Introducing CereTax! Sales Tax Software We Can Get Behind.
Michael J. Fleming is the founder and president of Sales Tax and More, a full-service consulting and solutions firm with a passion for state tax. He is one of the country's leading authorities on sales tax issues such as consulting and research, registrations, returns, nexus, drop-shipping, eCommerce, and service providers.
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Brent has over 27 years of experience servicing companies in a wide array of industries. Prior to joining CereTax, Brent was an Executive Director at Ernst & Young where he worked as the practice leader in the tax automation practice. Brent has successfully implemented numerous technical solutions for clients using a variety of financial and tax applications.
Brent has functional and technical expertise in SAP, Oracle, PeopleSoft, and other legacy financial and ERP applications. He has also led several large tax engine integration projects including Vertex, OneSource, Avalara, and TaxView tax applications. Brent has developed unique approaches to overall solution designs that include streamlined integration techniques as well as outsource and co-source service offerings which leverage proprietary software which he architected and led the development efforts.
While much of Brent’s career focused on tax technology solutions, his background also includes tenure as a sales tax auditor with the State of Texas and several years in the energy and petrochemical industries.
In this episode…
We talk to Brent Walker about CereTax, its mission, what sets them apart, and how it came to be!
Here’s a glimpse of what you’ll learn:
What is CereTax and what solutions does it offer?
Why was CereTax created?
Why is CereTax a great primary and add-on solution?
Who founded CereTax and why?
Connect
Episode Transcript - Audio Version
[0:10] Intro: Welcome to Sales Tax and More, your go-to resource for all things state tax-related. Now, here is your host, Michael Fleming.
[0:27] Mike: Hello, everyone. Mike Fleming here, founder of Sales Tax and More and host of the Sales Tax and More Podcast, where we talk about everybody's favorite topic, which is, of course, sales tax. Now today, we're gonna be discussing CereTax with Brent Walker, but before we do, let's introduce you to Sales Tax and More, and for those of you who don't know, Sales Tax and More is a full-service consulting and solutions firm, and we've got a team of experienced tax professionals. They're dedicated to fulfilling all of your state tax or related needs. We do a lot of sales and use tax returns. We do a lot of registrations, consulting, research, and like our name says, more.
[1:13] Now, before we go any further, I'd like to touch on the fact that I've not been a big fan of most of the software companies out there. Most of you have probably heard me complaining that they spend more money on marketing and on trying to provide services than they do in their core software. Today, I want to introduce you to a company that I believe has it right.
[1:37] They concentrate on their software, and they don't offer any services at all. So I'm very excited about what this company can actually do. Now to tell us about CereTax, we've got Brent Walker with us, and Brent has over 27 years of experience servicing companies in a wide array of industries. And prior to joining CereTax, Brent was an executive director at Ernst and Young, where he worked as the practice leader in the tax automation practice.
Brent has successfully implemented numerous technical solutions for our clients using a variety of financial and tax applications. Brent's a frequent speaker at the Institute of Tax Professionals, where he is a CMI. He's also contributed to the Tax Executive Institute and the American Petroleum Institute, and he's been a speaker for the Texas Society of Certified Public Accountants.
Welcome Brent
[2:38] Brent: Thank you!
[2:39] Mike: Now, before we get…hey, you're quite welcome. Tripping over my own tongue here, getting started. But before we delve into, you know CereTax, can you share with our listeners a little bit about yourself?
[2:51] Brent: Yeah, like you said, I've been in this business for a lot longer than I like to admit.
Started out my career as a sales tax auditor in the state of Texas. So I've got a pretty well rounded, I've got a, maybe one of the few that has experience in kind of all facets. Moved from the state of Texas to industry and the petrochemical and refining industry as a tax analyst there.
From there, I moved, and I've helped start up a company that was ultimately sold to a small consulting shop down in Houston. Then actually went into public accounting with KPMG. And then on to EY from there. So like you said, done a lot of work, primarily in the implementation of tax engines.
But I also did recovery work. Did a lot of consulting work on top of that, so, but my passion has always been in sales and use tax automation.
[3:45] Mike: And we can see by what you just shared with us that you've got a lot of experience there. So you know, you and I and some other members of CereTax have been talking about the products the solutions that you offer.
