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Excise tax compliance is a complicated and time consuming, but essential, process. Any confusion about requirements can lead to mistakes resulting in fines, the inability to complete a drawback, or mistakes that eat into profit margins. These processes require an organization to determine, calculate, manage exemptions, and file and report. Typically, these processes fall outside of internal expertise due to changing mandates and are not supported by the systems typically used to run the business. In order to execute these processes effectively and within compliance, your organization must put a plan of action into place. Consider the following steps to success:

  1. Identify solutions that can adequately handle tax compliance. While 73% of survey respondents indicated they utilize ERP for managing excise tax compliance, these same survey-takers reported a series of challenges that this approach brings. These include an inability to update, a lack of usability, and limited functionality. Rather, your organization should identify a solution that can provide the automation and reporting that facilitates these difficult processes.
  2. Identify and integrate regulatory change. The top challenge facing organizations today when they manage excise is the frequency with which regulations change. It’s impossible for employees managing these processes, particularly those that operate in multiple jurisdictions, to stay on top of these changes. Internal research is inefficient; these organizations must find a knowledgeable source to provide this information.
  3. Determine and calculate accurately. Building on the previous recommendation, relying on a solution to determine and calculate accurately is the key to ensuring that mistakes are not made and that the process is completed quickly. Employees can then move on to other tasks.
  4. Provide visibility to decision-makers. When performing excise tax-related tasks within ERP, much of the process may not be captured. Some of the process may take place on spreadsheets or on paper. This makes it difficult for decision-makers to understand the impact of excise. They may be making decisions that do not reflect true profit margins. Business leaders that understand this will understand why an excise engine is essential.
  5. Produce compliant reports. This is the final part of the process. Audit preparedness is a major benefit of an excise engine. Utilizing these solutions can minimize the impact of audits and ensure that fines are avoided.

With a dedicated excise tax engine, your organization can ensure compliance and improve profit margins. For more information, read the full report, “Reduce Work and Ensure Compliance with an Excise Tax Engine.”

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