Risky Business: 5 Industries that Raise Audit Red Flags

Posted by Ashley Lemus on Wed, Mar 15, 2017 @ 11:22 AM

States target certain businesses for sales tax audits according to data

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For most companies, the mere idea of a sales tax audit is a daunting prospect, and probably the most common of strategies is a “fingers crossed we don’t get picked” approach. But for certain types of businesses, just doing what you do can be enough to attract the attention of the state auditor.

According to state departments of revenue data, certain industries are at a higher risk of being audited simply based on how sales and use tax regulations impact their business. The more complex the rules, the higher the odds that errors or oversights will happen. These mistakes can be costly – both for states that are missing out on tax revenues and the companies that fall short on compliance.

 

The audit process uncovered

Unless you’ve been through an audit before, you likely have no idea what to expect, never mind why the state is looking at you or why your business has been selected for an audit. Sometimes, companies are chosen at random. But more often, something you are doing (or not doing) in your business has raised the red flag for state auditors.

 

Sales and Use Tax Audits Uncovered, a new report by Avalara and Peisner and Johnson, aims to set the record straight on why some businesses get audited more than others and the behaviors driving these trends. Analysis compiled from real audit data from two of the four Big Four states, Texas and California, and findings from more than 64,000 audits conducted over a 27-year period went into the writing of the report. Some interesting patterns emerged from this data on the types of companies that tend to get audited, the reasons why they get audited, and what activities make them more vulnerable to an audit.

 

For example:

  • 60% of audits target only four industries
  • One-third of audits are now conducted out of state
  • The two most frequently identified audit errors are improperly managing exempt sales and out-of-state purchases

 

 Avalara avatax saves your business thousands in manual tax compliance costs

 

Lax tax practices are red flags

The study found that certain factors, such as audit history and having a high ratio of exempt sales to total sales, led to a higher risk of being audited. While these seem straightforward, other characteristics like industry type are less understood. What exactly is it that puts these businesses in the state auditors’ crosshairs when it comes to tax compliance?

 

For starters, certain tax practices can put any business at greater risk of audit. According to the California Board of Equalization, the top three most frequently seen problems are: 

  • Not charging tax on out-of-state sales
  • Recorded versus reported difference in taxes collected and remitted
  • Not properly documenting tax-exempt sales

 

Which industries are a target

According to audit data, the industries targeted most by auditors are Retail, Food Service, Manufacturing, Wholesale (/Distribution), and Construction. These were ranked in the top five in both California and Texas. It’s likely that these industries attract attention based on the types of compliance errors auditors uncover when auditing these businesses. For example, sales tax nexus was a common hurdle shared among all five of these industries. Not surprising, given that states have vastly changed the definition and thresholds for nexus beyond the physical presence standards.

 

Beyond nexus, audit triggers were more specific to the tax complexities experienced by each industry. For example, product taxability can be especially burdensome for retailers, wholesalers, and food services, especially given how differently states tax different products and services. Use tax and exempt sales tends to trip up manufacturers and construction companies. And drop shipping can complicate compliance for distribution companies. These and other audit triggers are covered in more depth in the report, along with audit profiles and outcomes for each of the high-risk industries.

 

The report also reveals that states are getting more serious about sales tax audits — especially in recouping lost revenues from ecommerce sales — hiring more auditors and focusing greater efforts on audits conducted out of state. What exactly does being caught in non-compliance cost nowadays? According to Wakefield Research, small to mid-size businesses are out approximately $114,000 in taxes, fees and penalties if auditors find problems. It can be nearly four times that amount for larger firms. 

 

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Reduce risk with sales tax automation

While you may not be able to head off a sales tax audit forever, you can make the process far less painful by managing tax compliance more efficiently. This starts with having a clear understanding of your tax obligations and a reliable way to ensure you can comply with them — now and should they change. Tax automation software like Avalara can provide this assurance.

 

Get your free copy of the Sales and Use Tax Audits Uncovered report to learn more about audit triggers, how to avoid them, and how to protect your business against unnecessary tax compliance risk. 

