If an auditor comes to your door, and you tell him/her that you don’t charge sales tax, odds are that will not be the end of the conversation. Missing or incorrect exemption/reseller certificates are a major source of audit risk. In fact, the riskiest, and hardest part of the entire transactional tax compliance process is the collection, maintenance and management of exemption certificates. Learn how to reduce this risk in Sage ERP.
Businesses who deal in exemption certificates are much more attractive to an auditor because the dollar amount of negative findings is usually much higher in the audit of a non-taxable transaction than a taxable transaction that was charged at the wrong rate. The burden of proof is on you to show exempt status for historical transactions. One missing or incorrect certificate can lead to fines and penalties and encourage the auditor to keep digging in hopes of finding more.
e2b teknologies, in partnership with Avalara, can help you protect your business from an expensive, time consuming audit by automating the exemption certificate lifecycle. With Avalara CertCapture for Sage ERP, you’ll be assured that exempt transactions will only be processed if valid certificates (that can later be quickly retrieved in case of an audit) are on file.
Automation using intelligent exemption certificate software enables you to:
- Increase speed and ease of certificate collection.
- Improve validity of certificates submitted by customers.
- Decrease billing errors for non-taxed transactions due to ERP and tax decision software having accurate information of which customers are sales tax-exempt.
- Reduce non-taxed audit risk. Auditors end up finding very little to assess against.
- Raise staff productivity by automating manual certificate processes.
- Improve exempt customer purchase experience.
- Eliminate manual entry of certificate data into the tax decision software and the customer data into CertCapture.
To learn more about how you can ensure compliance, manage your database, and be prepared in the case of an audit, read the free whitepaper “Automating Exemption Certificate Management.”
Guest post by Avalara