Your guide to overcoming the complexities of tax management.
Managing sales tax compliance can be overwhelming for Acumatica users, especially when dealing with multiple states. In this episode of acu-connectiions, Amiee Keenan engages with Naquan Banks from Avalara to unravel the common challenges and solutions for tax compliance.
The Complexity of Sales Tax Compliance
Naquan points out that tax compliance was never designed to fit neatly within an ERP system like Acumatica. With over 12,000 taxing jurisdictions in the U.S., businesses often underestimate the complications involved. Many still cling to outdated methods, thinking they can handle everything with spreadsheets. Naquan shares,
“Do what you do best and outsource the rest.”
This quote highlights the importance of focusing on core business operations while delegating complex tasks like tax compliance.
What Goes Wrong?
When companies delay addressing sales tax compliance, they often face serious repercussions. Naquan emphasizes the importance of exemption certificate management, especially for Acumatica users in sectors like manufacturing and distribution, where B2B transactions are common. He warns that
“Auditors are very smart. Their job is to collect taxes, and they look for the low-hanging fruit.”
Without a solid strategy for managing exemption certificates, businesses risk hefty fines during audits.
Who Feels the Pain?
The burden of tax compliance doesn’t just fall on the CFOs; it often starts with controllers and accounting managers who feel the immediate impact. As Naquan explains, these roles are pivotal in recognizing when things go awry, stating,
“It becomes painful… when you get audited.”
Eventually, the CFO will feel the ramifications of poor tax management, especially when audits lead to unexpected costs.
Signs You Need a Change
Naquan outlines key signals that indicate it’s time to move beyond manual tax compliance:
- Inability to keep up with rate changes in Acumatica.
- Struggles with managing exemption certificates effectively.
- Expansion into accounts payable and accruing use tax.
Recognizing these pain points can guide the decision-making process and help businesses implement necessary changes to streamline tax compliance.
Sales tax compliance doesn’t have to be a daunting task. With the right tools and strategies, Acumatica users can navigate the complexities of multi-state tax management efficiently.
You can listen to this episode and more from The acu-connections Podcast here, or on Spotify or Apple Podcasts.