You know what you could lose if a tax collector comes to your small business with authorization for an audit. And you also know what could be lost if you don't offer your customers the best prices. Savvy entrepreneurs protect their businesses from larger loss, balancing between the two extremes, by investing in reliable methods to manage sales tax.
Avalara's many years of experience have helped them identify four of the most common approaches that small businesses use to deal with sales tax. They have listed these options in order of increasing effectiveness, helping companies recognize where they currently stand and where a better balance could be found.
- CME – "Close My Eyes" – This is the toddler's approach to sales tax. After all, if you can't see them, they can't see you. We all know how well that works out though. This non-management of sales tax should be avoided.
- WID – "When In Doubt" – This method leaves no stone un-taxed. It is the audit-phobia approach; if you charge taxes on all items, at all times, at max rates, you can be pretty sure the tax man cometh not. The trouble is that soon customers might stay away too. Winning business sometimes hinges on small details, such as sales tax amounts and word-of-mouth warnings to watch out for unnecessary charges. This route is legally safe, but not optimal.
- STT – "Sales Tax Table" – Or as might be a more accurate description: Single Sales Tax Table. This is one step forward for tax accuracy, one giant leap for tax automation. When a computer is so good at crunching numbers, it's silly to not have it running calculations for your sales tax rates. The trouble is that your typical computer is bad at knowing when the state or local legislature decide to change tax details. Which brings us to…
- ERP + DTE – "Enterprise Resource Planning plus Dedicated Tax Engine" – To be fair, Avalara didn't go so far as to create their own self-referencing abbreviation. But this is the optimal solution: your customized business solution integrated with a tool that specializes in the complicated, convoluted, evolving web that is sales taxation. This method ensures both full compliance and the most attractive pricing for your clients.
While AvaTax provides you with solid tax information, you'll want to be sure that your ERP system can make the most of this investment. A business software package that also integrates your entire operation — from the warehouse docking bay to the main conference room — can ensure that your up-to-date taxation info is leveraged throughout your business.
aACE 5 offers this kind of quote-to-cash integration. Our integration with AvaTax is a favorite service. It reflects the thorough attention to detail that can be see in the entire aACE system. Contact us today to learn more about how our cross-platform solution for accounting, CRM, and ERP can accelerate your business velocity.
"Unlike other solutions, you will never have to worry about not being able to collect, deliver, and/or report the data your organization needs. This product can fully tailored to fit your company's processes. If you want to gain control of your business and eliminate all of the islands of data that exist today, then I highly recommend that you give aACE a call." ~ Bryan Anderson, All Solutions 360 LLC