It’s 2024 and most companies that view themselves as “progressive” have turned to automation to simplify their processes and drive efficiency. So, why should sales tax compliance be an exception?
Instead of facing challenges due to limited internal resources, losing profits by overpaying sales tax, and risking penalties from audits, it’s entirely possible to automate all of this and redirect your focus towards activities that actually generate revenue and contribute directly to your business’s expansion and growth.
What is US sales tax software?
It’s a tool that automatically calculates taxes for each sale and monitors regulations across various states and jurisdictions – something you’d otherwise have to do manually while trying to run your business. That’s the short of it.
Here’s the long:
Sales tax software calculates sales tax by integrating with your existing ERP, HR, and billing system. All your important data such as your customer location, product details, sales amount, and other invoice information gets transferred to the automation system. Once received, the automation system calculates real-time tax rates for different regions, ensuring accurate processing and fulfillment of your sales and use tax documentation needs.
This means you’ll be charging the correct amount of tax based on the customer’s location and the products or services you’re selling.
Key features of US sales tax solutions
Who wouldn’t want to be 100% compliant with minimal effort and have peace of mind? It’s totally doable with automation.
Here’s what the best sales tax return software on the market can and should do for your business:
- Automatically calculate and apply accurate tax rates with its automated sales tax engine
- Monitor your sales activity across different state nexus thresholds and notify you when your business meets the economic nexus criteria in a new state
- Provide you with real-time insights into your tax liability, exemptions, and audit risks with customizable reports and dashboards
- Centralize tax information for better organization and improved visibility
- Provide comprehensive end-to-end tax support at a reasonable cost
Four benefits of US sales tax software for your company
Sales tax software provides an all-in-one solution for achieving compliance and turning tax season into a less-taxing experience. Here are just a handful of ways how.
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You get to expand your business while staying on the right side of tax laws
Tax laws are always and will always be evolving. If you’re serious about growing your business, you need to prioritize activities that focus on customers and bring in revenue – and unfortunately, playing tax collector is not one of them. Sales tax automation software can simplify your workload by automatically updating to reflect any tax law changes, which means less stress for you and fewer chances of accidentally breaking the latest tax regulations and facing fines.
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You won’t accidentally dip into the wrong funds
One of the major benefits of automating your sales tax is that it ensures you’ve got the necessary funds at the ready precisely when your sales tax bill comes due. This is all thanks to the thorough organization of financial data, which effectively prevents errors and misrepresentations. You’ll never accidentally confuse sales tax collected with your available cash because you’ll have a proper system in place to manage cash flow effectively.
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Customers won’t second-guess your professionalism
As an online business, your tax rates – just like everything else on your website – must be 100% accurate to show customers that you’re professional and reliable. Even a minor error in charging the incorrect sales tax rate can cause wary shoppers to question the reliability of your entire site and potentially drive them away and negatively impact your sales and brand reputation. Automation software improves transparency for your customers by showing both the sales tax amount and the exact sales tax rate.
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You’re less likely to get audited
There’s nothing worse than having a tax auditor show up unexpectedly and disrupting your already hectic schedule by poking into every single corner of your business. This is less likely to happen when you make fewer errors with your sales tax. According to Forbes, “Taxpayers that file consistently on time and accurately are the least likely to raise red flags for auditors.”
Authorities pay very close attention to audits because sales and use tax revenue contribute to nearly a third of the total state tax revenue. They don’t always need a particular trigger to launch an audit – sometimes, your business will be randomly selected. Of course, it’s still wise to try and limit the possibility of unintentionally triggering one.
Sales tax software can help to easily prevent late and inaccurate reporting and filing since it does the math for you and reduces the risk of human error.
Choosing a US sales tax software
As sales tax gets more complicated and overwhelming, especially for small businesses, it’s more important than ever for them to rely on software that can help them get more done.
Here are some key factors to consider to assist you in making an informed decision:
- Find a model that fits your budget
- Choose user-friendly navigation
- Look for software that integrates with your current transaction system
- You’ll need good customer service to resolve issues and answer any burning questions
- It should be clear to you that the solution can scale alongside your business
Look for additional features like:
- Automated data recording and submission to save time
- Real-time reporting for instant tax insights
- Nexus management for compliance across jurisdictions
- Audit-ready reports for simplified audits and compliance checks
Complyt: your US sales tax solution
Sure, you might be compliant now – but US sales tax obligations are complex and can quickly change tomorrow. Stay fully compliant across all states you’re selling to with one easy-to-use automated solution. Complyt takes care of registration, calculation, filing, and remittance on your behalf.
Experience firsthand how Complyt effortlessly integrates all essential features to transform your business’s tax management when you schedule your free demo today.