Do you wanna catch the audience up as to who CereTax is and what solutions you do offer?
[4:07] Brent: Yeah, sure. I'd love to. So CereTax is an indirect tax software company. As you mentioned, we've made a conscious decision to… as you… I think, the best way to put it is kind of stay in our lane and do what we do best.
[4:20] Mike: Yeah.
[4:21] Brent: Which is develop software. You know we wanna do that specifically for companies in complex and in industries with enterprise-level challenges. So we wanna, we wanna service those complex industries because we feel like that's where you know, there's too much oversimplification in a lot of those industries.
We also wanna provide output that's actionable. And really want to reduce the demands. Anytime you do a tax engine implementation, there's a lot of demand on the internal IT departments, and the way that we've architect our system is in such a way that we can reduce, if not eliminate, a lot of the effort that has to be put in from the internal IT department. So trying to skip over a lot of that customization.
[5:13] Mike: Great. Yeah. A lot of the companies out there today, they just don't handle certain industries very well. You know, like contractors, you know, construction-related industries. You know, oil and gas, and I know that these are some of the areas that you guys are gonna be specializing in.
[5:31] Brent: Yeah, construction oil and gas exploration and production. These are traditionally sectors in the market that are underserviced by the tax engine providers because of the complexity of the content, the complexity of the of the transactions that need to be analyzed. And it just doesn't lend itself very well to an objective determination of taxability.
[5:55] Mike: Yeah, absolutely. I'm looking forward to utilizing the solution out there because we work in with a lot of contractors saying there's just no good company to send them to. So glad to see that you guys are really specializing in that. Now, obviously, you're a relatively new company, and we see new companies popping up all of the time.
It seems since the Wayfair decision, all you have to do to say that you're a… you just say you're a sales tax expert. And a lot of these new software companies, they don't…they appear almost to be brand new to sales tax. You know, they're a lot of software companies that are very light on the sales tax credentials.
But, you know, when it comes to CereTax, we see your background. I mean, you've, you know, got both sides, the technology side as well as, you know, you were an auditor in the state of Texas. Is everyone there like that? Can you share some of the experiences of your peers?
[7:05] Brent: Yeah. I think yeah, all of, you know, myself and my partners are both, you know, have a minimum of 20 plus years experience in sales and use tax from, you know, all aspects of the workflow of sales and use tax workflow from, you know, front end determination calculation to tax engine implementation, development of custom solutions, all the way through to the compliance process.
We understand at a very deep level what the sales and use tax process looks like. And, and the fact of the matter is, is that it's complicated and that, unfortunately, there's a lot of companies out there, like you said, that are entering this market, and they're trying to oversimplify sales and use tax, and they're trying to do more.
You know, they want the market to believe that there's a one-stop shop for everything. And they want to believe that if you subscribe to their software or license their software, all of a sudden, sales and use tax is gonna become easy, and you won't have to think about it anymore. And that's just simply not true.
[8:11] Mike: Yeah. That some of the marketing out there actually says that. So yeah. It's good that you guys have as much experience as you do. You know, all of you were coming from very successful careers. Why did you all decide to get together to create CereTax? I mean, what problems did you see with the current software solutions? You mentioned some of them already. And what makes you different?
[8:37] Brent: Well, you know, it's a good question. I think from, from our standpoint, one of the first thing that we saw was lack of support. You know, we just, one of the things that I continually heard was that we can't get anybody to support our configuration.
If we, you know, if we went out and implemented a tax engine application. It was like this finger-pointing thing of, okay, well, that's not the software's fault, that was the consultant's fault, who did the implementation. And at the end of the day, the end user doesn't know who to get who to contact for support. Is it my implementer or is it the software, or is it the integration? You know, is it my ERP? So that's one of the things that we wanted to solve was we wanted to provide, really concentrate on those complex industry and know that there's one throat to choke, and that's us. You can come to us with any, any of the issues.
[9:30] And we've tried to create a very robust support organization for our clients. You know, the other thing was that we see that there's, you know, almost every solution out there, there's multiple solutions for different…whether it's different sectors of the market, whether it's telecom, whether it's manufacturing, whether it's purchase side versus sales side. Most of the time, the applications that are out there are separate applications.
