Avalara CRUSH Global: Experts peer into the future of commerce, tax compliance
There are global opportunities for businesses in today’s economy, but capturing them requires a significant amount of up-front planning — particularly around operations like tax compliance.
That’s according to the experts who appeared this week at Avalara CRUSH Global, a virtual conference focusing on the impacts of changing government policy and accelerating technology on businesses and tax compliance.
CRUSH Global was designed for business people who are “confused by, curious about, or obsessed with compliance,” said Avalara co-founder and CEO Scott McFarlane, and it provides “perspectives, resources, and connections that will help you navigate tax compliance issues that are constantly evolving.”
The virtual conference was streamed from Avalara’s home city of Seattle and featured conversations with leading global experts as well as access to CRUSH City — a virtual business district featuring webinars, videos, and other content specific to a range of industries including manufacturing, small business, and hospitality.
“It's like the Davos World Economic Forum but with better coffee,” quipped co-host Trace Dominguez, an Emmy-nominated video host and creator of content related to science and technology.
CRUSH Global kicked off with three main-stage panels discussing key contemporary business topics:
- Managing Growth in the Global Economy
- Staying Ahead of Shifting Government Regulations
- Applying Digital Transformation to Finance and Accounting
Here’s an overview:
Growing companies must manage supply chains, inflation, and people
In 2022, companies are dealing with supply chains still snarled by COVID-19 lockdowns, inflation that is a worldwide phenomenon, shortages of workers with specific skill sets — and rising customer expectations.
To overcome these challenges, businesses need to better manage data, stated members of CRUSH Global’s leadoff panel.
Analytics are key, said Dara Meath, the chief information officer for digital and ecommerce at Conair LLC, an Avalara customer.
Good data can tell business leaders “what has sold well, what’s happening now, how are the trends changing,” she said.
WooCommerce Chief Revenue Officer Craig Cohen agreed. Companies need to analyze their supplier bases, he said, with “technology to control and manage this … grabbing the data from all these different inputs.”
Companies also need to plan carefully before moving to take advantage of international opportunities, the panelists said.
“I come to (your) site, I need to have it in my language,” Cohen said. “I come to the site, I need to have it in my currency. I come to the site and I need to be able to see products that I can actually get in my country in a reasonable time.”
He continued: “There are a lot of different pieces that go into that, and then you tie in the back-end piece of that, with the payments and everything. How do I have regulatory compliance that goes with this to make sure that I’m eligible, I’m registered in that country, I actually have a business entity?”
Meath agreed: “There are a lot of operational and structural things you need to think about in this global business.”
Yet while technology gets a lot of focus, businesses can’t lose sight of the fact that they need people — particularly people with the skills to use the new technology to its fullest.
“Talent is definitely one of those things that’s been a challenge,” Meath added. “Not just to bring it in, but to retain it and keep it.”
Successful companies need “the right people who are good around digital,” Cohen said. “It’s all about the customer experience. If [shoppers] have a bad experience, the site is slow, you're out of stock, you take them someplace that glitches and then their credit card doesn’t work … you’re going to lose them and they’re not going to come back.”
Governments seek new revenues with new kinds of tax
Companies doing business in Europe and the United States have seen dramatic shifts in tax compliance requirements in recent years, members of a second group of panelists said.
In the United States, the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc. spurred a wave of changes in tax laws, as states moved quickly to capture previously untaxed revenue streams from online commerce, said Daniel Bunn, who is executive vice president at the Tax Foundation.
In Europe, the issue is that the pace of reporting requirements has accelerated dramatically, said Gino Dossche, who is EYs principal for VAT tax practice. European nations have gone from requiring companies to submit monthly or quarterly estimates of taxes owed to requiring them to submit real-team data on transactions.
“There’s definitely more data, more frequently, that needs to be reported,” he said. “For a business, that means that you have to have a more holistic view around VAT compliance because you cannot make up your report anymore.”
Governments, which have borrowed and spent heavily during the COVID-19 pandemic are faced with a difficult choice, said Dr. Lindsey Piegza, chief economist at Stifel. Inflation is creating pressure for them to pass tax relief measures to lessen the blow on lower-income families, but at the same time, those governments need revenue to pay down their debts.
Now, “governments are seeking additional revenue,” said Piegza. “They’re going after ecommerce, internet, environmentally based taxes as well.
“Governments are going to be looking for more revenue and they’re going to be looking in any area they can,” she concluded.
So far, no U.S. tax jurisdictions have adopted European-style real-time compliance requirements, but the panelists said it’s just a matter of time.
“While it still may be several years out, once the shift begins to take hold and states see how efficient it is, this is going to spread like wildfire,” Piegza said.
Dossche agreed: “It’s really a when, rather than an if.”
Digital transformation will elevate accounting and finance departments
The role of accounting and finance departments will change dramatically as companies adopt more modern business technology, members of a third panel said.
“The core value of a company is data,” said tech entrepreneur and ecommerce futurist Catherine Barba. Accounting departments are the “guardians” of that data, she added.
The capacity of technology today is growing at an exponential rate, said Paul Farrell, the vice president of product management at Oracle NetSuite.
Ten years ago, a company could study best practices, adopt them and know that they’re going to achieve success.
But “things are moving at such a rapid rate today that technology’s outpacing that,” he said. “This is the first time in history that technology has outpaced best practice.”
The pace of business has increased dramatically, Farrell continued. “Gone are the days when you could do things at the end of the month, or the end of the day, or in a batch. It needs to be real-time and it needs to be available.”
To keep up, many companies have adopted technology to automate basic accounting functions, said Meath, who also joined the third panel. That’s had a big benefit for companies that have made that investment, she said. They see less human error, and have better communications.
“The ROI is there,” Meath said. “We’re transacting in milliseconds, versus paper.”
But while companies invest in new technology, they must have a vision for what they’re trying to achieve, Barba said. Pointing to her time on the board of directors of Renault/Nissan, she said their goal was “transforming from a car company taking advantage of digital tools to a tech company that sells cars.”
Doing that meant making strong investments into tools that helped leaders understand their customers, Barba said. But the company also made investments in hiring the right people and incentivizing them.
Learn more at CRUSH City
CRUSH Global concluded on May 18, but videos of the main stage panels — plus all the content from CRUSH City — is available for free for 30 days at AvalaraCRUSH.com. In addition, keep coming back here to the Avalara Tax Desk for more coverage of the issues and insights from the CRUSH Global event.
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