Breaking through the spreadsheet ceiling: Why growing export businesses need better tax solutions

It's difficult to build a significant revenue stream with old-school tools.

Is your business starting to hit its straps in the export arena, with a steady flow of orders coming in from overseas customers? 

If the answer is yes, well done and long may that continue. Irrespective of the nature of your offering, developing an export revenue stream can be a smart way to grow sales and profits, and protect your enterprise from economic fluctuations here at home.

That's provided you're doing things by the book and not storing up trouble down the track because you haven't put automated systems and processes in place to handle the ongoing compliance requirements.

Starting small with spreadsheets

Of course, that's often what many fledgling exporters fail to do, in their haste to start selling and shipping. Typically, they may start out using spreadsheets to track and manage the mountain of documentation businesses are required to complete when they ship orders abroad. 

The complexity, however, scales up in a hurry.

Registering a business to trade in a single US state, for example, involves several hours of painstaking form completion. Decide to start selling to customers in all 50 US states and you're looking at several weeks' slog for the unfortunate individual assigned to the task.

Calculating the correct US taxes and charges is a rude shock for the unprepared too. The country boasts more than 13,000 sales and use tax jurisdictions, overseen by a bewildering array of local, state and federal bodies. Sellers are required to apply additional fees to certain orders delivered by vehicle in some states while other states impose additional fees on shipments over a certain value.

Also, consider the removal of the US$800 duty-free de minimis threshold, which means every shipped item needs an HS code, prepaid duties and transparent pricing before it even leaves Australia.  Indeed, incorrect HS codes can trigger custom delays, additional charges or goods being barred from entry

Throw in a string of different laws for remote sellers in some jurisdictions and you're looking at complexity with a capital C.

Start trading in the UK and the EU as well and there'll be a whole other set of rules to contend with: Value Added Tax rates that can vary across the continent and a recently imposed eCommerce handling fee that must be applied to all EU orders.

Making a mess of things in manual mode

Attempting to deal with all that complexity in manual mode can put your finance team under extraordinary pressure, particularly if they're having to learn as they go. There's a high risk they'll make errors as order volume increases and they start to get seriously snowed.

Rectifying mistakes can be time-consuming and expensive and a distraction from the main game – growing your footprint and sales internationally.

You also run the risk of devaluing your brand in new customers' eyes if, for example, their purchases are held up in Customs, or they're asked to pay extra upon delivery, because you failed to impose the correct fees when accepting their orders. 

Eliminating errors and admin hours with tax automation technology

You'll do your business and your team a favour by saying sayonara to the spreadsheets and old school systems and deploying time saving tax infrastructure that allows you to get things right the first time, every time.

That's where automated tax compliance technology has a vital role to play. It's designed to support export businesses as they scale by simplifying and streamlining all the tasks associated with tax compliance. These include registration, licensing, calculation, document management, reporting and e-invoicing.

Once it's up and running in the cloud and integrated with your ERP or other order creation software, you'll be able to apply the current taxes and charges for the US, the UK, the EU and a host of other destinations, correctly and in real time, on all your shipments. You'll also be able to automatically assign correct HS codes across entire product ranges without trouble. And you'll be able to reclaim the hours your team spends struggling with spreadsheets. Instead, they'll be able to spend their time on higher value activities that contribute to profitability and growth.

Quantifying the benefits

Exporters that have made the switch are reaping the returns. Deploying an automated tax compliance platform means businesses can eliminate an average of 510 hours spent on preparing and filing tax returns and 416 hours of work completing exemption certificates each year, according to a Forrester Consulting study.

And, with the right technology in place, they can stay laser focused on what matters most: building credibility and customer loyalty, without worrying about their shipments coming a cropper with Customs authorities half a world away.

Instead, they're able to tackle new markets with confidence, secure in the knowledge they have every aspect of export tax compliance covered off.

Scrapping old school tools that stop your business scaling

Selling overseas can be a smart way to grow but businesses that try to manage everything manually may struggle to gain critical mass and meet their compliance obligations. Swapping spreadsheets and other legacy solutions for automated tax compliance technology will help you scale successfully. If you're serious about doing so, it's an essential investment that will pay for itself many times over.