To construct a persuasive enterprise case for sales tax software, professionals want to elucidate how automating sure tax features and enhancing reporting and evaluation will profit the corporate as an entire. Better effectivity, extra accuracy, and higher analytical capabilities are all fantastic speaking factors, however they don’t justify a spend for gross sales tax software program. One of the simplest ways to create enthusiasm and justify a spend for sales tax automation within the C-suite is for example, with concrete examples, exactly how the know-how will enhance operations, generate financial savings, and enhance the underside line.
In different phrases, don’t inform your CEO why tax software is a smart funding – present them. Particularly, it’s essential present the know-how’s return on funding (ROI). Hold studying for five methods to calculate and talk ROI in your enterprise case for gross sales tax automation.
Watch our free on-demand webinar, Building a business case for indirect tax automation.
- Keep away from reporting errors and incorrect gross sales tax calculations
Gross sales tax software program can cut back pricey tax liabilities in different methods as effectively.
For instance, exterior audits are usually triggered by reporting errors, incorrect tax calculations, or anomalies – comparable to issued resale certificates or non-remission of use tax – that invite regulatory scrutiny. Such errors, even when they’re unintentional, typically counsel to regulators that different violations could also be hiding within the books.
Tax engine software program just about eliminates these kinds of accounting errors by offering persistently correct gross sales and use tax, VAT, and GST calculations that don’t increase crimson flags. Within the occasion of an audit, a tax engine can immediately present a defensible and audit-ready information path, saving each auditors and corporations a substantial period of time, cash, and problem.
- Scale back gross sales tax compliance liabilities from audits
Tax audits are one space the place software program capabilities could make a dramatic distinction. Audits are far much less painful when you might have the appropriate automation and reporting instruments at your disposal – however that cause isn’t prone to transfer the needle with executives. Your C-level viewers shall be extra fascinated with listening to about audit-related financial savings.
One ROI technique is to analysis how a lot cash your organization has paid in penalties and curiosity over the previous a number of years, together with the prices related to addressing regulatory issues and, if relevant, the effort and time needed to guard the model.
When presenting your enterprise case for gross sales tax software program, executives who’ve felt the sting of more and more aggressive regulators could also be receptive to such questions as:
- How a lot cash would have been saved if the corporate didn’t should pay these penalties?
- What if the corporate didn’t should spend a lot effort and time on audit protection?
- How a lot organizational friction may very well be eradicated if such issues didn’t exist?
- Remove gross sales tax overpayments and misguided costs
Potential financial savings may also be realized by figuring out situations the place taxes have been overpaid.
For instance, most ERP and buying software program may be configured to determine costs by – and paid to – particular distributors. Whereas it’s impractical to assessment all of an organization’s invoices, a workable technique is to determine the corporate’s prime distributors and assessment their invoices for doable errors up to now 12 months. Pull the invoices to see if the corporate paid any pointless taxes, comparable to a vendor charging gross sales tax once they shouldn’t have.
If a number of situations of tax overpayments exist, that info must be used for example how gross sales tax software program can stop such errors from occurring within the first place, thus saving cash.
The identical fundamental method may be taken by working GL account and buy places. Once more, give attention to areas that must be non-taxable and assessment a pattern of invoices to confirm the validity of taxes charged and paid.
- Obtain non-quantifiable financial savings by releasing up your gross sales and use tax crew for higher-value work
Along with quantifiable ROI financial savings, gross sales tax software program also can present each intangible and hidden advantages – advantages that may not instantly return money however can nonetheless enhance the underside line over time in a variety of methods. One instance of a hidden price that requires consideration is labor related to full-time workers.
Each time the topic of “automation” comes up in a tax division, many tax practitioners are involved that their jobs will disappear, or they marvel how their duties will change if the routine, transactional elements of their job are dealt with by way of automation. For example, let’s assume you and your crew are spending 400 hours per thirty days in your compliance course of, and a tax automation instrument might cut back that to 100 hours per thirty days. That might liberate 300 hours per thirty days that may very well be spent on higher-value duties that require your distinctive tax experience.
