3 Improvements from Outsourcing Sales Tax Compliance

  • March 24, 2021

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.

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. The views and opinions expressed in Tax Matters are those of the authors and do not necessarily reflect the official policy, position, or opinion of Vertex Inc.

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