As I look back on my career over the past 16+ years, not only have tax technology services changed but the accounting industry is much different place. I actually started off doing tax software implementations of telecom tax software which generally spanned at least a year from project kick-off to go-live. My counterparts in the “Sales tax” practice usually had a 3-6 month implementation timeframe with tax research and taxability determination set up. However, telecom tax had a much more detailed project scope and timeline because the complexity involved not only sales tax but a wide array of regulatory surcharges, 911 fees and other gross receipts taxes that could apply to a single charge. There were only a few software vendors to choose from but usually it was narrowed down to 1 or maybe 2 depending on price point, industry, and ERP system. Our team usually worked with IT consulting firms such as Bearing Point and Accenture to assist with the “technical” aspects of the projects such as API (“Application Program Interface”) development.
Fast forward to 2016, there are many more “tax software” players out there with solutions for all size companies and a wide range of industries. The role of the “tax consultant” has expanded significantly and includes more technical skills such as the ability to write SQL queries and in depth knowledge of ERP systems. At the same time, integration timelines can be shorter in some respects with the increase of “plug and play” connectors that reduce the time needed for API development. Yet, sales tax has become a lot more complicated and issues of nexus, tax base expansions, new technology, and internet sales and services offerings have all created a ‘gray” area in indirect taxation. Not to mention the increased global footprint of businesses both big and small.
The good news is that all of this “change” has actually been quite beneficial for the businesses that now must maneuver the obstacles of indirect taxes. Online start-ups and ecommerce businesses now have cost effective options available to help manage their compliance responsibilities with cloud based applications such as Taxify, Exactor and TaxJar. For small and medium businesses, the BIG guys like Vertex and OneSource (fka Sabrix) have rolled out platforms geared specifically for this segment. While companies like Avalara have expanded to include solutions in telecom, VAT and lodging. Not to mention tax software solutions from staples in the tax arena with CCH Tax Office and Sovos (fka Taxware).
All the choices in the market of tax software solutions and the ever-changing world of sales tax might seem momentous and overwhelming when it comes to finding a solution that is the right fit but I hope to provide some guidance with this series of blogs focused specifically on tax automation solutions for businesses of all sizes and industries.
Other recent “Sales Tax Automation & Software” posts by Joni Johnson-Powe, JD, CPA:
- Sales Tax Systems: Business Requirements Document Is the Road Map
- The Key to a Successful Tax Software Implementation
- The Changing World of (Sales) Tax Technology