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Automating the Exemption Certificate Lifecycle

Automating the Exemption Certificate Lifecycle

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Published by avalara
Reduce non-taxed transaction audit risk, increase staff productivity and improve the exempt customer purchase experience
Reduce non-taxed transaction audit risk, increase staff productivity and improve the exempt customer purchase experience

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Categories:Types, Business/Law
Published by: avalara on Nov 03, 2011
Copyright:Attribution Non-commercial

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10/01/2013

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AUTOMATINGTHE EXEMPTIONCERTIFICATE LIFECYCLE
Reduce non-taxed transaction audit risk, increase staf productiv-ity and improve the exempt customer purchase experience
 
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Prudent and proactive businesses are constantly investigating and implementing newmethods to reduce their sales and use tax audit liability and increase sta productivitysince these savings go directly to the bottom line. In today’s economic environment,these goals have taken on added urgency. With virtually all states experiencing sig-nifcant revenue drops and higher demands or state services due to the slow economy,states are being very aggressive in their sales and use tax audits to help increase theirrevenues. Astute businesses have already, or are in the process o making moves toreduce their own sales and use tax liability risks to lessen the pain and dollar amounto an assessment.The slow economy has shrunk top line growth or many companies causing them tolook to cost cutting to maintain or slow decreases in the bottom line. Once again, pro-active managers realize the importance o providing the tools their businesses need tobe more productive and to adopt sales and use tax best practices that urther reducecosts and audit liability.Businesses that are best prepared to handle this type o environment have implement-ed Exemption Certifcate Management (ECM) sotware to automate the collection andmanagement o certifcates and have integrated this sotware with their EnterpriseResource Planning (ERP)/billing and tax decision sotware to complete and automatethe “Exemption Certifcate Liecycle.”Automating this process is not only critical or manuacturers, wholesalers and retail-ers, but also or businesses in any industry with sales tax exempt transactions, no mat-ter the sales channel. The most powerul ECM solutions can handle the collection andmanagement o certifcates in direct, retail, e-commerce, POS and tele-sales channelssimultaneously and in real time.By connecting these systems, each is able to share critical data needed to reduce non-taxed transaction audit risk, increase productivity by automating manual certifcateprocesses and improve the exempt customer purchase experience.
“...in this world nothing is certain but deathand taxes.”Benjamin Franklin
Introduction
 
Automating the Exemption Certifcate Liestyle
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Understanding theExemption Certifcate Liecycle
The Exemption Certifcate Liecycle is the recurring processexemption certifcates go through rom their creation, to theirongoing use in uture transactions and audits, to their renewalwhen they expire or are classifed as invalid.
Figure 1
ECMSotware
Customer and transaction dataTax decisions (rules and rates)
  C  u  s   t  o  m  e  r   r  e  c  o  r  d  s
C   e  r  t  i   f   c  a  t  e   d   a  t  a  
ERP/BillingSotwareTax DecisionSotware
Sales and Invoiceorigination
There are three primary components o the Exemption Certifcate Liecycle (Figure 1):ECM sotware, ERP or billing sotware and tax decision sotware. All three are criticalor minimizing non-taxed transaction audit exposure, increasing sta productivity andimproving the exempt customer purchase experience.The Exemption Certifcate Liecycle consists o three primary steps initiated by a salesor invoice origination and certifcate request, but thereater, the cycle really never stops.

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