Why a Manufacturer Needs a Sales and Use Tax Consultant
Sales and use tax for manufacturers is a complex beast. It quietly feeds on underpayments until the auditor rattles the cage and this beast gobbles up your company’s time and money. Overpayments get trapped in the corners and go unnoticed.
Sounds like a horror story, but you can be the knight in shining armor by building a team to tame this sales tax beast. Calling in reinforcements from a qualified sales tax partner is often the best strategy.
Benefits of Sales Tax Partners
Recruiting help from a sales tax consulting firm offers three key benefits:
1) Provides a review of your sales and use tax processes to identify red flags and costly mistakes
2) Gives staff the tools to correct these mistakes and avoid them in the future.
3) Offers ongoing access to a team of sales tax professionals for guidance and recommendations.
Finding the Right Fit
Sales and use tax consulting can be found from a variety of sources, including accounting firms, independent consultants, software provider partners and sales tax consulting firms. Here are three qualifications that make up a successful partnership:
1) Sales and use tax expertise
Make sure the people who will work directly with you are trained (and certified) in sales and use tax. Confirm that they devote the majority of their time to sales and use tax.
2) Manufacturing industry experience
How many manufacturers have the consultants worked with on sales and use tax projects? The Cherry Bekaert Sales Tax Team specializes in working with manufacturers.
3) State tax law familiarity
Has the partner worked directly with the revenue departments in your states? Are they familiar with the current sales tax laws and regulations?
What if I Use Sales Tax Software?
Using a software program to process your sales tax compliance can be a great weapon, if it is set up and maintained properly. A qualified sales tax consulting firm can help correctly map your products and services to the software’s tax categories. Plus, they should set up tax calculation processes which can be easily followed by you and your staff.
Is Your Accounting Firm the Best Partner?
Don’t assume that your accounting firm is qualified to address sales and use tax issues. Ask the right questions.
1) What training or certifications have been completed by the sales tax team?
2) What percentage of their time is spent on sales and use tax projects?
Taming the sales and use tax beast at your manufacturing facility does not have to be a battle. Team up with the right sales and use tax partners to eliminate your risks and turn the beast into one of your best assets.
For an example of how the sales tax experts at Cherry Bekaert partnered with one multi-state manufacturer and saved them more than $500,000 in three years, check out this case study.