What we wanted to create was one unified platform so that no matter what industry you're in, no matter what sales side, purchase side, telecom, construction, whatever it is, it's all gonna be managed through the same platform and you can only do that through the use of, of the latest technology, the serverless architecture that we've based our platform on.
The other solutions that are out there have been around a long time. Some of them have been retrofitted to be a cloud-based application, but in the background, it's still the same old technology and the same old processes, and the same desegregated sort of applications that are out there serving different purposes and and different requirements for configurations and that kind of thing.
[10:50] So, and then the other big thing that we saw was just lack of visibility into the results. There's not an application out there that you can see, okay, this was the result, and as I analyze that result, how do I proactively manage my configuration based on that result? So most of the time, a company will spend, you know, in some cases, millions of dollars on the implementation of a technology, and then they're, you know, the users are afraid to touch anything because they're afraid they're gonna mess something up. So it's kind of like they implement it and then the keys get handed over to the users, and then they don't know what to do with it. From that that point forward, these systems need to be constantly monitored. The configurations need to be constantly updated, and they need to have output that they can look at. That will give them the results in such a way that they can go back into the configuration and proactively manage it on a go-forward basis. So that was kind of the big thing, is giving the users the ability and the control to support their own configuration without having fear of messing something up.
[12:00] Mike: Yeah, I love all of that, and it's, what we definitely need, our clients, especially. By the way, I like your one throat to choke. That's the first time I've heard that. But one of the things when you talk about visibility. This is almost like having a research solution built into your tax engine.
I mean, you can literally pull up the research, and the citations, the statutes or whatever guidance is generating the taxability underlying it. Am I correct in saying that?
[12:42] Brent: Yeah
[12:43] Mike: That's what it looks like to me.
[12:44] Brent: Yeah, absolutely. I mean, that's one of the things that we tried to do is we wanted at the, at the lowest level of detail, whether it's a, you know, purchase side, line item, AP line distribution, or you know, sales order.
We wanted every transaction to be supported by the authoritative research. To support the taxability that was determined. So on any transaction line, you can actually reference the taxability of that of that transaction. So it's gonna give you the statute, it's gonna give you the rule, regulation, hearings, decision policy letters, anything that we've collected… that our content team has collected to support that transaction is visible on every transaction. If you go into any other application, you'll see their taxability code. But you can't see state by state what the taxability is, whether it's taxable or non-taxable or exempt on, you know, on a state by state basis where that's one of the things that we really wanted to provide is that way, you know, under audit, first of all, all your data is contained within our application.
And then all of the audit support, taxability decisions are also referenced on each line item.
[13:58] Mike: Yeah, I think that's absolutely wonderful, and no one else is doing that. So I applaud you. Now you've really answered my next question previously, but because it's such a big issue for me, this is, you know, software companies just don't concentrate on the software. You know, they get lost in the marketing. They get lost in trying to provide services, and you know, that's where they make some of the biggest mistakes, and then, unfortunately, when they're making mistakes, their customers bear the brunt of the problem. And what I really like about your business model is you're concentrating on the software.
You know, as you said earlier, you're staying in your lane. Just because this is so important to me and a number of my customers, you wanna share your thoughts a little bit more on this about not providing the services?
[14:59] Brent: Yeah, our focus is on accuracy, and support. So we've built an application that with the underlying rules engine that allows the system to be very accurate. So at the end of the day, what we want to do is we wanna provide output that allows either the client or the client's representative to either support an audit.
Or to provide output for compliance that's easy to upload into whatever compliance applica...[inaudible]. We do not do compliance. We're not in that business. We're not in the consulting business. We're not even in the implementation business, really. So we have partners that will provide support for implementation.
[15:40] We have partners that'll provide support for compliance, for audit support. Our job is to build the best software and support that software the best way we can. Our job is not to provide professional services that are outside the scope of what our intended purpose is. So you're exactly right.
We wanna focus on building great software, accurate software that produces output that can be leveraged either by the client or the client's representatives whether it's the front end of the process or the back end of the process.
[16:15] Mike: And that's one of the things that excites me the most. It's this concentration on the software itself. So many of the other software companies, you know, rather than building something themselves, they go out and buy a company. And I've heard it said that you know, I won't mention any names, but so and so is a great destination where great software companies go to die because once they get there they're not supported anymore.
