the utmost diligence from everyone. All employees should complete an annual security training program and employ best practices when handling customer data.
Penetration Tests
CereTax works with industry leading security firms to perform annual network and application layer penetration tests.
Secure Software Development
CereTax utilizes a variety of manual and automatic data security and vulnerability checks throughout the software development lifecycle.
Data Encryption
Data is encrypted both in-transit using TLS and at rest.
Vulnerability Disclosure Program
If you believe you’ve discovered a bug in CereTax’s security, please get in touch by emailing support@ceretax.com. Our security team promptly investigates all reported issues.
Does your current provider take security as seriously as CereTax does? Maybe you need to find out…
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!
