Thanks to our partners at Kensium for this blog post.
Two years ago, on June 21, 2018, the Supreme Court issued a judgment on a case that would profoundly affect eCommerce sellers across the United States. In South Dakota v. Wayfair Inc., the court ruled that individual states can require online sellers to collect sales tax on their sales within each state.
This ruling created a hefty administrative and compliance tax burden for online merchants shipping nationally. Ecommerce companies had to begin accounting for various state tax laws, and even different county tax laws within each state.
To stay compliant with the wild variation of tax laws between different states, an online merchant would need to categorize every one of their products correctly. With over 14,000 tax jurisdictions and over 3,000 product tax categories, that would not be an easy task.
TaxJar’s technology and customer-first approach to sales tax automation, relieves the headaches of manually accounting for the differences from state-to-state and decreases the risks associated with compliance. With the fastest sales tax API, more than 35 integrations, and innovations including AI-driven product categorization, TaxJar can support businesses of all sizes.
And now, TaxJar connects directly Acumatica to provide real-time sales tax calculations on every invoice and transaction you process, with their new Certified Application.
Consider Implementing Acumatica ERP Through Kensium Solutions
Sales tax compliance has now become a moving target, a tough challenge for any size business. If you’re an online merchant expanding nationally, the only way to prepare yourself for this annual headache is to automate sales tax operations. Our recommendation? Integrating a best-in-class tax automation service like TaxJar with a complete cloud ERP solution like Acumatica.
ERPs are the lifeblood of many businesses, both big and small. An ERP, or enterprise resource planning, is a set of business software tools that integrates data from all the departments and functions across a company onto a single system. That system serves the unique and varied needs of different departments, catering to the needs of HR, finance, warehousing, and any other department and process a business has.
An ERP implementation can be a hefty undertaking, so we recommend using an eCommerce and ERP solutions partner like Kensium to ensure the implementation goes smoothly. Integrating new systems can fragment your transaction data, which in turn causes inconsistencies with accounting. This hurts your ability to stay compliant in all areas of your business, so many companies address it by investing in an ERP like Acumatica to unify their business processes.
Incorporating Automation into Sales Tax Operations
Before committing to any new automation software, merchants should first evaluate significant pain points in the tax set-up and administration process. Which items are the accounting department spending the most time on? Where are errors being made? How have the errors affected the company’s compliance?
If you find a major need to update tax operations in your business, your accounting and IT departments should research and ultimately recommend a new tax automation solution to company leadership. These decision makers must also consider compatibility with your business’ eCommerce platform, and any 3rd-party marketplaces your business uses to sell products. For example, TaxJar integrates automated tax collection with 3rd-party marketplaces like Amazon, PayPal, Shopify, Etsy, BigCommerce, and WooCommerce.
TaxJar Integration with Acumatica
The power of Acumatica comes from its ability to turn all data into a single source of truth. An Acumatica ERP instance that fully syncs with an eCommerce platform ensures that all data, from the moment the customer clicks “buy” to the moment the product is shipped, stays consistent throughout the company.
However, you cannot rely on Acumatica to categorize products into thousands of different sales tax categories. Merchants need a dedicated tax automation firm whose expert employees dedicate themselves to keeping businesses compliant through their software. TaxJar provides a sales tax database for all US jurisdictions, designed for a certified integration with the Acumatica ERP platform. The database maintains a record of the latest sales tax rates of all US taxable jurisdictions removing the guesswork.
The ideal sales tax automation software integration automatically categorizes transactional data coming from the ERP. At Kensium Solutions, we recommend taking it a step further by integrating Acumatica with an eCommerce platform like Magento. In this case, when one of your customers buys a product, the purchase data from the Magento frontend is synced immediately to the Acumatica backend. Then the TaxJar/Acumatica integration does the rest. No need for manual input at any point.
Merchants of all sizes in need of automation should consider TaxJar. It’s a good fit for smaller merchants, and costs three to four times less than comparable solutions. Plug-and-play deployment takes less time and effort than a major replatforming and supports moderate to high transaction traffic. If you are serious about using TaxJar, or any tax automation vendor, it is often a wise move to consult ERP/eCommerce implementation experts such as Kensium to see how to integrate their services best. Kensium can both advise you before deciding which vendor to use and work with you to implement the software after choosing a vendor. For more information on building end-to-end solutions for your eCommerce website, check out Kensium Solutions.
Learn about TaxJar’s Certified TaxJar Application.