Tax & Accounting Blog

7 Things to Consider When Evaluating Transaction Tax Software

Blog, Indirect Tax, ONESOURCE, ONESOURCE Indirect Tax October 17, 2017

When you are selecting transaction tax software for your company, you are setting the course of your transaction tax process for years to come – choose wisely!

Here are 7 criteria to consider at this important juncture:

  1. Will it cover all of my transactions? Some tax solutions may be limited as to what transactions they can actually determine tax for. Some are sales centric and struggle with properly determining tax on purchases. Some may only handle U.S. transactions. Others may not cover a specialized tax area such as Food & Beverage taxes of Fuels Excise Taxes. Be sure the proper tax content and calculation logic are in place to handle all of your transactions.
  2. Does it easily connect to our Business Systems? Great tax content, without an ability to apply it to your transactions, won’t get you very far. Ensure the tax solution you select can connect to your transaction systems – and that it will have the flexibility to adjust to new transaction systems that may be put in place further down the road.
  3. Is it Simple to set up tax policies specific to how we do business? Great tax content is great. But you also need to ensure you have great tools to define any specific tax policy you want to follow. Look for tools that don’t require the assistance of IT to use. And look for an ability to view such policies in a clearly defined, summarized fashion.
  4. Is the solution highly regarded by the Big 4 and other tax firms? Look to see what solutions the Big 4 use to manage their taxes – they are after all experts in the field. Ask the tax consultants you engage with what their experience is with the different tax solutions on the market.
  5. Where in the process do I need to determine tax? Looking across your Requisition to Payment and Order to Cash lifecycles, there may be multiple points where require an estimate of tax or an audited tax determination. Identify where a tax estimate may be helpful to you, such as at a point of Purchase Order, or at Shopping Cart in an e-commerce sale. And identify where you must have tax determined, such as a point of inventory removal. Then confirm your tax solution will deliver tax at these points.
  6. How can it be deployed? You may need factor in that your IT team is pushing to have more solutions on the cloud – or that it requires solutions to all be within your firewalls. Look for a solution that offers a variety of deployment methods so you aren’t stuck pursuing a solution that in the end won’t fit in with the IT team’s objectives.
  7. What do I think of the tax solution’s team? You aren’t just buying a tax solution that will be utilized for many years to come, you are also starting a relationship with the vendor’s personnel. Ask yourself how responsive the vendor has been to your needs and requirements? What do other companies feel about their customer support and implementation teams? Can you envision the vendor as a partner of yours that knows how important it is to have a successful tax automation process put in place?

It’s a big big decision. Take the time to carefully consider all the criteria above. A robust tax solution can greatly improve the accuracy and efficiency of your transaction tax process. But not finding the right fit for you and your organization can lead to a rocky road. Carefully choose a path that will lead to the tax process and results you desire to get to.

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