CPAs are much like doctors in that their clients, or patients, come to them for all the answers in the financial field whether it is the CPA’s specialty or not. Such questions often revolve around sales tax software: Which product should I use? Which products satisfy my business’ needs? Does my business even require this type of functionality? Clients think their CPA is an expert; it is in the CPA’s best interests not to prove them wrong.
There are numerous things to consider when making a recommendation of sales tax software to a client. A bad recommendation can be as detrimental to a CPA’s reputation as the absence of one.
“Taking the time to understand your client’s business and the requirements is critical as automation needs may vary significantly depending on the nature of the business model, the tax complexity of the items being sold, the client’s nexus profile, the volume of sales transactions and the types of taxes the client is subject to,” said Ken Crutchfield, vice president of software products at Bloomberg BNA.
“Another key consideration is the ability of a sales tax automation solution to integrate, or connect, with a broad variety of accounting, ERP, mobile commerce, e-commerce, payment, and CRM technology products,” said Julie Lubetkin, VP of marketing, channels and partnerships at Avalara. “For instance, if the CPA’s client runs their business on NetSuite and sells their products online using the Magento e-commerce platform, the sales tax software that’s selected should be pre-integrated with these solutions for ease of adoption and the best user experience.”
There are many bells and whistles associated with sales tax software products. A CPA should have at least a general knowledge of most of them and be able to know which ones are most valuable to his or her clients. While some features may not be of much help to a client, the usefulness of others will have a CPA seem like the most knowledgeable professional in the industry to clients.
“Some of the key features include the ability to precisely determine taxation jurisdictions to the local level and support the precise taxation rules for a particular product or service,” said Mike Sanders, vice president, product management at Wolters Kluwer Tax and Accounting. “Additionally, the software must provide the ability to utilize the taxation data for not only recurring filing requirements, but also customer service inquiries, financial review and reconciliation as well as future audit support. Having access to this level of revenue and taxation information is key to the CPA over the long-term.”
Service Augments Technology
“The most valuable functions of sales tax products are those that combine software and services to help businesses identify, validate and correct tax boundary and rate issues to address, imprecise methods used for jurisdiction determination (e.g., ZIP code), challenges in determining whether a location is inside or outside of city limits, incorrect or out-of-date ZIP+4 or street address data and missed tax rate and boundary changes,” said Crutchfield.
Real-Time Results are Crucial
“The most valuable function of sales tax automation software, especially cloudbased solutions, is the ability to provide real-time sales tax rates and rules data across thousands of jurisdictions nationwide and internationally, as well as giving clients the option to outsource their sales tax returns, remittance and exemption certificate management obligations to a trusted provider,” said Lubetkin.
Tax Challenges by Industry Can Provide Customized Results
“The valuable functions featured in sales tax software include end-to-end support – from determination to reporting to compliance, specialized support for tax challenges by industry and control and customization to address unique business needs,” said Carla Yrjanson, VP of tax research content at Thomson Reuters.
It is not how knowledgeable a CPA is in a certain aspect of the accounting industry but how knowledgeable they can become. A good recommendation, particularly with sales tax software, can be worth as much to a client as a successfully filed 1040.
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