5 Tips for Finance Leadership to Empower Tax for Success

Sovos
November 7, 2023

This blog was last updated on November 7, 2023

We’ve previously discussed how important it is for the right tools, processes and people to be in place to ensure that there is a strong foundation for your finance team. But the tax function within the financial team also needs its own special consideration. Otherwise, a business could overlook certain regulations and requirements, especially as sales tax continues to evolve quickly. Here are five key things for finance leadership to keep in mind when working toward tax success.

Build a qualified tax function

The Olympics are not the only place that can utilize “dream teams.” Sales tax also needs to have everything from IT, to legal, sales, marketing, billing and even accounts receivable working together for compliance. Ensure your company has the right employees in place and that they have the necessary training to help them stay compliant – and keep the business compliant.
Employees must understand the implications of changes and be adaptable.  A technology-focused and data-driven mindset will also be key. Knowing the security risks, and how to properly meet those challenges, are also essential.

Encourage a culture of compliance

Sales tax compliance is not easy. But when businesses take the correct steps and prepare for filing obligations, it will be easier. Your employees need to understand the risk of non-compliance (e.g., reputational factor, financial dangers). Have regular sales tax nexus reviews, which should include knowing your current physical and economic nexus status, as well as if you’ve lost nexus anywhere. Nexus is not static, and regulations can evolve over time. Maintaining compliance is going to require employees at all levels – work with your teams to help them understand how to utilize the right resources.

Make it easy to adapt to changes

Manually tracking regulatory change can be difficult, which is why your team shouldn’t have to depend on that. Subscribe to the Sovos regulatory feed, so your business can be advised when changes do occur. Leave researching tax laws to the professionals.

Additionally, evaluate your internal processes for implementing any changes. Integrating a tax engine into your ERP can help with the adaptability. For example, working with a cloud-based tax engine and a provider that regularly pushes updates into your system will remove your IT team as the middleman.

Invest in scalable technology

Your technology also should be able to grow with your business as it expands – whether through growing product lines or adding locations in new taxing jurisdictions. Technological investments are becoming an increasingly top focal point for organizations. A recent Sovos survey found that approximately three-quarters (76%) of U.S.-based software organizations said they were looking for a new sales tax solution within the next two years. Additionally, nearly half of respondents (47%) said the ability to maintain compliance as the company grows and expands was part of their enhancement roadmap.

Remember that depending on the stage of growth your organization is going through, a different level of automation may be appropriate. Reviewing the types of sales tax solutions out there can help ensure that the right option is integrated.

Reduce manual processes to avoid employee burnout

Increased efficiency is just one benefit to automating your sales tax process. Businesses will also gain greater insight into their data, utilize clearly defined audit trails, cut back on human error and ensure focus on overall business growth – no more stress over maintaining sales tax compliance.

Automation and even artificial intelligence (AI) are not meant to replace people. Instead, they are meant to help employees do their jobs better and faster. Reiterate to your teams that they are valued, it’s just increasingly critical to have them using the best tools.

Take Action

Contact our team to explore how tax technology can enable your team to meet the demands of modern compliance with minimal stress.

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Author

Sovos

Sovos is a global provider of tax, compliance and trust solutions and services that enable businesses to navigate an increasingly regulated world with true confidence. Purpose-built for always-on compliance capabilities, our scalable IT-driven solutions meet the demands of an evolving and complex global regulatory landscape. Sovos’ cloud-based software platform provides an unparalleled level of integration with business applications and government compliance processes. More than 100,000 customers in 100+ countries – including half the Fortune 500 – trust Sovos for their compliance needs. Sovos annually processes more than three billion transactions across 19,000 global tax jurisdictions. Bolstered by a robust partner program more than 400 strong, Sovos brings to bear an unrivaled global network for companies across industries and geographies. Founded in 1979, Sovos has operations across the Americas and Europe, and is owned by Hg and TA Associates.
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