Embedding Tax Management and Compliance into Financial Processes
Compliance has grown increasingly complex over the years, and there is no indication that this trend will slow in the coming years. Therefore, it is crucial that retailers consider all regulations to remain compliant with laws, standards and ethical practices. Retail leaders must consider the intricacies that come with compliance and how they impact plans to expand, widen their omnichannel presence, participate in new markets, and engage customers in new ways. Brands must consider three areas when assessing their compliance posture and reporting capabilities.
“Maintaining tax compliance, consistent calculations, and accurate reporting in an omnichannel environment is nearly impossible using legacy technologies or manual reconciliation processes. Retailers simply cannot scale those outdated workflows as their customer base expands and new selling channels emerge,” said Peter Olanday, Director of Retail Consulting at Vertex Inc.
Data privacy requirements have also become more nuanced, with each jurisdiction enacting their own legislation, along with areas demanding unique measures and reporting functionality. Meeting a mandate in one specific place, whether individual, at a national level, or across an economic region, does not necessarily mean meeting a mandate in another. Retailers who are seeking to enter new markets or widen their presence in existing markets must know how their growth plans will alter data privacy requirements.
It is also important to take accounting and financial situations into account. Regulatory guidance for financial compliance continues to evolve, and brands must understand which rules apply to them, as well as which rules are most likely to apply in the future based on their transformation strategy. Businesses also may need to consider adopting Generally Accepted Accounting Principles (GAAP) standards, International Financial Reporting Standards (IFRS) or both. Committing to developing the internal capabilities required to meet reporting and compliance obligations early in the process is a must.
Tax calculation and collection are anything but straightforward. Many municipalities were met with a decrease in tax monies as a result of the pandemic, and thus launched new tax structures or expanded and increased existing structures to help offset losses and capture new revenue streams. Maintaining awareness around evolving jurisdictional requirements and tax laws is both a time-sensitive and intricate undertaking. Retail executives can help meet an organization’s obligations by developing a relationship with an experienced partner who can deliver powerful tax management technologies that can help them remain compliant.
The retail landscape is experiencing rapid transformation. By properly integrating tax determination and compliance into their financial processes with the right technologies and trusted partners, retailers can grow forward into a bright future.
About the Author
Marc Duclos is Global Partner Manager Oracle | NetSuite for Vertex Inc, a leading provider of indirect tax software and solutions. The company’s mission is to deliver the most trusted tax technology to enable global businesses to transact, comply and grow with confidence. Working together, Vertex and NetSuite provide solutions that help empower retailers to better manage and support their businesses. As the leader in tax technology for more than 40 years, the team of experts at Vertex is equipped to help retailers keep pace and remain compliant with quickly evolving changes in global, regional, and local tax and regulatory requirements.