Increased Costs from Sales Tax Compliance
An article in the Wall Street Journal CFO Report this week highlighted comments from a few business leaders, like Joe Albanese of AmeriMark, predicting cost increases because of compliance with a future national sales tax law. A national sales tax bill, like the Marketplace Fairness Act, could force businesses to collect sales tax for remote sales. Joe Albanese, chief financial officer at Cleveland-based AmeriMark, estimates that the increase in cost for his company will be $500,000 or more for compliance and filing new returns. Does your business potentially fall into this category if sales tax reach is extended? Regardless of whether a national sales tax is instituted or not, there are things your business should be doing to reduce the costs of compliance and the potential for audits right now. Reducing Costs of Sales Tax Compliance.
There are four ways to reduce sales tax compliance:
- Reduce the cost of time spent on sales taxes
- Reduce the cost of sales tax employees
- Reduce the cost of sales tax software
- Reduce the cost of sales tax audits.
Automation is the single solution to all four of these areas of opportunity. The problem for most businesses is the amount of time it takes them to comply with sales tax legislation. Between keeping up to date on taxability, analyzing laws, and filing sales tax returns, any area where you can reduce the amount of time you spend on sales tax can make a huge difference in the cost of compliance. Automation makes it easier to do sales tax tasks quickly with a significantly reduced error rate when compared to humans taking a cautious and time-consuming approach to sales tax. When you can reduce the amount of time that your employees need to spend on sales tax, they can move on to other things. And when your employees get more done in less time, that means you need fewer employees to handle your business tasks.
Fewer employees mean less money spent on salaries, benefits, and even on office space and furniture. One often-missed way to save money on sales tax is by choosing a better sales tax solution. Most companies are stuck in an endless cycle with their expensive and outdated sales tax software. Often, a company’s sales tax software hasn’t been changed in the last decade even though it may require expensive systems to manage and update. Moving to a sales tax software that’s simple, easy to maintain, and cost-effective for your business can make a huge difference in the costs of compliance. With automation, you can reduce the number of audits you have to endure as a business because the most common human errors can be avoided completely. FileLINK, for instance, verifies address information and sales tax calculations—two of the most common error areas in sales tax compliance.
RecoveryLINK helps you quickly ward off audits with fast self-audits that can help you find past errors before auditors do or find negotiation points in overpayments. Don’t believe us that sales tax compliance doesn’t have to cost a fortune? Why not give our software a try and see what a difference automated sales tax filing makes in your business? We can show you instantly how much money you’re leaving behind in your sales tax errors.