 

We would love to speak with you about how Avalara and Klear Systems can benefit your organization.

Give us a call at (949) 681-8135,
email us at info@klearsystems.com
or complete the form below and we’ll reach out to you.

 

I Want to Learn More!

Tags: Manufacturing, Distribution, Avalara, Sales Tax

Sage Releases Multi-Bin Basic for Sage 100c

Posted by Ashley Lemus on Wed, Feb 22, 2017 @ 10:31 AM

In a recent release, Sage has announced an inclusion of the DSD/ScanForce Multi-Bin within Sage 100c.

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This addition of Multi-Bin functionality will change the way you manage inventory by providing detailed location information within your warehouse!  

 

This enhancement of your Sage 100c system will include:

  • Directed Picking
  • Pick and pack
  • Put Away
  • Instant Bin Updates
  • Real-Time Data
  • Dashboards

 

ScanForce is the industry-leading barcode scanning and mobile warehouse & sales automation solution for Sage 100 software.  Streamlining your warehouse operations allows for a reduction of errors and an increase in saved time.

 
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Interested in learning more about ScanForce or Sage 100c?
We would love to speak with you about how Klear Systems can benefit your organization.

Give us a call at (949) 681-8135,
email us at info@klearsystems.com
or complete the form below and we’ll reach out to you.

I Want to Learn More!

 

Tags: Manufacturing, Sage Software, Inventory Management, Warehouse Management System, ScanForce, Multi-Bin

Considering Moving Your Manufacturing Operations to the Cloud?

Posted by Ashley Lemus on Wed, Jun 22, 2016 @ 03:21 PM

Should I move manufacturing processes to cloud-based systems?

 There are many factors to consider when deciding whether to move your manufacturing operations to the cloud.  Here we've laid out a few to get you started:

 

There are many factors to consider when deciding whether to move your manufacturing operations to the cloud.  Here we've laid out a few to get you started:

 

While cloud-based systems offer a wide variety of potential operating efficiencies to the manufacturing sector, many manufacturing companies are reluctant to move operations entirely to the cloud.  But a traditional, on-prem solution coudl be outdated and unable to perform all the tasks necessary.  However, even a hybrid arrangement can seem unattractive since many organizations lack the appropriate infrastructure, as well as experience difficulty when trying to understand which operations can be cloud driven and managed.  

 

Today, many manufacturers are unaware of the various cloud-based systems and what they have to offer due to the drastic change the software has undergone over the past several years.  In order to remain an industry leader, research must be done on what can be gained from cloud-based solutions and each business owner must take their individual situation into account to make a decision on whether moving their processes to the cloud or not.  

 

However, when the decision to move to the cloud has been made, organizations are relieved to find that many new systems are capable of providing complete manufacturing capabilities that encompass the entire manufacturing process.  In the end it is extremely beneficial to not only research what cloud-based solutions are available to your business, but to also make the move to the cloud to ensure proper management of your small to medium-sized business -- and Klear Systems can help!



We would love to speak with you about how Klear Systems can benefit your organization.

Give us a call at (949) 681-8135,
email us at info@klearsystems.com
or complete the form below and we’ll reach out to you.

I Want to Learn More!

 

Tags: Cloud Business Management, Manufacturing, Small Business

Scanco Enterprise: Cloud Supply Chain Warehouse Management Software

Posted by Kimberly Tucker on Thu, Jun 11, 2015 @ 07:24 AM

Business leaders in all industries know an organization's success depends on having an intelligent warehouse. Without the proper Warehouse Management System (WMS), a mid-sized to large distribution center can suffer from inefficiencies and unrealized productivity. 

SCANCO ENTERPRISE is the most advanced product from Scanco. It will completely change the way the warehouse and the operations team function forever with a seamless ERP integration that only Scanco can offer and instant, real-time communication.

 


With instant communication, not only to the ERP but the team as well, the need to simplify, streamline and automate every aspect of inventory presents itself.  Additionally, Scanco Enterprise Apps are not just for Windows any more. The cloud-based, technologically advanced software of Scanco Enterprise erases all limitations and will run on IOS, Android and Windows.

