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Reduce non-taxed transaction audit risk, increase staff productivity and improve the exempt customer purchase experience
Introduction
Quick Fact
Paper exemption certificate management methods cost a typical large business $350k/ year in sales tax assessments alone. Primary Reason: missing certificates
The white paper, Automating the Exemption Certificate Lifecycle, described the three main software componentsexemption certificate management (ECM), tax decision and enterprise resource planning (ERP) or billing softwarein the exemption certificate lifecycle and the benefits of automating, such as reduced nontaxed transaction audit risk, increased staff productivity and improved exempt customer purchase experience. This white paper details how your company can utilize Avalara CertcCapture as the ECM component and how it is critical to successful automation of the exemption certificate lifecycle. Besides the powerful features CertCapture provides to collect and manage exemption certificates in an automated exemption certificate lifecycle, this white paper also illustrates how the automated exemption certificate lifecycle can be included with CertCapture out-of-the-box using already built connectors. This means your IT department is not needed to integrate the three software components of the exemption certificate lifecycle. However, in cases where prebuilt connectors are not available, this white paper also illustrates how the three components can still be integrated using CertCapture Integration Services with the help of your IT department.
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ERP/Billing Software
Sales and Invoice origination
ECM Software
Figure 1
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Cu st om er re co rd s
te ca ifi rt Ce ta da
The process begins with the customer and the ERP software because this is where sales and invoices originate. When customers are exempt from sales tax, statutorily the seller needs to collect an exemption certificate from them. However, often times customers do not know what documentation to provide and those taking the order do not have the certificate expertise to know which documentation they need. In addition, the certificate collection process itself can be time consuming because of the lack of knowledge on both sides or due to a lack of process on the sellers side. CertCapture solves these issues with intelligent automation. In the automated exemption certificate lifecycle, customer data is passed to CertCapture, where certificate requests are generated to customers. CertCapture will track the status of requests and help ensure customers provide only valid certificates for their transactions. CertCapture can also retrieve and provide copies of certificates to auditors. In addition, CertCapture serves as the source of truth for exemption certificates and will manage certificates, including tracking certificate expirations and certificates that have been deemed invalid by the tax department. The management of all certificate data plays a critical role in the tax decision software process. Certificate data is passed to the tax decision software where sales tax decisions are made for invoicing. At this step, the ERP software also interacts with the tax decision software because it needs to know what tax amount, if any, it needs to apply to invoices. If the tax decision software has accurate certificate data, then customers who are exempt from sales tax will be billed correctly. If not, then exempt customers will be billed incorrectly and the sellers audit exposure and risk increases.
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If your company uses tax decision software other than AvaTax, like Vertex, Sabrix or Taxware, you can easily use CertCapture to automate the exemption certificate lifecycle. By using CertCapture Integration Services, your company can automate the export of certificate data out of CertCapture into your tax decision software. CertCapture Integration Services accomplishes this through a simple web-based API (application programming interface) which can be accessed by developers using modern programming languages, or by computer administrators using simple tools that are as easy to use as FTP (file transfer protocol). In either case, IT departments can set this up easily.
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For tax and credit professionals and other departments that deal with exemption certificates, CertCapture supplies the tools necessary to increase productivity, improve the exempt customer purchase experience and reduce non-taxed transaction risk. Figure 2 lists ECM features rated important by tax professionals and how CertCapture matches up with these important requirements. The chief advantages provided by CertCapture over standard ECM software and document management software are described in the following sections.
