3 Improvements from Outsourcing Sales Tax Compliance

Tax professionals should consider a provider that offers unmatched customer support, while upholding a good reputation, and the experience to deal with different customers and issues that arise.

In my previous post, I suggested that given the rigors of today’s pandemic-impacted business environments, tax departments should consider the benefits of outsourcing sales and use tax returns. I covered a couple of things that outsourcing enables you to reduce: costs and audit risk. In this post, I’ll look at three things that you can increase or improve by outsourcing sales tax compliance, including your team’s ability to tackle high-value projects, controls and governance, and scalability:

  1. Increased staff value/ROI. Outsourcing sales tax compliance can be the first step to increasing the strategic value of the tax function. By outsourcing administrative tasks, you can re-deploy experienced tax staff to higher-value work like reverse audits, analytics and reporting, and tax research. Treasury colleagues also benefit because they no longer have to spend time on check requests and multiple wire requests. 
  2. Improved controls and governance. Outsourcing service providers can provide a level of consolidation, structure and automation that benefits all compliance stakeholders. Tax departments benefit from a single source of filing returns, funding the liabilities and storing the data behind the returns. This produces a standardized and repeatable process that is followed with great discipline and documented for review by Sarbanes-Oxley compliance groups, internal auditors and attest auditors.
  3. Improved scalability. Outsourcing can enhance the agility of the tax group and the finance function, as well as their ability to support change and growth. The cost of compliance is no longer fixed. If your compliance requirements expand, you don’t face delays because of the need to hire and train staff. When business growth translates to increased returns, the outsourcing service can be increased accordingly, simply by providing additional data files or adding entities to the monthly service. This gives you the ability to track compliance costs against business growth and benefit from reduced risk at the same time.

If you’d like to learn more, I encourage you to check out the Vertex whitepaper, 5 Reasons Why It’s Time to Consider Outsourcing Sales Tax Compliance.

Blog Author

Larry Mellon, Tax Directory, Vertex Inc

Larry Mellon

Tax Director, Chief Tax Office

See All Resources by Larry

Larry Mellon is a Tax Director in the Chief Tax Office, where he is responsible for providing insights, thought leadership and customer-centric direction to Vertex functional groups, supporting the continued expansion of Vertex indirect tax solutions and overall enterprise strategy. He has over 30 years of experience in sales and use tax compliance, risk assessment, jurisdictional audits, administration and management, as well as VAT compliance. Larry joined Vertex in 2005 as a Sales and Income Tax Supervisor and has served as Tax Manager since 2012, where he has played a pivotal role in elevating and advancing the company’s tax management offerings.

Prior to joining Vertex, Larry served as a Senior Tax Accountant and Property Tax Manager at Foamex International, Inc., a polyurethane and advanced polymer foam product manufacturer and marketer. Mellon also held multiple roles at The Franklin Mint and is a member of the Institute of Professionals in Taxation (IPT) and Tax Executives Institute (TEI).

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