5 signs your tax determination needs attention

Tax determination is the backbone of accurate reporting, compliance, and recoverability. But if your team is constantly firefighting at month-end, it might be time to reassess your setup.

Here are five red flags that your tax determination process needs immediate attention:

1. Your tax team spends too much time fixing reports

If tax reporting becomes a time-consuming exercise at the end of every month, full of reconciliations, fixes, and manual workarounds – your determination logic likely isn’t doing its job.

Tax should be “right first time” at the transaction level, not cleaned up later.

2. Users are manually selecting tax rates

Any time a user has to manually choose a tax rate, there’s room for error and inconsistency. This is a key indicator that your system lacks proper rules or configuration, and a top priority for remediation.

3. You’re manually amending tax figures

Manual adjustments to tax amounts should raise immediate red flags. Not only does this increase audit risk, but it also shows that your engine isn’t calculating tax reliably. This should be in your top three concerns.

4. Recoverability isn’t automated

If your team is manually adjusting recoverable vs. non-recoverable tax or reconciling at month-end, the system is falling short. Recoverability logic should be baked into your tax determination setup, not handled manually after the fact.

5. Missing or incorrect tax lines on transactions

Transactions without tax lines whether due to zero-rating or missing determination logic  can distort reports. If a transaction is out of scope, it should be marked and treated that way explicitly to ensure clean reporting.

If these symptoms sound familiar, it’s time to evaluate your tax determination rules and technology.

Fixing the root causes now saves countless hours, reduces compliance risk, and gives your team back time to focus on strategic value.