Are you missing or losing invoices? Have you created nexus in the last year?
In this blog post, Yooz and Avalara discuss how cloud-based AP automation and sales tax compliance can safeguard your business. They both will help you reap the benefits from automation and improve visibility into unpaid invoices & improve customer experience.
Reason 1 – Inconsistent Processes Create Challenges
The most prominent challenges in AP are manual data entry, invoice-to-payment matching, lost and duplicate invoices, and an inconsistent organizational AP process. Many of these challenges are frequently seen by those using a manual AP process and are exactly what AP automation software is designed to address.
Inadequate or outdated technology is another big challenge for AP departments of all sizes, particularly for those only using an ERP or homegrown tool. This challenge and those specific to more manual AP processes were only worsened by the pandemic. " According to a survey conducted by Yooz, 44% of businesses internationally said the pandemic significantly impacted their ability to process invoices."
Reason 2 – Paper is Outdated and Costly
Paper is now becoming the costliest and most dated way to receive an invoice, as it entails the supplier sending the invoice via mail or fax. This will slow down the process and make dealing with errors difficult and tedious.
A cloud-based AP automation tool with Optical Character Recognition (OCR) digitizes and stores all invoice types where they're easily accessible, but some labor is still required to scan the invoices into the system. Ideally, an organization should work with their vendors to move to email or e-invoicing methods to receive as few paper invoices as possible.
How can you safeguard your AP processes?
Real-time cloud-based AP automation solutions are designed to solve for those challenges for the AP invoice and payment process. Move the entire P2P process to the smartest, most powerful, centralized, online platform that's accessible anytime, anywhere.
This in turn will reduce paper invoice volume and eliminate those filing cabinets full of bulky paper documents.
With cloud-based invoice and payment automation you’ll see:
- Quicker and more efficient approval of invoices and payments
- Savings associated with early payments
- Improved visibility into the entire invoice to payment process
- Increased employee productivity and satisfaction
Their unique solution leverages Artificial Intelligence and RPA technologies to deliver an amazing level of automation with extreme simplicity, traceability and end-to-end customizable features. It integrates seamlessly with more than 250 financial systems, exceeding any other solution on the market.
Reason 3 – Tax Compliance is Confusing and Everchanging
Location, location, location isn’t just for the real estate industry anymore. It's even a more important issue to many businesses in the U.S. when it comes to collecting sales taxes. Selling goods to customers in many different states can make sales taxes complicated and confusing.
Questions to ask yourself. Do you:
- Have traveling salespeople that physically enter a state to conduct business?
- Utilize contract labor in any way or for any purpose in conjunction with the sale of tangible personal property or the performance of a service?
- Have marketing personnel and/or other company representatives, or are you affiliated with in anyway individuals that enter the state for purposes of conducting business or representing your business in any way, either directly or indirectly?
- Own or lease any real or personal property located in the state?
- Participate in any trade shows or exhibits that promote your products or services in the state?
Determine if you created nexus in any NEW jurisdiction over the year
Have you sent an agent or sales representative to a new state? Delivered and installed a product in a new state on a regular basis? Did you hire new employees that work from a remote location? Answering yes to any of these questions may mean that you will have nexus in a new state.
Nexus laws are often quite complex, and each state is different. Knowing where you have nexus is crucial for businesses, yet it is a specialized area that requires state-by-state research and one that changes constantly. It can take a lot of time and effort to make sure you are getting nexus right, and if you don’t, the consequences of noncompliance can cost you even more time and money.
Reason 4 – Your Manual Process Puts Your Business at Risk
Using incorrect tax rates, not filing in places where you’re obligated to register and collect and having incomplete or missing exemption certificates are just some of the tax errors that can create risk for your business.
Not all companies and industries are safe. Distributors have a collection of exemption certificates up in the rafters to collect dust or in filing cabinets. They’re often outdated and forgotten about which in turn will put your business at risk. You could even be expanding nexus due to wholesale items because now they’re taxable sales.
This is why manual sales tax management is time consuming and expensive.
Even after you spend that time and money, most believe that auditors will still find errors. So many are spending big money on compliance, but not reducing their risk.
The audit lookback period can be from 3 to 10 years.
- Seemingly minor problems can compound over this period
- A single missing exemption certificate can have a big impact
How can you safeguard your sales tax compliance?
Avalara Sales Tax Suite can help you address each of the sales tax compliance challenges above.
Ready to learn more and dive into the 4 Reasons to Safeguard Your Business with Cloud-Based Automation and Sales Tax Compliance?