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
Share on facebook
Share on twitter
Share on linkedin
Share on email

North America ShipCompliant
August 16, 2022
Dispelling the Top 5 DtC Shipping Myths

Direct-to-consumer (DtC) alcohol shipping can at times seem convoluted and increasingly complicated. States continue to evolve their DtC shipping requirements, which can understandably create some confusion over what is and is not allowed. However, working with the right partner can help to clear up some of that confusion. Here are some of the top misconceptions […]

E-Invoicing Compliance EMEA VAT & Fiscal Reporting
August 16, 2022
VAT in the Digital Age: Mandatory E-invoicing in the EU

The European Commission (EC)’s action plan for fair and simple taxation – ’VAT in the Digital Age’- continues to progress. After a public consultation process, the EC has published Final Reports discussing the best options for the European market to fight tax fraud and benefit businesses with the use of technology. The areas covered are: […]

North America ShipCompliant
August 15, 2022
Compliance and Tax Considerations for Cider Producers

The summer months can be ideal for enjoying a hard cider, but it’s always a good time for cider producers to brush up on three-tier compliance rules. Before expanding into new markets, you must be familiar with the specific rules of each state. In this blog, we will cover the major regulatory and tax rules […]

EMEA IPT
August 10, 2022
Meet the Expert – Hector Fernandez, Principal Compliance Tax Services Representative

Meet the Expert is our series of blogs where we share more about the team behind our innovative software and managed services. As a global organisation with indirect tax experts across all regions, our dedicated team are often the first to know about regulatory changes and developments in global tax regimes, to support you in your […]

North America ShipCompliant
August 9, 2022
2022 Direct-to-Consumer Wine Shipping Mid-Year Report

A lot has changed in the direct-to-consumer (DtC) wine shipping channel since the January release of our Direct-to-Consumer Wine Shipping Report—changes in volume and value that have the market resembling pre-pandemic patterns. Note: The proprietary data featured in this mid-year report is compiled from an algorithm measuring total DtC shipments based on millions of anonymous […]