Figure 2
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By initiating certificate requests through CertCapture, staff can utilize additional powerful functionality described below to help ensure valid certificates are collected quickly: Customizable Request Letter Templates. CertCapture allows you to customize the language and insert customer and certificate information you want in your certificate requests. Send Certificate Requests Directly from ERP. With the use of Avalaras connectors, certificate requests can be sent directly from the ERP with a click of a button without the need to be logged into CertCapture. Automated Retail and Ecommerce Certificate Collection. CertCapture is easily integrated with POS systems and online shopping carts to automate the look up and collection of certificates in these sales channels, while also improving the exempt customer purchase experience. Web and Rules-Based Certificate Creation Wizard. No other ECM software has a web and rules-based certificate creation wizard. The wizard asks customers a few simple questions to determine the correct form needed for their sales tax exemption. The wizard also ensures that every required field is completed before the certificate is submitted. These best practices ensure you collect valid certificates. Vast Library of Certificates. CertCapture contains certificates for nearly all sales tax exemption reasons. Avalara also has an ongoing review process that ensures new certificates and changes to existing certificates are quickly incorporated into the CertCapture library. Track Certificate Requests. Staff will know if a customer has started the process of submitting a certificate and if the system has received a completed certificate from the customer. Send Follow-Up Reminders. The system can send up to three reminders via email, fax or mail to customers who have not yet sent completed certificates. Electronic Signatures. CertCapture is the only ECM software that enables customers to create and sign applicable certificates online using their mouse. This reduces paper and fax costs and helps ensure that certificates do not get lost. The moment a customer signs a certificate electronically, the certificate is instantaneously captured in the system and is immediately available for tax department review. Bar Code Technology. Some requests and generated certificates are given a bar code that associates them with a specific customer record and form. If customers fax their completed certificates, the system will automatically index, image and associate the certificates with the customer records and forms to set the form expiration rules.
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The retail version of CertCapture allows store personnel to lookup and collect certificates quickly in the store or other places where business is conducted face-to-face with customers. The Retail edition can also be integrated in point-of-sale systems to automate the real-time lookup and collection of certificates in the store. CertCapture Retail edition includes all features and benefits described in this white paper. For more information, visit http://www.avalara.com/products/CertCapture/retail. Likewise, CertCapture can also be used in ecommercee transactions. This provides shopping carts the ability to automatically lookup and collect certificates in real-time without disrupting the online purchase process. For more information, visit http:// www.avalara.com/products/CertCapture/ecommercee.
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There are many ways that Avalara and CertCapture protects your data. 1. Avalara is SAS-70 compliant which means CertCapture has passed an independent audit of its processes for security and controls. 2. All transferred data is encrypted with SSL. 3. Data access requires proper authentication. 4. CertCapture enables defined roles which limits staff access to certain areas of CertCapture. 5. All data is stored with redundancy on main and backup servers in separate locations with 24/365 security.
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CertCapture is flexible and powerful enough to work in virtually any type of industry, business and business process that deals with exempt sales tax transactions. Companies across nearly all industries are using CertCapture today to lower their non-taxed transaction audit risk, increase staff productivity and improve the exempt customer purchase experience.
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Summary
There are three main software components for automating the exemption certificate lifecycle: ECM, tax decision and ERP/billing software. The automation of the exemption certificate lifecycle provides the following benefits: Increases the speed and automation of certificate collection. Improves the validity of certificates submitted by customers. Decreases non-taxed transaction billing errors since ERP and tax decision software will accurately know which customers are sales tax exempt. Reduces non-taxed audit risk. Auditors end up finding very little to assess against. Increases staff productivity by automating manual certificate processes. Improves the exempt customer purchase experience. Eliminates manual entry of certificate data into tax decision software and customer data into ECM software. CertCapture is intelligent ECM software, fully enabling all the benefits of an automated exemption certificate lifecycle. CertCapture delivers out-of-the-box integration with the use of pre-built connectors. This means IT departments are not needed to integrate the three software components. In cases where connectors are not pre-built, the exemption certificate lifecycle can still be automated with CertCapture using CertCapture Integration Services or the AvaTax SDK. Many businesses across nearly all industries have been using CertCapture successfully to reduce non-taxed transaction audit risk, increase staff productivity and improve the exempt customer purchase experience. CertCapture is the only intelligent ECM software flexible and powerful enough to automate the exemption certificate lifecycle for businesses of all sizes and across nearly all industries.
About Avalara Based on Bainbridge Island, Washington, Avalara is transforming the sales and use tax compliance process for businesses of all sizes. With point-and-click ease, Avalara provides the fastest, easiest, most accurate and affordable way for companies to address their sales and use tax compliance. Avalara is the industrys most trusted provider of solutions, serving more than 40,000 registered users located throughout the U.S., Canada and abroad, delivering more than 350 million sales tax transactions, and filing and remitting more than $10 billion in tax collections per year.
Getting started with Avalara is easy. Take the next step toward automating your sales tax process.
Call: 877-780-4848 Visit: www.avalara.com