It is imperative to consider sales and use taxes as part of every NetSuite implementation that involves financial modules. Whether you’re a manufacturing, bio-tech, energy, retail, software or services enterprise, every customer, item and transaction has a sales and use tax component. In today’s economic environment, every jurisdiction is looking to recoup every penny from buyers and sellers—audits are on the rise, and companies need to be playing offense and defense.
Tax determination and calculation can be a daunting task. There is often a scramble to file the multitudes of returns by the twentieth day of each month, as so many people tend to push it off until the last minute. With some upfront thought and consideration for how your sales and use processes connect with your overall reporting, you can turn this compliance nightmare into a smooth monthly process and free up time to devote to growing your business.
There are a variety of points to consider when developing your sales and use tax strategy, such as:
- Where are you required to file?
- Who are your customers? Are they resellers?
- How are your products and services taxed in each jurisdiction?
- What do you purchase in the course of your business?
- Do you have storage facilities?
- What is your monthly tax liability?
- How much time is spent each month on compliance?
- How informative are your sales and use tax reports?
- How do you manage your exemption certificates?
Just as there are many things to consider when thinking about sales and use taxes, there are equally as many ways to tackle them. You might consider internal manual processes, native NetSuite functionality, integration with a third-party tax application, or any combination of the same. Likewise, your valid options range from totally manual to fully automated with centralized reporting.
With over 10,000 U.S. taxing jurisdictions, each with its own rules, rates and regulations, putting a process in place to manage sales and use tax is critical. Integrating that process with NetSuite can prove beneficial and is especially recommended during an ERP implementation. Taking the time to do so up front can help avoid pitfalls down the line. If you missed that opportunity, however, it is never too late to improve the sales and use tax process, including any required integrations with your existing financial systems.
For more information about how to implement a sales and use tax strategy for your organization, please contact us at firstname.lastname@example.org or by phone at 855.437.7202.
By: Kevin Buckner – Colorado NetSuite Solution Provider