What would possibly these actions be? Listed here are a couple of concepts:
- Use indirect tax data to identify tax credits and monitor nexus thresholds
- Conduct forward-looking information analytics to determine dangers and alternatives
- Develop different tax methods
- Analysis potential financial savings within the provide chain
- Conduct extra thorough self-audits
- Improve the tax division’s strategic advisory position within the firm
- Enhance tax processes to make them extra environment friendly
- Discover and apply superior options and performance of your gross sales tax software program
- Use gross sales tax software program to determine areas of inefficiency, error, and waste
Any one in every of these actions might yield financial savings and insights that may not in any other case be doable. These advantages usually are not essentially confined to the tax division, both. The power to determine tax liabilities on buy invoices might assist the procurement crew discover hidden areas of waste within the provide chain. If, for instance, the corporate purchases the identical widget from three completely different states, however one costs 4% tax, adopted by 6% and 10%, tax automation software program can flag these discrepancies, and that information can be utilized to reassess the cost-effectiveness of that particular provide chain companion.
Likewise, for those who carry a FAS 5 (ASC 450) oblique tax legal responsibility in your steadiness sheet, gross sales tax software program can cut back that legal responsibility over time, which can decrease prices and permit the corporate to current a extra favorable steadiness sheet to buyers.
These specific actions deal with areas that executives care about – effectivity, price financial savings, and danger discount.
- Think about further benefits of gross sales tax software program
- Audit preparation: Gross sales tax software program permits firms to be absolutely primed for audits and to anticipate doubtless outcomes with none surprises.
- Threat discount: Given extra strong scenario-modeling instruments and metrics, tax engine software program may help determine ignored areas of danger and supply different types of strategic intelligence.
- Determination-making: Gross sales tax software program may help executives and different departments analyze and reveal the hidden tax implications of many vital choices.
- Techniques simplification: Buying and/or gross sales techniques may be streamlined and configured in order that an organization’s ERP routinely delivers the right information to the tax division.
- Gross sales and use tax information: In negotiations with state and native jurisdictions over coverage issues, firms can use gross sales and use tax information to find out their tax profile in varied jurisdictions then illustrate how vital their firm is to the area’s tax base.
- Digital tax reporting: Governments all over the place are digitizing their tax regimes and requiring larger tax transparency from firms, particularly multinationals that have interaction in a substantial amount of cross-border commerce. Oblique tax software program supplies all of the instruments essential to adjust to digital tax laws world wide.
- Responsiveness: Automation provides tax departments the means to shortly reply to information requests, reconciliations, and different need-it-now calls for.
- Information perception and alternatives: Extra highly effective information analytics instruments and dashboards may help uncover new, beforehand undetected enterprise alternatives. Obtain our free whitepaper to be taught extra about how one can uncover strategic insights and leverage indirect tax data for faster analytics and reporting.
Abstract: Speaking gross sales tax software program ROI to the C-suite
By monitoring and validating the success of your present venture and measuring towards the metrics developed in your enterprise case, you add a further dimension to your story. Details communicate for themselves and testimonials are highly effective instruments. Construct credibility in your general technique and deliberate method to know-how. When it’s time to foyer for Tax’s subsequent buy, you’ll be capable to higher help your claims, persuade your stakeholders, and seize their consideration extra shortly.
Bear in mind the following tips:
- Everybody impacted by a present initiative is a possible advocate in your subsequent venture
- Search new know-how that’s aligned to your enterprise and tax technique
- Develop sound bites because the implementation and use of the answer start to share your successes on a second’s discover
- Outline and measure incremental advantages from implementing a tax engine
Tax professionals have to be outfitted with the data and expertise to construct and win their case for funding in know-how. Transferring from the whiteboard to an actionable plan ahead requires a proactive method to substantiating an ROI within the enterprise case. Utilizing these necessities, provides the venture its greatest likelihood for achievement.
Hold studying for extra assets on the way to calculate ROI in your tax know-how enterprise case: