I’m not sure when a sales tax return turned into a widget. It seems that in the almost 17 years I’ve been in the sales tax compliance outsourcing business, sales tax returns have been treated like a commodity with contracts awarded all too often to the lowest cost provider. My income tax brethren may feel the same way about the commoditizing of income tax returns.
I was reminded of this fact recently when a long standing customer asked me to reduce our fees in order to keep their business.
Granted this is a client that we’ve successfully served for seven years who was outsourced to a low cost competitor prior to switching to TaxConnex seven years ago. The low cost competitor missed various filings, overpaid some jurisdictions, failed to take credits where applicable, and overall provided a poor level of service. However, the current decision makers were not at this business seven years ago and did not feel the pain of poor service.
They see a sales tax return and believe it’s a commodity and the lowest cost provider should get the work.
Commodity buyers gravitate to return prep providers. Return prep providers do just that and only that – and sometimes they fail at that task. Decision making is pushed back to the customer, risk is pushed back to the customer, flexibility is not allowed, and be ready for frequent turnover with the primary point of contact.
Contrarily, I believe that sales tax returns are not commodities. I believe there’s a level of skill involved in preparing the returns. I believe a reliable, consistent, and available point of contact is important. I believe answering questions thoroughly and timely means something. I believe providing sales tax guidance and expertise as part of the compliance service is important.