Thursday, June 1, 2023

Simplifying Taxation for Enterprises

By Vishal Muktewar - February 02, 2021 6 Mins Read


“By automating tax, CFOs can free up personnel resources for more pressing operations, spend less time managing a function that provides no value to the bottom line, and mitigate the risk of audit costs through increased accuracy,” says Liz Armbruester, SVP of Global Compliance, Avalara in an exclusive interview with EnterpriseTalk.

ET Bureau: Could you share any unique challenges faced by accounting departments of enterprises? How has technology helped?

Liz Armbruester: The accounting departments of large enterprises are currently facing two unique challenges — larger tax burdens and the shift to omnichannel.

At large enterprises, the depth and breadth of product offerings, sales channels, locations, and customer base are very diverse. With so many offerings, channels, etc., enterprise businesses often find themselves in a complex and difficult to navigate tax environment.

An enterprise that sells to customers across the U.S. must manage economic nexus laws and ensure the right sales tax is charged based on where the customer lives. Because tax rates and rules vary by jurisdiction, the tax complexity created by the economic nexus alone is enough to create a significant burden for even the most sophisticated business.

Another unique burden is the shift to an omnichannel environment in today’s digital-first society. While businesses of all sizes are shifting to an omnichannel sales approach, digital transformation often happens faster at the enterprise level because they have the resources necessary to implement change. This shift is requiring enterprises to be thoughtful in their approach to limit the organizational and process disruptions that can occur while managing changes of this size and scale.

To address these challenges, technology is essential. Given the resources that enterprise businesses have at their disposal, they have a unique opportunity to reach more customers around the world through ecommerce.

Tax automation technology is enabling enterprises with even the most complex tax obligations to streamline their compliance processes without compromising accuracy. Other fintech solutions are essential for enterprises looking to capitalize on the shift to omnichannel. From enterprise resource planning (ERP) and order management systems (OMS) to payments and fulfillment technology, enterprises require a set of integrated solutions to operate and succeed in this digital age of commerce.

Read More: The CXO Today: Change Agent or Change Manager for Business and Digital Transformation?

ET Bureau: What are the effective ways for enterprises to integrate, scale and simplify their taxation solutions in their accounting lifecycle without disrupting the usual flow?

Liz Armbruester: Enterprise businesses often have complex technology infrastructures that cannot be ripped and replaced easily or without disruption, so being able to improve processes without reinventing the wheel is incredibly important.

Enterprises integrate and scale tax solutions without disruptions by working with tax technology providers to leverage a partner model.

ET Bureau: What steps can CFOs take to accelerate the revenue generation and simplifying taxes while also complying with the regulatory requirements?

Liz Armbruester: Tax compliance is a finance function that is prime for efficiency. To cut costs and improve efficiency, CFOs should identify what processes can be automated across the customer and business lifecycle. By automating tax, CFOs can free up personnel resources for more pressing operations, spend less time managing a function that provides no value to the bottom line, and mitigate the risk of audit costs through increased accuracy.

Other key areas that benefit from automation include the buying journey, collaboration tools, operational backend processing, and data management and insights. Like tax compliance, many of the functions that power the checkout or invoice step in the customer lifecycle can benefit from automation. Payment processing, shipping costs, and fulfillment services can all be streamlined using technology integrations to make the customer experience seamless while also saving money and increasing efficiency on the backend.

ET Bureau: What trends do you see in tools that ease the process of tax compliance for enterprises? What digital technologies play a role there?

Liz Armbruester: Automation is key to ease the process of tax compliance for enterprise businesses. Tax compliance requires a seamless and accurate exchange of data between businesses and government authorities. By automating that process, enterprises can easily get their tax information to the right authorities on time while also improving the accuracy of the information.

It’s important to note that automating the tax compliance process isn’t easy. In order for an enterprise to automate tax compliance, they must first make sure their tax nexus (obligation to pay sales tax) is right and that their product catalog is mapped to the correct tax codes. This is where artificial intelligence (AI) technologies come into play.

Read More: OCM – Organizational Change Management- Acing the Inevitable

Accounting teams can leverage automation technologies that use AI to understand where they have an obligation to pay tax and learn which products align with which tax codes. As AI application in tax continues to evolve, the technology will play a critical role in streamlining tax compliance and consistently delivering accurate tax code determinations regardless of how complex an enterprise business’s catalog gets.

Another service that enterprise businesses could benefit from when it comes to tax compliance is tax content subscription services. Given the depth and breadth of products, channels, locations, and more mentioned previously, many enterprise businesses have robust tax compliance operations to manage the complexity

Large enterprises can leverage tax subscription services to regularly update their systems to keep their tax determinations in line with changing rules and regulations. The services are powered by teams of tax experts and AI applications to regularly update the rules across jurisdictions so that businesses can ensure their transactions align with the most up-to-date tax rules.

At the end of the day, governments around the world are working toward real-time tax collection to reduce fraud, streamline collections, and other reasons. As tax remittance gets closer to the point of purchase, the demand for automation on the business and government side will significantly increase. While this may not be a reality for years to come, enterprise leaders can expect to see the demand for automation increase in the lead up to this shift to real-time tax compliance.

[vc_tta_tour][vc_tta_section title=”Liz Armbruester” tab_id=”1602598322051-0408cb00-0e1c”]

Liz oversees global compliance operations at Avalara. With more than 20 years of leadership experience from a variety of technology sectors including software, media, and services, Liz is known for her strong track record of innovative problem solving, process optimization, and the ability to deliver automation for efficiency and scale. Her commitment to operational excellence and aptitude for partnering cross-functionally helped her drive value in prior roles with Vubiquity, a provider of content monetization technology, and Zilog, a computing microcontroller manufacturer.



Vishal Muktewar

Vishal Muktewar is a Senior Correspondent at On Dot Media. He reports news that focuses on the latest trends and innovations happening in the B2B industry. An IT engineer by profession, Vishal has worked at Insights Success before joining Ondot. His love for stories has driven him to take up a career in enterprise journalism. He effectively uses his knowledge of technology and flair for writing, for crafting features, articles and interactions for technology enterprise media platforms.

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