Drive Accuracy and Ease By Bringing Sales Tax Management Into Your ERP

by Jennifer Clark

In eCommerce, managing back-end operations often slips through the cracks. But innovative ERP solutions drive business gains by fueling efficiency and contributing to major data management improvements. This is something that pays dividends in sales tax management, where complex processes and frequently-changing rules make it difficult to keep up with everyday demands using manual processes.

When it comes to sales tax compliance, many eCommerce brands end up with a tacked-on solution that can leave them scrambling to keep up with industry regulations and technical requirements.

TaxJar integrates sales tax management into ERP systems like NetSuite and Microsoft Dynamics NAV. As a result, remote sellers using these platforms are better positioned to automate their sales tax compliance and keep up with the shifting demands in the industry.

Major Hurdles to Efficient Tax Management

Dealing with sales tax is inherently complex. Here are the four primary factors that contribute to this complexity and how you can use sales tax software to simplify that burden.

1. Dealing with Multiple Channels

Managing sales tax independently on each channel becomes a complicated and onerous process. If you’re doing it on your own, you have to compile data across various systems. When you have sales tax software built into your ERP system, your sales are tracked and the solution automatically applies appropriate sales tax rules relative to the channel.

2. Operating in Different States

Retailers need to understand the different laws for each state they sell into, identify the location of customers and apply the appropriate sales tax. Thankfully, the ERP can track customer addresses across channels; and with built-in sales tax management tools, it can apply the correct tax regulation and track this activity automatically.

3. Filing Tax Data

States have distinct filing processes that ERPs can simplify. The ERP system will capture the sales data, while your sales tax software will automatically compile reports and file your returns with the state.  

4. Maintaining Accuracy

Reporting and managing sales tax-related processes requires considerable data accuracy. By integrating sales tax compliance software into your ERP, you avoid duplicate data collection. Information can be stored in the ERP and accessed seamlessly, eliminating any manual data entry or duplicate records that create confusion and potential errors. 

4 Ways to Deal with Sales Tax Complexity

Remote sellers have a few options to help them simplify their sales tax. The four most common choices are:

1. Eliminate Unnecessary Manual Processes

When you are tracking sales tax in spreadsheets or similar means, you’re forced to manually check your data against tax regulations, compile reports and complete the filing. When you have dedicated sales tax management solutions in place, the system checks the raw data against current legislation and generates reports, or better, files it with the state. 

2. Understanding Categories and Rates

Manual data entry often involves completing ZIP-based calculations, which tends to introduce opportunities for error and time-consuming operations. Sales tax applications automatically categorize sales and calculate rates accordingly, dramatically simplifying operations for your team.

3. Knowing When to File

Keeping up with filing dates and compiling records leads to unnecessary complexity as you’re forced to track multiple deadlines and filing formats. Sales tax software doesn’t just automate report creation, it also features built-in filing tools that alert you when to file and send your reports to the states directly from the app.

4. Using an ERP App

ERP tax management apps can gather sales metadata and automatically analyze the tax ramifications. A system can organize your products into proper categories and adjust those rules based on the states where you sell. From there, sales tax can be automatically applied at checkout, and the ERP extension gathers all the data you need for reporting and filing.

Keeping up with sales tax can be a frustrating, time-consuming issue for eCommerce stores. To simplify this, ERPs with built-in sales tax programs can automate most of the tasks by feeding the relevant information into the format created by the sales tax solution. 

Instead of manually grabbing data from your ERP and building reports yourself, your team simply opens an app to track any data and simplify filing demands. This lets you automate complex tasks that would otherwise distract you from running the rest of your business. 

To learn more about TaxJar’s integration with NetSuite, check out this case study featuring Heartfelt Creations and read their story around launching NetSuite with TaxJar Plus as their preferred ERP and sales tax management solution. 

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