Ultra eStore leans on Sabrix for on-demand software and tax expertise to support rapid ecommerce growth
“Anything a growth-oriented company can do to keep itself focused on its core business, it should do. Sabrix MTS relieved us from the need to invest in people and systems to manage sales and use tax compliance, with the assurance that it’s being done right. The money and energy we would have expended handling tax has been invested in growing the business.”
-- Lance Baker, vice president, Ultra eStore
At a Glance
Tax Challenges
- Rapidly growing startup company
- No sales and use tax expertise
- Need to limit overhead
- Fast-growing nexus exposure
Benefits
- Able to focus finance team on core business
- Confidence in a trusted tax platform
- Results-driven pricing with no hidden costs
The Customer
In July, 2007, 20-year old Ultra International launched Ultra eStore, a direct to consumer ecommerce channel for its popular, all-natural home and personal care products. Marrying the convenience of online sales with the reach of a multi-level marketing model, fast-growing Ultra eStore sells directly to distributors and consumers through its site: www.myultraestore.com. Individuals are invited to become Ultra distributors by opening and operating their own online eStores, with store setup, marketing, back office, and auto-shipment support from Ultra.
The Challenge
Ultra’s management knew from experience the difficulties of dealing with complex and fast-changing state tax laws. They understood the potential consequences of non-compliance and the pain of tax audits, and were determined that the new Ultra eStore would be positioned to minimize audit exposure from the start. With individuals opening eStores around the country, sales tax nexus would be quickly created in all 50 states, so the sales tax management challenge promised to be substantial. And with Ultra handling the backend tasks for the various eStores, it was critical that sales tax calculation and reporting be accurate and cost-effectively managed.
“Previous experiences reinforced the necessity to get it right from the beginning,,” says Lance Baker, vice president, Ultra eStore. “To cost-effectively launch our direct to consumer division we didn’t want to invest in specialized tax employees or create an IT infrastructure to manage sales tax reporting. We knew we needed a proven partner that could offer the people, technology and processes to ensure tax compliance across the U.S. at a lower cost than we could manage internally.”
The Solution
Ultra selected the Sabrix Managed Tax Service (Sabrix MTS), an end-to-end outsourced sales and use tax service that addresses the complete tax management process, from address validation and tax rate maintenance, determination and calculation to return preparation including audit research and documentation. Sabrix MTS functions as an extension of a customer’s finance department, combining on-demand tax management software and tax research with a dedicated team of tax professionals and best practices to minimize the hassle and reduce the costs of tax compliance while limiting audit exposure.
“What attracted us to Sabrix MTS is that we could hand over the entire transaction tax process to their tax professionals while we focus on growing our new business,” claims Baker. ”We don’t have to hire, train and retain personnel to be our in house tax experts, manage monthly rate updates, research product taxability and prepare monthly returns. It is the most affordable way we found to get our tax processes covered with the assurance and review of professional tax experts.”
Given Sabrix’s experience addressing the complex tax needs of Global 2000 companies, Ultra determined that Sabrix MTS was also in the best position to scale seamlessly as the Ultra eStores network continued to grow. Capping off the decision was Sabrix MTS’ simple fee structure and monthly subscription model. Explains Baker, “The beauty of a managed service like Sabrix MTS is that they have to win your business anew, each and every month. Sabrix has shown that it is able to do this, delivering consistent value backed by exemplary service, starting from day one.”
The Results
Ultra eStore has expanded its business presence across the U.S. and now does business in almost every state. Sabrix MTS has easily kept pace, functioning as a trusted partner to ensure sales and use tax compliance in an extremely cost-effective fashion.
- Trusted tax intelligence: With Sabrix MTS, Ultra benefits from the combination of tax intelligence from Sabrix multi-disciplinary tax professionals, complete tax process management as well as SAS 70 certified tax research for 13,253 tax authorities.
- Low cost of compliance: Ultra does not have to trade-off compliance costs with audit risks, but now benefits from the best of both worlds. Ultra has the highest degree of accuracy and lower risk of audit exposure at a more affordable cost than if they hired internal personnel to manage it.
- Seamless scalability supporting rapid growth: Since implementing the Sabrix MTS service, Ultra’s quickly growing online business has scaled seamlessly and is allowing the finance team to focus on more strategic activities without worrying about sales tax processes or having to add sales tax-savvy accounting staffers.
Concludes Baker, “Anything a growth-oriented company can do to keep itself focused on its core business, it should do. Sabrix MTS relieved us from the need to invest in people and systems to manage sales tax compliance, with the assurance that it’s being done right. The money and energy we would have expended handling tax has been invested in growing the business.”