Top companies were able to dramatically reduce their corporate risk profile, and maintain compliance with sales and use taxes and value-added taxes, by leveraging automated tax management tools, ranging from tax calculation engines, filing and remittance systems, to audit control solutions, according to a new report.
The report, written by the Aberdeen Group and sponsored by CCH, found that the use of automated tax calculation, preparation, filing, and remittance is becoming more pervasive in a globalizing economy. While such solutions are available, the benefits of audit exposure and compliance risk reduction can only be realized if these technologies are aligned with process improvements.
Over 100 companies were surveyed between March and April of 2010 to identify the best practices and current capabilities in transaction tax management. The top-performing companies demonstrated that a strategic combination of process re-engineering and software automation should be implemented to achieve a high-level of success in SUT and VAT.
Top-performing companies are growing steadily to include new sales territories and supplier relationships each day, said Aberdeen Group senior analyst of financial management William Jan. With more responsibilities ahead to comply with the multitude of dynamic tax rates, best-in-class companies need to continue to leverage automated tax solutions to stay competitive. Dedicating staff time to work with government auditors and/or correct tax mistakes creates additional operating costs funds that could otherwise be invested in more productive activities.
The report is available here.
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