Administrative tasks like tax management, while certainly a necessary part of doing business, are time consuming, especially when done manually.
That is why it is important to automate and outsource as many of these administrative tasks as possible.
According to Jonathan Barsade, a former tax attorney and Exactor CEO, 25 years ago no HR person would outsource payroll; today few business owners would consider processing payroll and payroll taxes on their own.
They use outsource solutions such as ADP; Paychex, Intuit and others. Outsourcing allows the business owner to streamline the company workload and leaves management to concentrate on what the company does best – managing business operations and focusing on sales.
As Barsade points out,”if, like millions of small business owners, the company sell goods and services over the Internet, it’s important to make sure the company complies with local and state tax guidelines nationwide, which can be overwhelming unless the company have a good automated system.”
The question facing management is identifying which service will work best for the company and integrating into current operations.
Barsade offers these five tips to help the company identify the features the company need:
- Find a comprehensive solution: Make sure the company finds a solution that can handle multiple tax jurisdictions and update information in real time. Look for a solution that weighs factors such as local tax holidays, and which can differentiate between the taxability and tax rates of different items. Static tax tables simply cannot provide this kind of knowhow. If the company finds an all-in-one, automated solution, the company won’t have to cross-reference information and worry about manual compliance with changing rules.
- Look for a low maintenance solution: It’s also crucial to find a system that won’t tie the company up with constant maintenance. Tax laws change frequently all over the country, these are promoted at least monthly, and when the management is running a busy company, it can be hard to keep up with new developments. The company will need a system that handles changes and updates automatically – one which does not require the company to remember each month to do a manual intervention.
- Make sure the software is easy to install and integrate: When the company select a tax engine, it’s vital to ensure it can easily integrate into current operations. Look for a system that doesn’t require more than a few hours tops to set up and connect with the company’s online shopping cart. It should be simple enough to install without requiring any significant support from a software expert.
- Find a solution that files all tax returns for the company: As the company evaluate the companyr options, make sure the tax software generates and files the returns for the company across the board, including sales tax for all state and local jurisdictions. Look for a solution that continuously updates information to capture changes in local laws and automatically files the company’s returns. Just like the company would not invest in a payment processing solution that processes payments only in certain states, it should not want a tax solution that is limited in scope. Even if the company does not sell to certain states, the company would not want to have to change technology provider in the future as the company expands its business and starts selling in new states.
Barsade argues, “The bottom line is that the company will need to find an affordable, fully automated, single-source solution that addresses all of the tax compliance needs. Since doing business online means complying with a variety of tax jurisdictions that change constantly, it’s best to select a solution that updates data in real time and automates the processes.”
He adds, “It’s also important to find a solution that is easy to set up and maintain. And of course, the company will want a system that not only files taxes but has the company’s back if a taxing authority questions the filings.”
“There are affordable services on the market now that can streamline and automate tax filing, giving the company more time to focus on it’s business. By following these tips, the company can find the right fit,” Barsade concludes.