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Ask the Right Questions for Your Sales and Use Tax Compliance Process

May 05, 2017

By Jim Ford, Director, Sales Tax Compliance and Automation

The management of sales and use tax compliance can be complicated. Especially if your process is manual. To make it more manageable, you need to first ask the right questions about your data, your process, and your resources. Only then can you identify areas to streamline your in-house process or consider whether outsourcing may be the best option for you.

Making the right tweaks to your current process or outsourcing the process completely can save you time, money, free up resources, and reduce risk.


Before seeking a path of improvement for your internal process, you first need to take a hard look at the current state of three key areas:

  1. How are you filing – manually or with automation? Are you keying data into state’s websites? Are you using software to generate the forms?

If nothing else – software to help with the preparation of forms is a must. Once data is prepared there are a multitude of solutions that can be implemented to help streamline the return prep, supporting schedules, and may even produce up-loadable filings.  Are you utilizing the right solution for your filings?  What other options are out there?

  1. Are you gathering the right data? How is your data validated, archived, and retrieved?

Returns solutions are great at producing signature ready returns. But they are not data warehouses or transformation tools. If your source data takes a lot of massaging to get it ready for your returns software, you may need to consider that process as one that takes place outside the system before data is ready for returns.

  1. During your process, are you reconciling along the way – to be sure your data agrees with your general ledger?

It’s common for companies with complex systems and multiple general ledgers to run with transaction level data to begin their process each month. But that transaction level data needs to be reconciled back to the general ledger in order to account for any adjustments. Most companies do this process after compliance is complete, double checking the data that was filed agrees with what was accrued. With the right tools and automation in place, the reconciliation process becomes self-sufficient and is completed with the filings in real time.


Sales and use tax compliance consumes a great amount of your tax staff’s time.

  • There is software to be maintained
  • Payments to be made
  • Data to be manipulated
  • Returns to be filed

The payment process alone can be time consuming. In the meantime, you may already be understaffed, or worse yet, your tax staff may not have sufficient experience in sales and use compliance. This could cause a greater margin for error, or missed payments. At that point, outsourcing becomes a strategic option for you.

If you consider the 3 areas I mentioned above, there are great benefits in outsourcing:

  1. If you have existing sales tax software in place you can say goodbye to annual renewals, hardware upgrades, and support. Your outsourcer will use the software and license it directly so there is no software implementation, maintenance, or annual fees for support.
  1. Your data can be accepted as-is. There will be no manipulation or conversion required, saving you many man hours and headaches. We have dedicated Tax Technology professionals that support data warehousing and transformation of source data files on a monthly basis.
  1. Our process starts with general ledger alongside transaction level detail. The combination of the two allow for easy return filing and adjustments on the fly. When returns are filed the reconciliation process is done as any adjustments to returns have been identified in the data when returns were prepared.


Whether you outsource or decide to streamline your current in-house sales tax process, there are ways to minimize risk and cost in your compliance process. Immediately realize the benefits of:

  • Streamlined and validated data
  • Reduced tax liability and audit risk
  • Return deadlines monitored and met
  • Tightened internal controls
  • Increased tax return accuracy
  • Reduction in overall internal costs

Learn more about Sales and Use Tax Compliance Services.

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