The pandemic and global supply chain disruption have placed an unprecedented burden on manufacturers — and the need for automating manual processes is more pronounced than ever. One way manufacturing companies can lower costs with technology is to upgrade controls for sales and use taxes. Let's take a look.
With so many stressors bearing down on the manufacturing sector, companies need to be cautious about spending — and try to eliminate overpaying, wherever possible. One way to do this is to look at your company's sales and use tax processes for inefficiencies and errors. For example, do you:
Challenges facing manufacturers in the current environment are only exacerbated by changes in laws and regulations. According to Thomson Reuters' 2021 State of Corporate Tax Departments Report, nearly half of corporate tax departments haven't implemented effective technology and don't have the talent to use it. For example, the report found that tax data management and tax workflow management are the most underutilized features. Of course, smaller manufacturers may not have separate tax departments and may struggle even more with these issues.
On the positive side, 45% of corporate tax departments plan to introduce new technology and automation to address gaps in resources. Small-to-midsized manufacturers can also benefit from investing in technology to help manage their sales and use tax compliance.
Before you make tech expenditures, prioritize your goals. Know that the features associated with the greatest impact are tax provision and direct tax compliance. Overall, successful implementation of technology can lead to lower risk of errors, higher data accuracy, faster turnaround, improved reporting and cost savings. Furthermore, organizing data in a meaningful way increases control and makes it easier for your business to comply with laws and regulations.
If your company doesn't have a dedicated tax department or if your staff is unsure about how to improve processes to boost efficiency and cut costs, contact us. Although many elements of the current manufacturing environment are beyond your control, you can control what you pay (or overpay) in sales and use taxes.
Get in touch today and find out how we can help you meet your objectives.