Tax & Accounting Blog

Tax Automation – What Does This Mean?

Indirect Tax, Sales Tax Calculation May 29, 2009

You hear this phrase all the time now but what does it really mean?  With rapidly changing technology, people and companies are all about automating their various functions and that’s a good thing as long as you know what you are automating and how to automate it correctly and efficiently. 

Here at Sabrix, we work with companies of all sizes and in all industries to help them automate their sales tax process.  It is interesting when we talk to them because everyone has different ideas regarding what sales tax automation really is.  Some people think it is simply providing sales tax rates for them to bolt into their ERPs.  Others think it is the automation of the sales tax calculation process. 

Both of these answers are technically correct, however, they fall short in the 21st century definition of sales tax automation.  In the new millennium, tax automation goes beyond just tax rates or tax calculation, it adds another layer – service.  Service takes the concept of tax automation to the next level and really makes it complete.  Service is the human component of automation.  Sounds counter intuitive, but it’s true that all tax automation is driven by the human expertise. 

As a potential user of tax automation, you need to ensure that the tax expertise of the automated functionality is of the highest quality.  When seeking out a sales tax solution, you should be just as focused on the tax expertise of the people managing the content of the automation as well as the service.  You should ask questions regarding their level of experience with sales tax, their educational backgrounds, as well as their roles and responsibilities within the company.  The answers to these questions will go a long way in assisting you in determining which tax automation is the right one for your company.