As a business grows and monetary value and success increases, you may find the complexity of your sales tax situation also increases. Once a business starts meeting sales tax nexus thresholds outside of just your state you will find that you have to now collect, file and remit sales tax in numerous states. Which can be quite a tall order. To complicate things, you must act promptly to remain compliant. We are going to focus on outsourcing today, but there are a few options.
To keep compliant you have 4 options. You can:
- Manage everything in-house; figure it out on your own
- Co-source; do some of it on your own with a little outside help
- Out-source your tax compliance to a sales tax professional
- Do nothing. Ignore it and hope it will all just go away. (Hate to break it to you. It won’t.)
While these are all viable options, we are going to dial in on the top benefits of outsourcing. A lot of times we find that people are afraid to outsource this aspect of their business. Relinquishing control can make people leery. Yet, the risks if not maintaining compliance keeps them up at night. If this is you, here are some benefits to outsourcing that may put your mind at ease.
- Enhance the value of your staff. Reducing stress on internal staff that have multiple roles outside of sales and use tax can make a big difference in the function of each employee's role. It can increase efficiency and accuracy as well as free up resources to focus on other important tasks for your business.
- Help you find peace of mind. Knowing you have an expert who won’t make detrimental mistakes that can and often will come from someone not working in sales tax everyday can be pivotal in reducing the burden of sales tax. You will have one-on-one service persistently, if needed.
- Minimize sales tax audit risk. Through outsourcing you will find that you will have a more reliable ability to track and monitor compliance. An audit is a stressful, time-intensive process that’s designed to create revenue for the state and expenses for the taxpayer. You can – and should – fight an audit by bringing up exemptions to offset penalties. But it’s much easier to do so through an independent review that’s designed to improve the financial standing of your business, which is what a competent sales tax company and outsourcing provider will cover.
- Save money. Avoid overpayments. Overpayments of sales and use taxes are actually fairly common, especially in larger businesses. When an overpayment is discovered, the taxpayer is responsible for organizing, documenting and presenting the claim for recovery. Reviewing where you’re making purchases and paying taxes on the front end is a wise choice. We are also cognizant through this process of any underpayments that we find and will notify you so you can course correct.
- Consistency. Even as your in house staff changes you will have a predictable, reliable month to month compliance process.
- Improve and make your process scaleable. Through out-sourcing you will find that streamlining the remittance aspect of timely compliance gets rid of the requirement for individual check requests and mailings. You will find you have all client data files, returns, notices, communications and reports all in one central secure location. Furthermore, you can easily compensate for increasing compliance obligations by simply sending data to your outsourcing provider.
If you are thinking about outsourcing, ensure you do your due diligence. Ask questions, deep dive into their experience to determine that the outsource provider has skills and knowledge necessary to manage data in an efficient and effective manner. Another key attribute is clear and responsive communication.
Altogether, at Peisner Johnson we are here specifically to help your business succeed. The key to successful sales tax compliance is education. Knowing the sales tax laws of your state and jurisdiction and knowing where you have nexus can be an overwhelming endeavor. Here at Peisner Johnson we can make certain you are maintaining compliance in the states you may have sales tax obligations. Our team has unlimited phone and email support to help manage errors found in data and help manage notices. We help you track your nexus and much more. Also, we have a dedicated sales tax professional who will be on your account who you can turn to when sales tax issues arise or an audit turns up.
If sales tax is keeping you up at night, find peace of mind and a good night’s sleep with a “What’s Next Call.” It’s free and we will help you find a better sales tax process that you can feel confident about. We would be honored to work with you.