Companies have been able to dramatically reduce their risk and comply with tax laws by leveraging automated tax management tools, according to a new study by Boston-based Aberdeen Group, which is part of Harte-Hanks (NYSE: HHS). 

In the study report, Effective Sales and Use Tax Management: Reducing Errors and Increasing Productivity, Aberdeen identified best practices and current capabilities in transaction tax management. Top-performing companies managed sales and use tax and value-added tax changes with software integrated into their finance technology systems. 

"Top-performing companies are growing steadily to include new sales territories and supplier relationships each day,” said William Jan, a senior analyst with the Aberdeen Group. 

“With more responsibilities ahead to comply with the multitude of dynamic tax rates, top companies need to continue to use automated tax solutions to stay competitive. Dedicating staff time to work with government auditors and/or correct tax mistakes creates additional operating costs – funds that could otherwise be invested in more productive activities. Top companies demonstrate significant year-over-year cost reductions in audit penalties, fines, overpayments, and corrective labor.” 

To view the report, click here.