Blog Tax News Sales Tax Preparation in House Versus Sales Tax Outsourcing

Sales Tax Preparation in House Versus Sales Tax Outsourcing

The economy is still recovering and these difficult times make it difficult for both tax authorities and tax payers alike. There are many of the sales taxing jurisdictions of the 46 states that are currently facing shortfalls in their revenue. While increasing taxes is an option, history has shown that most often the first course of action is to try to collect on existing taxes. This means that there is an increase in audit activity. Many tax professionals are under pressure to be able to do more by using less. One of the areas that may offer some relief for businesses is outsourcing sales tax preparation as well as tax returns. While outsourcing sales tax preparation and use tax is a fast growing area, many corporations are still not using this as a resource. The main reason may be because there are a lot of misconceptions when it comes to the value of outsourcing.
Myths about Outsourcing

There are several myths surrounding outsourcing sales and use tax. Many companies think that an outsource company will not perform as well as an in house staff. There is also a belief that it will be more expensive to outsource and that it will be difficult to justify retaining employees. In addition, it is believed that outsourcing will minimize the control of the process and that all outsourcers have the same basic services.

However, all of these myths can be debunked by finding a firm that has a service agreement that will work with your needs in your tax department.
Pros and Cons of Outsourcing

In the past there may have been some truth to the statement that an in house staff performs better than an outsourced staff. However, there are fewer people entering the tax field and many in house departments see a high turnover rate. Choosing a professional service to outsource your sales tax preparation to can be extremely beneficial as the people that work in these offices have more experience and will be able to ensure that all laws are being followed and that your taxes are in order should you be audited. The people that work in these firms are focused on taxes as their business and nothing else.

Of course the cost of outsourcing sales tax preparation must be considered. The answer to whether or not it is worth the cost will depend on the costs of the current in house system and how they are accounted for. It is easy to track direct costs such as interest/penalties and personal, but some of the indirect costs like accounts payable and funds management can be more difficult. Most often a company that has over twenty sales and use tax returns every month will benefit from outsourcing as it is just as cost effective as having it completed in house.

For businesses, outsourcing sales tax preparation can be beneficial for several reasons including that it will free up employees to focus on other business needs. Contact Sales Tax Accountants today for a FREE assessment of your tax needs and no obligation quote at 404-855-7000.

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Thanks to Sales Tax Accountants our company was able to avoid an expensive audit and save tens of thousands
James Turner - Retail Supply Services

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