Sales Tax in the Cloud

Will reviews four business cases where cloud software outshines on-premise solutions when it comes to sales tax management.


Hi. Welcome to Will's Whiteboard. I'm Will. By now, you've probably heard of Cloud computing and the fact that it can bring scalability, flexibility, and cost savings to many business processes. Well, what about sales tax compliance? Today, we are going to talk about four scenarios where Cloud computing can be superior to an on-premise solution. Here we go.

First scenario: You undergo a merger or an acquisition, and you inherit a new ERP system. Maybe it even has its own sales tax decision engine. Now, you're managing multiple licenses, fees, and consulting groups if you have an on-premise sales tax solution.

Scenario #2: Your business starts doing E-commerce. Now, you have an online shopping cart that you have to get integrated with your sales tax system. This takes time, money, and consulting, as well.

Scenario #3: Forced upgrade. Your on-premise sales tax solution comes out with a new software version, they no longer support yours, and you have to upgrade to the next one. This means integration fees, bringing people on premise to get you the new version, dealing with this all over again.

Scenario #4: This is something that is ongoing. A big part of compliance is updating your sales tax rules and regulations. With an on-premise solution, you often get CDs that you have to then take and get the content off of and put it in your software so you stay up-to-date. This is a manual process, and it takes time.

So what about sales tax in the Cloud? Now, when it comes to updating the Cloud, it is actually a lot simpler. You don't need CDs. Rules and rates are automatically updated in the Cloud solution. If there is ever a new version, that is also automatically updated. So it is far less costly and takes less time.

What about new systems? If you start doing E-commerce, your E-commerce shopping cart can connect directly to your Cloud solution, as can your ERP system. Oh, by the way, if you are managing multiple ERP systems, those other systems also can integrate directly with your Cloud solution. These integrations often take far less time and cost far less than they would with an on-premise solution.

So now, you have your sales tax data in one place, which makes for very easy reporting. With a Cloud-based solution, like Avalara's AvaTax, you can gain efficiencies, gain flexibility and scalability, and save money when it comes to sales tax compliance. I hope this helps explain sales tax in the Cloud. Thanks very much. I will see you next time.