Edge computing takes critical processing and moves it out of the data center, closer to where the customer needs it. For tax departments, that means more accurate and reliable tax calculations, among other things.
Think of a fitness app. If you have a fitness app on your wrist, it's monitoring your heart rate the entire time. Periodically, the app will send data to a centralized server so that you can look at reports and statistics over time. The same thing can be done for taxes.
The calculation point is the most important part of tax determination. You want the calculation to happen as quickly and reliably as possible. That means delivering processing at the point of need (like the app processing the runner’s heartbeat in real time) as the transaction is happening and then moving that data to a central point for reporting purposes.
Retail is a great example of an industry that really needs more advanced transaction tax automation at the edge. If you think of a retail brick-and-mortar location, it was always a pretty simple task to calculate tax. You knew where the transaction was taking place. Once you figured that out, you had a limited number of decisions to make. But that whole world has changed.
Consider buying online and returning to store, buying online and shipping to store, going to store and shipping to a home—all of these kinds of transactions are being done by most retailers now. And their tax systems have to accommodate for that.
What we see in the retail space is that point-of-sale software typically has a small calculator, and companies have to feed that calculator with data. That’s not a real tax calculation engine because it's not managing nuances that stores deal with every day, like shipping to homes and all-too-common challenging scenarios like tax holidays.
These complexities make it necessary for a retailer to have a true tax engine. A traditional tax engine calls out to a remote server, which is not practical. It’s inefficient for retailers to have massive servers in every store. Alternatively, businesses can opt for a small lightweight tax engine, and that's where Vertex O Series Edge comes in.
With O Series Edge, users log into the application and are able to configure their nexus profile, product mappings, and exemption certificates, just to name a few. This enables users to carve out the calculation component, utilizing it wherever it is needed without having to deploy the whole system, which requires a prohibitively large footprint.
Edge computing can help tax groups improve connectivity, availability, security and customer experience by moving the processing closer to the transaction. Vertex O Series Edge gives retailers access to these benefits and more.
Please remember that 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.