“Set it and forget it.”
That’s how most companies approach their sales tax compliance processes. However, some companies have long realized the bottom line impact that can come from implementing sales tax planning strategies. It’s my hope that you’ll want to explore the five opportunities I’ve listed below so you too can optimize your company’s bottom line.
Opportunity #1: Missed Exemptions
If your company qualifies for a sales tax exemption on certain purchases, make sure your vendors are actually honoring those exemptions. If you “set it and forget it,” you may not realize that they’re charging sales tax despite your request for an exemption.
Opportunity #2: Audit Offsets
If you find sales tax overpayments were made during an audit period, you should ask the auditor to factor those into their overall assessment. If you “set it and forget it,” auditors won’t go looking for those overpayments for you.
Opportunity #3: A/P Support
Give your A/P department the tools (e.g. tax matrices, cheat sheets, in-house training, etc.) to make sure they’re not processing unnecessary sales tax charges. If you “set it and forget it,” your company’s bottom line will be trimmed each day by payments that could be as much as 9% higher than they should be.
Opportunity #4: Tax Adjustments
Make sure your sales tax returns are prepared using all necessary pieces of source data. If you “set it and forget it,” you may be missing transactions occurring outside of your billing system that should be reducing your sales tax liabilities every month.
Opportunity #5: Bidding Blunders
If your company’s profit margins have been eroded in the past by overly aggressive bids, make sure your colleagues don’t use an overly conservative approach that anticipates more sales tax than will be required. If you “set it and forget it,” your bloated bids will hurt your chances of having a competitive edge.
If your company’s sales tax compliance process has been on autopilot, then I have a resource you need to check out.
Below is a link to an e-book that further breaks down these opportunities, provides case studies, and even provides a bonus opportunity that’s not mentioned above. Plus, it outlines a simple three-step process to bring these opportunities to life at your company. It should take about 5 seconds to download, about 5 minutes to read, and as a result it will arm you with the tools to start utilizing very powerful sales tax planning strategies.
Click Here for the Free E-Book: Sales Tax Best Practices – Five Overlooked Opportunities
Companies can no longer afford to have a “set it and forget it” mentality. Start to incorporate these strategies into your routine and you’ll see measurable results that will help you optimize your company’s bottom line.