How a Cloud-Based Sales Tax Solution Benefits Your Business

Olivia Bilodeau
May 11, 2021

As the digitization of sales tax continues to raise compliance stakes worldwide, businesses require a complete solution for real-time tax calculation. User-centric solutions that operate on the most up-to-date regulatory requirements can help organizations avoid backtracking and making adjustments for evolving regulations after the fact. This is where a cloud-based sales tax solution comes into play.

There are numerous potential challenges with running a sales tax engine on-premise, which is why organizations of all sizes have moved to the cloud. Businesses that are considering migrating to SAP S/4HANA will especially benefit from making the switch.

ASUG, the world’s largest SAP user group, conducted research in collaboration with Sovos to better understand the sales tax solution experiences and change management processes of customers that use SAP enterprise resource planning (ERP) systems. The research also explored why organizations opt for on-premise or cloud-based solutions.

Cost reductions (hardware/software costs and/or support staff costs) and strategic initiatives or digital transformations were the top reasons companies host sales tax solutions in the cloud. Additionally, the number one reason respondents that currently host their sales tax solution(s) on-premises are planning to move their solution(s) to the cloud is to stay current with ERP evolutions and avoid aging out of support.

Approximately two-thirds of respondents (60%) said they are planning to move or are considering moving to the cloud. However, organizations are not strangers to cloud-based sales tax solutions. One-third (34%) said they are hosting their sales tax solution(s) on-premises, though a combined 66% use a cloud solution of some kind.

When cloud solutions are used, the most popular environments are a hybrid cloud (some on-premises private cloud, some public or hosted cloud) followed by a software-as-a-service (SaaS), cloud-based solution.

Nearly half of respondents (47%) said the top benefit in hosting sales tax solutions in the cloud is reduced manual work for IT staff, with 35% citing better integration with other systems and 33% saying faster updates are delivered to the business.

A solution to keep you moving forward

Switching to the cloud from an on-premise solution can make a huge impact on an organization.

For example, an existing Sovos client had outgrown the ability of an on-premise based solution to keep pace with a rapidly evolving tax landscape. The company had become too dependent on IT to manage its tax engine and a reliance on manual and paper-based solutions was impacting the organization’s ability to scale. Being forced to run continuous manual updates also created an undue burden on a small team.

Moving from an on-premise tax engine to one in the cloud helped to better manage all sales tax obligations. The company gained better oversight and management of exemption certificates and evolving tax forms and had a completely automated process for tracking and updating regulatory changes. There was also less reliance from tax on the internal IT team and a significant reduction in dedicated IT for tax related issues.

Ready to see if a cloud-based sales tax solution could be the key to your business’ success? Reach out to our team of experts to see how Sovos can help.

Take Action

Ready to learn more about how moving to a cloud-based sales tax system is beneficial? Check out our on-demand webinar with ASUG where we dug into the survey results.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Olivia Bilodeau

Olivia Bilodeau is Product Marketing Manager at Sovos for the Sales and Use Tax line of business. Her main areas of focus are to communicate the value of Sovos’ solutions through messaging, positioning, enablement & more, and help bring new products to market to make client’s lives even better. She enjoys connecting and building relationships with people, whether they are a client, fellow employee, or a friendly face at the local coffee shop. When she isn’t brainstorming different ways to solve tax for good, Olivia loves exploring the town she just moved to in New Hampshire and decorating the new house.
Share this post

North America Tax Information Reporting
March 22, 2024
Market Conduct Annual Statement Reminders and More

On the second Wednesday of each month, Sovos experts host a 30-minute webinar, Water Cooler Wednesday, to share the latest updates on statutory filings. In March, Sarah Stubbs shared information about the many filings due after March 1, from Market Conduct Annual Statements to health supplements for P&C and life insurers writing A&H businesses and […]

North America ShipCompliant
March 21, 2024
How Producers Can Build a DtC Shipping Market

Direct-to-consumer (DtC) shipping has become one of the leading sales models for businesses of all sizes and in all markets. The idea of connecting directly with consumers is notably attractive, as it helps brands develop a personal relationship and avoid costly distribution chains. Yet, for all its popularity, DtC is often a hard concept to […]

North America ShipCompliant
March 20, 2024
Key Findings from the 2024 DtC Beer Shipping Report

This March, Sovos ShipCompliant released the fourth annual Direct-to-Consumer Beer Shipping Report in partnership with the Brewers Association. The DtC beer shipping report features exclusive insights on the regulatory state of the direct-to-consumer (DtC) channel, Brewers Association’s perspective and key data from a consumer preferences survey. Let’s take a deeper dive into some of the […]

March 20, 2024
As the World Gets Smaller, Think Bigger About Global Tax Compliance

For the past few weeks back, my colleagues and I have been talking a lot about the importance of a global strategy when it comes to addressing today’s modern tax environments. On the heels of Sovos introducing the Sovos Compliance Cloud, many in our company’s leadership team have blogged about related topics and the critical […]

North America ShipCompliant
March 12, 2024
Florida HR 583 Set to Uncork Larger Format Wine Bottles

Florida wine lovers could soon enjoy a bigger selection of bottles based on a recent bill passed by the state’s legislature (HR 583) that would remove the existing cap on wine bottle sizes. What is Florida’s HR 583 bill? Currently, Florida law prohibits the sale of wine in bottles larger than one gallon (a little […]