Tax management in retail: how to use technology strategically?

In retail, tax management is a complex task, involving the issuing of tax invoices, monitoring legislative changes, and calculating taxes. Automating these processes is fundamental to reducing manual workload and minimizing human errors, allowing employees to focus on more strategic tasks. 

It is known that in Brazil, the bureaucracy involved in fiscal documents also carries an advantage: we are one of the few countries that centralize information about commercial and tax transactions in the same document, which is official and auditable. Furthermore, each tax invoice contains more than 600 fields, many of which are validated by the tax authorities themselves, and which concentrate relevant information about your business, product, supplier, and transporter. Therefore, beyond all the related tax and procedural obligations, the invoice also brings a competitive advantage to those who know how to analyze it and create alerts based on its fields. 

“Technologies are crucial for ensuring compliance and efficiency in tax management, but also for transforming data into strategic insights in a timely manner. At their peak, they offer the ability to convert tax bureaucracy into a competitive advantage, essential for survival and sustainable growth in the highly dynamic retail environment,” says Marcus Araújo, Head of Data & Principal Data Scientist at Archivedplatform responsible for managing tax documents for more than 140,000 companies.

The specialist explains the importance of automating administrative processes in retail companies and comments on how to leverage tax data for business benefit. 

Strategic tax management

Implementing an ERP, enterprise resource planning software for retail companies, is crucial for efficient management control. This includes managing cost price, calculating profit margin, setting selling price, inventory control, and issuing invoices. A process automation system integrates the various areas of the company, optimizing tasks and increasing operational and financial efficiency.

"In my experience, analyses with a broad strategic scope usually take 80 to 90% of the time spent on researching and consolidating information; that is, for every 10 hours of work, only 2 hours are actually dedicated to analysis. Furthermore, they can require 3 to 4 versions before a decision is made. Having an ERP integrated with all useful and organized information sources can therefore recover data cleaning time and reduce the time to decision-making, with an effectiveness increase of up to five times and more well-founded analyses," evaluates Araújo. 

Integrating ERP systems with fiscal data automation is becoming essential for retailers to make informed and effective decisions. Extracting and analyzing fiscal data allows retailers to identify purchasing patterns, seasonality, and consumer preferences. This information is vital for optimizing inventory and planning marketing campaigns more accurately.

In the retail market, companies handle vastly different volumes of tax invoices. Some import a few hundred invoices monthly, while others process 30 million per month. A good example of this occurred when a retail giant needed to reduce errors in reconciling purchase orders with their suppliers' invoices. Delays and failures in this process were impacting various operational areas across Brazil. After automating invoice capture and structuring, they not only mitigated errors but also gained visibility into which suppliers best met their obligations. This visibility and control over suppliers allowed for better policy design, ensuring predictability for all stakeholders (suppliers, warehouses, stores, and end consumers), the specialist comments. 

Implementing automated and strategic tax management brings numerous benefits to the retail sector, such as tax control and cost reduction. Automation provides greater financial control, allowing for the correct parameterization of products and taxation, as well as more efficient inventory control.

Productivity optimization and tax compliance can also be cited. The integration of company processes and areas optimizes productivity, allowing for comprehensive analysis and more assertive decision-making.

Furthermore, automation allows for continuous monitoring of tax data, ensuring compliance with government regulations and mitigating the risk of penalties.