In the midst of this growth, R&B Wagner's accounting manager, CPA Dave Chermak, is the company's only full-time employee managing sales tax. Although he consults with outside accountants, Dave is the one responsible for tax compliance. He needs to accurately charge the right sales tax no matter where a sale occurs, manage exemption certificates, file returns across the country on various filing schedules, and stay on top of the company's growing nexus obligations.
The expansion of R&B Wagner's customer base means Dave must deal with an increasingly complex sales tax situation. As the company grows, so does the number of exemption certificates across channels; currently, there are approximately 11,000 in the company's system. A good portion of the company's sales are online, and those sales create challenges when exemptions are involved. These sales needed to be streamlined for both the company and its customers. Expansion has also resulted in new nexus obligations. Moving into a new location can create nexus in multiple jurisdictions, such as the city and the state. Each of these must be managed individually, including registration and filing monthly or quarterly returns.
When Dave joined R&B Wagner, he was able to turn returns filing over to Avalara Returns. Avalara Returns automatically files R&B Wagner's returns in every tax jurisdiction where it owes sales tax. R&B Wagner makes one payment to a secured account to cover the total amount of taxes owed, and Avalara takes care of making individual payments.
Dave also worked with their Avalara account manager to set up CertCapture on online sales forms so customers could load their own exemption certificates. "In the past we would have to call the customer, have them send the form to us and then we put it in CertCapture. Giving customers the ability to load it themselves has been wonderful," Dave said. "The new process is up to 40 percent more efficient than the old one."
Most importantly, R&B Wagner also uses Avalara's nexus monitoring service to help reduce risk by monitoring the company's nexus obligations. When a sale occurs in a jurisdiction that is not registered to collect and file sales tax, the transaction is flagged and Avalara alerts Dave. If registration in the new jurisdiction is required, Dave has the option to set it up himself or let Avalara take care of it. He called nexus risk mitigation "one of the top benefits" of partnering with Avalara.
If Dave didn't have Avalara's help, he would have to hire one or two more people to take on sales tax. Currently, he has a staff of three working in other areas, and he calls Avalara his "fourth employee." "Avalara is doing all the sales tax work essentially for me. All I have to do is collect the data and make sure it's been properly given to my fourth employee to handle and take care of."
To learn more, visit the Avalara Newsroom.
For the 2020 Distribution and Manufacturing Software Guide:
Visit our website to learn more about the Brown Smith Wallace Advisory Services at http://www.software4distributors.com and to use our Vertical Markets Matrix, visit http://www.software4distributors.com/compare/default.aspx.
Also, read our 2019 Mid-Year Supplements at http://www.software4distributors.com/downloads/2019_Mid_Year_Supplement_Blog.pdf?utm_source=DownloadPDF&utm_medium=Blog&utm_campaign=2019Supp.
Developed through a partnership with Industrial Supply, Contractor Supply Magazine and Brown Smith Wallace Advisory Services, these 12 page Supplement Guides provide valuable, independently researched information. Each Guide details software company information, identifies vertical markets, highlights functions and technology features, new developments to the software package, shows graphs of the user range, basic entry price point, sales channel (how and where the software is sold), along with company contact information. The Supplement Guides provide everything you need to know when beginning your software selection and evaluation process.
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