Another Sales Tax Technology Failure

It seems lately, I hear from more companies that have implemented sales tax technology solutions that have failed to meet expectations. I’m sure there have always been examples of sales tax technology solutions falling short of the desired outcomes – not unlike other technology solutions including ERP systems and supply chain systems that have not met expectations. Getting a technology solution to operate optimally is challenging. I believe technology works best when you have a well-defined process that you can make more efficient. What I’ve seen lately is an attempt to apply sales tax technology solutions to a workflow that is not well-defined. Automating a mess creates a bigger mess.

I believe the psychology of the taxpayer is that they know sales tax is complicated. But they so desperately want it to be easy.

When a sales tax technology vendor approaches them with an “easy” solution, they like what they hear. They want it to be easy – someone tells them it’s easy and they jump. Once they get into the implementation process and sometimes well after the implementation process, then their worst fears are realized – that sales tax is complicated and it’s not easy.

You may think I’m a technology basher but I’m not. I’ve always worked in the technology field – either in the software industry or in a technology-enabled service business. At TaxConnex, of course we use technology tools.

But we know sales tax is complicated and it cannot be fully automated.

We focus on providing service. Whether that be through our sales tax outsourcing practice or our consulting practice where we assist with sales tax nexus reviews, audits, VDA’s, and taxability reviews. Service is key – understanding clients’ issues, developing solutions, following through on our commitments, being responsive to questions and requests – all are critical. Technology is ancillary and is used to help deliver great service.

Above all else, TaxConnex is a service firm – not a technology firm. You would not ask me to build you software. Nor should you go to a technology company for service. They really are two different things.