Global Tax Automation: Need of the hour
Many businesses face substantial hurdles when it comes to export and import tax compliance. Managing constantly changing trade regulations from authorities all over the world is a difficult task. Big firms and companies are now prioritizing the development of a tax function model that enables the flexible and effective delivery of tax compliance across various locations. Besides all this, it also offers real-time tax rates and rules, configurable tools, and support for e-filing.
Ecommerce is evolving, and mobile commerce and personalization are two of the most crucial trends for online retailers today. Even amid a pandemic, India's internet and e-commerce sectors have become one of the country's fastest-growing sectors. Online shopping has exploded into a thriving new market. Even reputed retail firms with well-established stores now have e-commerce portals to keep customers from going elsewhere.
If you have a catalog of products that you want to trade globally, you should consider developing an effective trade compliance plan. Commodities intended for cross-border transactions must be evaluated, along with all trade regulations.
When it comes to cross-border sales, global tax compliance is often overlooked. Small and medium-sized businesses are increasingly looking for global market opportunities, but they do not have enough resources to deal with trade compliance.
Let us gain some understanding of global compliance and see how investing in robust compliance management can pay dividends to SMEs
What is Global Compliance
Global compliance means that an organization is meeting and adhering to all of the laws, obligations, regulations, rules, and standards, both locally and internationally.
Global invoicing and tax compliance is complicated, fragmented, and ever-changing, posing a problematic situation for globally engaged businesses. Furthermore, as the use of E-invoicing grows across the world, a plethora of new rules, mandates, and compliance requirements have emerged. In practice, global organizations must understand various local and cross-border requirements, build solutions to meet those needs, and then manage change in the business environment as requirements constantly change.
Besides this, compliance breaches of export regulations can result in huge fines, criminal penalties, and the loss of export privileges. To avoid such challenges, many organizations are using tax automation.
A cloud-based compliance solution will help businesses of today a great deal. Such platforms help you determine HS code classification, gauge the import duties, and file taxes.
Calculating and collecting indirect taxes and ensuring compliance can be a major challenge for businesses. This is especially true for small and medium-sized enterprises (SMEs).
But with tax automation, companies can combine their internal knowledge and resources with the power of technology. When you automate your tax filing, indirect tax filing will be much easier.
Small firms can increase accuracy and report their indirect tax liabilities by automating tax processes. Tax automation can help small businesses save time, money, and the headaches connected with indirect taxes.
Let us look at the primary benefits of employing tax automation
Why should you automate global tax reporting for your business?
- Improve Productivity: Businesses can use automation to adapt to changing rules to work smarter than hard with more focus on productivity.
- Automation saves time and money by reducing errors: Minimizing your expenses is one of the most important things you can do as a business leader. Tax errors can be expensive, so avoid them whenever and wherever possible. When converting figures from sales data to tax data, errors can occur. Compliance automation avoids these issues and helps to reduce potential points of error. According to the report Automation in the Workplace by Smartsheet, workers seek to spend less time on tedious manual chores like data entry and more time on rewarding elements of their jobs.
Employees think that automating compliance will minimize the wasted time (69%) eliminate human error (66%) and make up for hours lost to manual, repetitive work that might be automated (59 percent).
- Monitor tax compliance: Another area of concern is compliance returns. Compliance returns may contain errors, leading to audits. According to some experts, government auditors will scrutinize filings for errors more closely. Monitoring tax compliance is an online fraud prevention tip. Without automation, remitting sales tax as a business can quickly become an overwhelming task.
- Manage a variety of tax requirements: Taxes vary across different jurisdictions, and it is difficult to keep track of these differences. Without the need for an in-house expert, automation can help in keeping track of all these requirements.
Tax automation is now recognized as a critical need by businesses of all sizes. Having the correct taxes on your invoices solves cash flow, reporting, and compliance issues, avoiding penalties if an audit occurs.
Please contact our team to learn more about global tax compliance.
Avalara has been assisting businesses, particularly start-ups, in filing their tax filings effectively year after year. We provide tailored solutions while using industry best practices. This enables business leaders to solve difficulties methodically, hence streamlining processes. Click here for more information on our services or to learn more about our tax automation products and services.
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