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Sales Tax System Implementations: Selecting the Right Software

author photo of Diane Yetter

One of the most vital steps in a successful sales tax system implementation is choosing the right software solution.  Every business is unique and has an array of different requirements. Once the requirements have been identified and the type of solution is identified for a tax system implementation, the next step is to research the providers that offer that type of solution.

Every software package offers a different set of possibilities. It’s important that the team is aware of all the benefits and functionality of the different software packages before making the final selection. Failing to conduct a full evaluation of a reasonable number or all the potential solutions prior to selection puts the fulfillment of all the requirements at risk. (BTW - working with a consultant familiar with many different tax software options can  help the team narrow down the viable contenders that are suitable for the implementation.)

When making the software selection, the following are some (but not all) of the steps that should be taken:

  1. Determine the selection process. Will the process be an informal evaluation? Will it include on-site vendor demos? Will it be a rigorous RFP process? For larger projects and more complex tax requirements, a more rigorous evaluation should take place.
  2. Communicate the requirements and other critical information for demo scenarios to the vendors for their presentation. As a best practice, you want the vendors to demonstrate that their software can meet your specific requirements. They should not just demonstrate their standard functionality or perform their normal sales demo.
  3. A number of questions should be asked regarding the interface between the tax software and the financial systems. Does the tax software offer standard interfaces to the selected financial systems? Is there an additional charge for the interface? If needed, can enhancements be easily incorporated into the interface?
  4. Evaluate the experience level of the implementation specialists.  Do they have prior experience with the tax software and financial software?
  5. Evaluate the implementation experience and the availability of your in-house tax and information systems staff.  If the goal is to do as much as possible with internal resources, the staff will need appropriate training and time to commit to the project.

There are many other steps to consider - however, this is a good starting point.  For those of you considering a new tax system - I’ll be discussing this process in greater detail (as well as other implementation-related matters) in the Sales Tax Institute’s upcoming Best Practices in Systems Implementation webinar on February 21.  For those of you who have gone through such a system implementation – how does the above list compare to yours?  Are there any items you would (in hindsight) add to the opening list?


Other recent “Sales Tax Automation & Software” posts by Diane Yetter:

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