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What are the current technologies being adopted, challenges and future opportunities?
Sovos and SG Analytics conducted a survey to better understand key issues and approaches to sales and use tax compliance across the U.S. software segment. More than 200 U.S.-based software organizations were interviewed, including finance/accounting and IT professionals.
Sales and use tax compliance is a critical issue that software organizations must address to reduce their regulatory risks, increase operational efficiency and boost their bottom line. Below are top takeaways on how the U.S. software industry is evolving, current sales and use tax challenges faced by software organizations, as well as potential solutions and future growth prospects.
- Audits are increasing, as are their associated costs and penalties. In the last 12 months, 41% of software organizations have paid an annual audit penalty of $160K.
- Improving operational efficiencies is challenging for professionals managing sales and use tax compliance. The survey found that 60% of finance/accounting and IT professionals spent one-quarter of their monthly time on sales and use tax compliance.
- There is an increased shift towards cloud-based solutions. Eighty-three percent of respondents plan to migrate to the cloud in the next 24 months. Faster automated data feeds, database conversions and effective collaboration between different departments are helping to drive the shift.
- Businesses need solutions that eliminate the reliance on manual data entry. Over two-thirds of respondents said they want scalable sales and use tax solutions with flexible deployment options and data security features.
Read the full report to learn about sales and use tax challenges for software providers.