As we talk to tax executives across the U.S. about sales and use tax returns outsourcing, we’ve found there are a number of misconceptions that prevent companies from considering this option. Understanding the truth about the issues and the marketplace offerings will prove that returns outsourcing can be a valuable alternative for a tax department.
Myth #1: Outsourcing providers don’t perform as well as in-house staff.
Not true. Their singular focus can make them even more efficient than in-house staff that can sometimes get pulled away on other projects.
Myth #2: Outsourcing is more expensive than keeping the returns function in-house.
Quite the contrary, our research tells us the number three reason that companies consider outsourcing is actually to reduce costs.
Myth #3: After outsourcing returns, it will become difficult to justify the tax department headcount.
Actually, most tax executives have no problem reallocating staff to higher value work, and demonstrating the increased value per staff hour.
Myth #4: Outsourcing reduces your control and visibility of the returns process.
In fact, effective reporting and continual communication from the outsourcing provider keeps the tax executive well in control.
Myth #5: All outsourcing providers offer the same thing, so just shop for the lowest price.
This is just not true. The biggest difference seems to be the steps beyond returns preparation. Does the outsourcing provider sign, file, and certify the returns? How do they manage funds? How quickly do they respond to inquiries?
Take a moment to learn the truth about outsourcing returns. There’s a host of details that can vary from provider to provider that will make a real difference. Companies must be sure to manage the RFP process carefully and thoughtfully. With the right provider it can yield significant benefits to your tax function. (Click here for the complete article)
Please remember that the Tax Matters provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information.