5 Retail Tips for Tackling Tax Issues and Improving Bottom Lines
4. Manage tax to reduce cash reserves. Retailers can reduce the money they need for underpayment through accurate (i.e., automated) tax collection at the point of sale. With an automated tax technology solution, the need for cash reserves to cover audit risk and exposure is greatly reduced. The capital typically earmarked for the reserve then can be put to work for the business.
5. Lower your audit risk. Sales tax errors open the door to potential tax compliance issues, resulting in an array of out-of-pocket expenses. Audit preparation can be extremely resource-intensive, and assessments including interest and penalties can be costly. Accurate sales tax calculation and documentation can greatly reduce the preaudit information gathering process and, in turn, reduce the odds of an assessment.
While there’s no way to reduce the frequency and volume of tax changes, retailers can increase compliance and, in turn, reduce any tax-related negative impact on their bottom lines by implementing an automated tax technology system.