This is a guest post from our friends at Imagination Media
At Imagination Media, many of our Microsoft Dynamics RMS retail customers use the versatile and powerful Magento platform to power their eCommerce solutions. We’re huge champions of Magento ourselves. In fact, over the years, we’ve evolved into a Magento-centric solutions provider – specifically concentrating on small businesses who desire and need integration with various ERP and POS solutions.
We export products from Microsoft Dynamics RMS to Magento through our own connector, and pull order data back into RMS from Magento.
- Our clients manage most of their product data inside of RMS.
- As products enter into their inventory, they are automatically pushed up to Magento.
- When a sale occurs on the Magento store, the order is pushed to RMS.
- For the order being pushed into RMS, we bring in customer information, item sold, qty, subtotal, tax & shipping charges.
- Once an order is shipped the inventory commitment is automatically adjusted in RMS and Magento.
- Shipping confirmation and tracking is pushed into Magento.
One of the interesting situations that has evolved along with our services and clients over the years involves RMS tax. And thankfully, we discovered TaxJar along the way. Getting to know TaxJar has made both us and our customers very happy.
Before TaxJar: The Sales Tax Nightmare
Understanding RMS tax is actually quite simple. The tax is calculated based on the location of the actual retail store the sales are originating from. You can define the sales tax codes, and details regarding any sales taxes you want to apply, at the specific retail store. Then you simply assign the appropriate sales tax to each item. In the past, many of our RMS customers were taxing web orders from Magento in their respective states based on a singular tax rate of the location they shipped from. This was an inherently flawed practice – and a true accounting nightmare.
The accounting nightmare became very apparent to us when we found out one of our customers, based in Nebraska, was manually calculating sales taxes owed for web orders due to the fact that they have sales tax nexus in Nebraska. To complicate the matter even more, they had to collect sales tax on shipping charges in the state of Nebraska, even though they were listed separately from the price of the item. They would input all of their web orders into an Excel sheet they had created. In one column, they would input subtotal plus shipping charges, and in another column they would input the zip code.
After using several fancy formulas they had spent hours inputting, they would then be able to properly calculate the sales taxed they needed to pay. This almost always resulted in a loss for them. They would calculate sales tax incorrectly on the Magento Store based on tax rate of their actual retail location, and then pay the difference out of pocket.
How TaxJar saved the day!
Thanks to TaxJar and their excellent and efficient Magento plug-in, we soon discovered a simple, easy-to-use, and extremely affordable solution to this challenge. When we import orders from Magento back into RMS now, we simply use “TAX” as a line-item on the order. We no longer calculate taxes owed for web orders coming from Magento inside of RMS reporting.
In turn, our RMS customers now pull their tax reports from the web – directly from TaxJar. All of the information needed to file sales tax returns is ready to go and waiting, right there inside of TaxJar.
This TaxJar-powered procedure has greatly simplified the tax process for our RMS customers. At first, we only recommended that clients based in complex-tax states use TaxJar. But today, we recommend that all our clients use TaxJar for web-based tax calculations – and pull their tax reports directly from TaxJar. Many of our customers are now using TaxJar to calculate taxes on other marketplaces as well, including but not limited to eBay and Amazon. This utilization has removed the complexity (and anxiety) of worrying whether or not the proper sales taxes are being collected in various channels for our clients.
Simply put, TaxJar has helped save many of our customers hundreds of hours when it comes to accounting for taxes. They no longer need to input hundreds of orders into fancy Excel sheets. They can just let TaxJar collect the proper taxes, generate the proper reports, and quickly file the proper sales tax returns. It all adds up to savings. Saving time. Saving money. Saving worry.
Who wouldn’t be happy with those kind of savings?
About Imagination Media
Imagination Media focuses on delivering brilliant, intuitive, and effective integrated solutions built on the Magento and Shopify Plus platforms to small business – empowering retailers from all industries to seamlessly integrate their online and in-store operations.