Talking ShopTax

Talking Shop: How Do You Process Tax Payments?

By January 17, 2024No Comments

Editor’s note: NeuGroup’s online communities provide members a forum to pose questions and give answers. Talking Shop shares valuable insights from these exchanges, anonymously. Send us your responses: [email protected].

Member question: “I wanted to ask how your organizations process tax payments (federal, state, sales and use, etc.)? Through your ERP system, via manual wires, direct debit or using outside vendors?”

NeuGroup Insights
 asked the questioner about the circumstances at his company that led to his question. His reply: “Tax payments are very complicated, especially state taxes and sales and use taxes. I wanted to look for best practices to drive payment efficiencies.”

For additional insight about the question, NeuGroup reached out to an experienced tax professional at a mega-cap corporation. “They may not be at an ideal state today (e.g., manual payments/wires which are always more subject to fraud/error) and are looking for support to embed payments structurally in an ERP system, which of course takes investment of time and resources, “ he said.

  • “Direct debits and outside vendors have challenges as well,” he added. “Like any payment, the more they can be embedded in the ERP infrastructure, the more control you can put around process.”

Peer answer 1: “Bank of America has a very robust tax payments module that has most of the tax authorities already preset and you could just process using their templates. There might be other banks offering the same, but at a former employer we used BofA’s module, which is highly recommended if you make many payments.

  • “At my current company, we still process using the tax authorities’ websites and then approve direct debit transactions on our bank account.”

Peer answer 2: “It is a mix! But we do not use third-party, and we do not allow direct deposit.

  • “ACH – State/local taxes: Manual batch upload into banking portal.
  • “Wires – Federal tax payments: Processed through ERP and then manually entered into API and routed.
  • “Checks – State/local tax payments that don’t accept ACH: processed through ERP, check generated.”

Peer answer 3: “We use the entire array of options. Citibank tax module, ERP generated, manual wires.”

Peer answer 4:
 “We do it a few different ways depending on the tax authority and payment type. Happy to have a call.”

Justin Jones

Author Justin Jones

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