Never again lose track of an order with a real-time dashboard designed specifically for the warehouse management team. Instantly see where orders are, stock levels and even notify the team directly to their device when a rush order arrives.

Scanco Enterprise Warehouse Management System Shipping Scanners

Get enterprise-level data anytime by generating reports on history or real time transactions. Instant messaging and group messaging allows the team to be in constant contact so orders can be assigned to users directly, connecting the team and making shipping more efficient than ever before. 

With Advanced Shipping from Scanco Enterprise, waves and directed picking will allow the warehouse team to pick multiple or single orders with one pick list and even guide the users on the shortest path through the warehouse.

Directed Shipping enables the team to skip picking altogether and invoice the customer while showing the best way to ship the orders.  Then, Advanced Shipping from Scanco Enterprise will have you shipping orders cheaper, faster and more accurate than you ever thought possible. 


Scanco Enterprise includes everything essential in Scanco Warehouse Plus:

  • RMA
  • Inventory Adjustments
  • Advanced Shipping
  • Notifications
  • Warehouse Reporting
  • Bill of Materials
  • Auto Update
  • License Plating/Pallet Tracking with ACSG Multi-bin
  • Pack list Printing
  • Dashboard

 

Scanco Enterprise will turns warehouses into efficient, controlled, well managed machines.  It is an advanced solution designed specifically for advanced warehouse needs. By combining the best in automation technology, Scanco has designed a suite of functionality that can be put to the test.  

As new technologies and warehouse management solutions continue to pour into the market, it can become easy for a business to become complacent.  The idea of relearning a new system or changing the way a warehouse has always performed a certain task can be daunting but there a business can't just let the possibility of increased efficiency pass them by.

 

We would love to speak with you about how Klear Systems and Scanco can help benefit your organization.

 

For more information on Scanco Enterprise or
Supply Chain Warehouse Management Software

Give us a call at (949) 681-8135,
email us at info@klearsystems.com
or complete the form below and we’ll reach out to you.

 

I Want to Learn More!

Tags: Cloud Business Management, Manufacturing, Distribution, Sage Software, Mobile App, Warehouse Management System, Supply Chain Management

4 Cloud ERP Questions Manufacturers Should Ask

Posted by Kimberly Tucker on Tue, May 26, 2015 @ 11:35 AM

CloudThere are a number of players in the cloud game so consider the following questions when looking for the right cloud solution.

What is the Cloud?

As a professional, you’ve undoubtedly heard and read the buzz about cloud computing. "The cloud" is a term that gets thrown about frequently these days so let us start with a simple definition: The Cloud is a network of servers, some of which perform online services and some which allow storage of and access to data.

Technology companies with a heavy consumer focus are leading the charge in promoting cloud solutions and are battling vigorously for attention and dollars.

Manufacturers however have a different set of priorities than consumers who are primarily concerned with being able to access their music or photos at anytime from anywhere. Manufacturers have an even greater set of concerns that introduces regulatory compliance into the equation.

Highly regulated device manufacturers are focused on innovation, patient safety and operational efficiency but nothing is more important that complying with regulations. Consequently, the prospect of trusting the operation of your business to a cloud ERP solution requires much examiniation.

If you are considering making the move to the cloud, the secret to success is selecting a cloud ERP solution that is built for you; one that supports the unique security, regulatory and software validation requirements of your industry. 

Is The Cloud Secure?

Security can be a major source of anxiety when considering a cloud-based solution in the manufacturing. However, a cloud solution that is designed to meet the specific needs of a manufacturer can easily overcome these concerns. A cloud ERP provider needs to make security, privacy and high levels of information technology (IT) controls of paramount importance when designing a solution.

A viable cloud solution uses stringent infrastructure and operational security measures to protect the underlying network, servers and application, all while controlling access to sensitive corporate data.

