My name is Patricia Pelino and I worked for a leading sales tax software solution provider for over 20 years - as a tax research analyst, business analyst and finally a tax consultant.
My goal is to open a dialogue regarding automation-related issues, concepts and trends which will benefit the small-medium business audience as a whole. (That said - if you need specific assistance – feel free to contact me directly through my bio page, using the link above.) And finally – just to make things clear from the start - it's not my plan to endorse or recommend any products (regardless of vendor) in this venue. What I can and will do however is try to be an information conduit and a gate keeper – so that lively dialogue ensues about sales tax automation.
So - sales tax automation. Why in the world would you want to do something like that? Save time? Sure. Utilize the tax team for more strategic and revenue focused assignments? Absolutely! Save money? Eventually. No question - sales tax automation can deliver many advantages. However, the reality is that implementing an automated tax calculation system can be expensive, time consuming and stressful – and that’s when things go according to plan – which they usually don’t for various reasons- sort of like Murphy’s Law.
There are some excellent sales tax solutions available. However, in spite of what you may read in some of those Marketplace/Main Street articles about the ready availability and ease of sales tax solutions – most sales tax automation projects are not “plug-and-play” scenarios. While there are some select situations where that may work (although obviously requirements will vary by company - and certainly by size of company) it generally takes a team of diverse individuals with a deep understanding of various aspects of a company’s technical and tax operations to bring an implementation project to a successful “go live” date.
So what do I consider the right internal implementation team? Generally - an internal implementation team can be defined as a cross-functional group of subject matter experts (SMEs) from Finance, Tax, IT and Software Development. (Tax may well be a part of finance, but their processing needs and timelines for monthly rate and rules updates can be different than the finance group’s needs.) Other departments may also be included based on the industry and need for SME input. (For example, a retailer may want to include the folks who work with coding the merchandise before it is entered into inventory.) This core team is charged with reviewing the various automated software solutions available – and after careful review and requirements analysis – recommending the software solution that would be the best fit for the organization overall.
The purpose in having the cross-functional team is to have as complete a picture as possible of the processing needs of the various groups impacted by the installation of an automated software solution. That said, during my years as a tax consultant, I observed that most implementation projects were frequently driven by departments other than tax (often IT) , so it was their budgets and their timelines which were used to define the project.
While IT understands a project’s technical requirements, it’s important that Tax provide the guidelines for what information has to be passed from the ERP to the tax software in order for the tax to be calculated correctly and develop appropriate test scenarios. (While these are all important things to a tax department – they may not be on the radar of the other groups involved.) Tax can also then ensure that the go live date doesn’t interfere with a sales tax returns reporting period. :)
Projects which considered tax needs from the beginning usually fared better when it was time to request specific features, functionality and development resources. So if you are a tax person - this is something you may want to consider when you hear that an automated tax solution is being considered. Where does your department fit into the picture as far as requirements, deliverables, budget, and timelines? It’s up to you to ensure that the lines of communication are open and that your voice is heard. And that needs to happen before the software review begins – and before the budget is set and approved.
So tell me – what did your internal implementation team look like? How much was the tax department involved? What role did they play in the evaluation of the automation solutions that were reviewed? And how much did their input count when the decision to buy was made? If your answer is “not much” how would their involvement, recommendations, and comments have made a difference in the whole process – from what to buy, to implementation, to testing, to go live?
And if you are still in the “what to buy” stage and haven’t included your tax folks – what are you waiting for? Here’s your chance to build a great relationship with a great bunch of people who like you, want to do their job.
I look forward to learing about your implementation experiences!