Data centers must include state-of-the-art technical security measures, such as electronic or biometric access; up-to-date firewalls and malware protection; and physical security measures, such as perimeter fences and live monitoring. With these measures in place, information in a cloud solution optimized for the specific manufacturing industry you operate within is even more protected than in an on-premise server.

 

Is The Cloud Compliant?

A cloud-based ERP solution for a manufacturer must be offered in a regulatory compliant IT environment. It should be a robust, highly available solution with all the necessary standard operating procedures to meet the requirements of national regulatory authorities.

It is essential that the solution also supports computer software validation requirements. Many cloud offerings are based on multi-tenant cloud environments requiring frequent upgrades as the entire product is upgraded, often on a semiannual basis.

Deploying a cloud-based ERP solution as a dedicated, single instance provides a qualified IT infrastructure that will be the foundation for your software validation efforts. It will also insulate you from the constant cycle and expense of validation efforts resulting from upgrades, patches and functionality that have not been given a proper risk-based evaluation for their effects on your underlying business and quality processes.

 

Will My Business Benefit from the Cloud?

Many companies promote delivering cloud ERP solutions. Yet, few are solely focused on the needs global manufacturers. Cloud-based solutions that are delivered on a qualified infrastructure mitigate the variability often associated with on-premise deployments.

A cloud deployment delivers the financial benefit of moving from capital expenditures to operational expenditures, allowing device companies to be more capital efficient. They deliver predictable security, reliability, availability and expense to help minimize risk.

Cloud deployments are simpler and more rapidly deployed than typical on-premise solutions. Some, but not all, deliver the same globally-accessible, full-strength ERP and EQMS capabilities as their on-premise versions

 

Conclusion

When choosing a cloud-based ERP solution, manufacturers need to ask the right questions before making their selection - or let Klear Systems do a business process review for better insight. It is imperative that manufacturers select a Cloud ERP solution that is built exclusively for their industry and not the generic solution used for a bank, government agency or some other non-manufacturing entity.

They need to select the comprehensive solution that supports the unique security, regulatory and software validation requirements of the manufacturing industry.

Overall, manufacturers must select a solution that delivers predictable costs that are easy to budget and flexible. Only then can they feel confident making the move to the cloud.

 

For more information on Cloud ERP for Manufacturers, 
Please contact us today! 

I Want to Learn More!

 

Tags: Cloud Business Management, Manufacturing, Acumatica Cloud-Based Solutions, Enterprise Resource Planning, Warehouse Management System, Supply Chain Management

Sage 100 ERP for Manufacturers: 4 Fantastic Benefits

Posted by Kimberly Tucker on Thu, Oct 30, 2014 @ 12:52 PM

 

Manufacturing Sage 100 ERP Warehouse Automation Inventory ManagementA survey conducted by the Aberdeen Group revealed that 74% of Manufacturers use ERP software in day-to-day planning and operations.  If your business hasn't adopted a modern ERP solution like Sage 100 already, consider the following 4 big benefits manufacturers like you are already achieving.


Top 4 Benefits to Manufacturers

  1. Reduced Inventory Levels
    Manufacturers with modern ERP software like Sage 100 are able to lower inventory levels by 22% because companies can better coordinate manufacturing with customer service, logistics and delivery equating to lower inventory levels in reserve and more money for cash flow.

  2. Improve Internal Processes
    97% of manufacturers with modern ERP software like Sage 100 are able to meet manufacturing schedules because the software automatically notifies decision-makers when scheduled activities fail to occur on time. so they can address issues proactively. 

  3. Enhance The Customer Experience
    Modern ERP software like Sage 100 allows 98% of manufacturers to deliver complete, on-time shipments to their customers due to the software enabling cross-functional teams to continuously improve operations.

  4. Reduce Cost
    Manufacturing businesses with modern ERP software like Sage 100 reduce operating costs by 20% with their ability to streamline and accelerate processes to improve efficiency and productivity.  




    For more information on Sage 100 ERP,

    Please contact us today!

    I Want to Learn More!  

Tags: Manufacturing, Enterprise Resource Planning, Sage Software, Supply Chain Management