And like you mentioned earlier, it's not all one solution. It's like you gotta sign out of this and sign into that, and you have to have multiple subscriptions. So I really like the way that you guys are, are going. Now one of the other things I really liked was during our conversations and demonstrations, I was very intrigued that CereTax is a great primary solution, but it's not only a primary solution.
I mean, there was one case sign there where it was used to add on to one of the existing software companies to plug their holes. And you know, this subject we could probably talk about all day. So knowing that we have limited time, could you briefly give us an example of where you're actually connecting with one of these other software companies to better improve the client's experience?
[17:46] Brent: Yeah. It's a great business model for us because, you know, in particular, on the purchase side of sales and use tax, you have situations where…well we, we've got a few clients that already have an existing tax engine implemented, and they've spent a lot of money on that, but they're not exactly confident that they're getting the right results.
So what we're able to do is to provide a batch upload process to take the results that they're getting. It's a combination of the results from their tax engine, data coming from their ERP system in a flat file that's formatted specifically for upload into our application. So once a month, what the clients do… it can be, it doesn't have to be once a month, it can be as often as they want, but typically it's once a month.
They'll upload a file that contains the tax results from that previous month's period. And our system acts as a backdrop to identify how much tax was originally paid on the purchase transaction versus how much tax does our application say should have been paid to drive a variance. That variance is gonna be either an overpaid variance or an underpaid variance.
[19:01] And then from there, the client can either elect to accrue for an underpaid variance as a use tax, or they can go back to vendors for refunds where they've overpaid vendors, or they can de-accrue previously assessed a use tax. But they can also go and use, leverage those results to optimize their current tax engine configuration.
So wherever we're finding those gaps, wherever those variances are, represent some sort of gap that they, that we can either resolve through an additional accrual through our output or by taking that result and going back and optimizing their current configuration. So we've had a lot of success with that method.
A lot of clients interested in that and they can sign up for as a month-over-month solution, one-time diagnostic assessment, or they can subscribe to it for a longer period of time.
[19:55] Mike: Yeah, and I was really intrigued by all of that, and you know, when we talk about variances, variances are created for the most part because the limitations of the software companies, they just don't handle, as we mentioned earlier some of the industries as well as others.
So it was really interesting to see that example.
[20:23] Brent: Well, the purchase side is a good example of that because, you know, purchases are inherently more complex because, as you know, the purchaser has ultimate responsibility for admittance of the tax.
And so and only the purchaser knows how they're going to be using the items and services that are being purchased, especially in complex industries like manufacturing or telecom, or construction. So, we have the unique ability to drive out those very subjective determinations where in a real-time tax engine implementation, you have more limited variables that can be passed through the integration for, you know, mapping to the content within the tax engine.
Whereas we can use more subjective variables, like line descriptions, PO descriptions, you know, we can build rules that derive other variables out from existing data. So it's a very unique way of doing it.
[21:22] Mike: Absolutely. So Brent, anything else that you wanna share before we close it out today?
[21:32] Brent: Well, I really appreciate the time and the opportunity to get on here and talk a little bit about CereTax and we're glad to be affiliated with you guys and looking forward to lots of new opportunities.
[21:46] Mike: Yeah, same thing here, Brent. We appreciate the time you took to explain about CereTax to our audience here, and we look forward to, to introducing it to our clients and utilizing it. So you know, in addition to us, if someone wants more information about CereTax how can they find out more if they want to go around us for some reason?
[22:14] Brent: Well, we hope they don't do that. We hope they just go through you all the time.
That would be great. We're at, you know, our website is CereTax.com, and you can look us up that way there's a contact page to put information into. If you wanna reach out to me directly, I'm Brent.Walker@CereTax.com, or my phone number is (678) 447-7633.
[22:44] Mike: All right. Well, thank you very much again, Brent, and if you have… you out in the audience have any sales tax needs, we offer a whole lot of solutions and services you can reach Ellie Moffat at emoffat@salestaxandmore.com - salestaxandmore.com is all spelled out, or you can visit our website at www.salestaxandmore.com
Again, all spelled out, and we offer a series of webinars that provide for CPE credit, which we may see Brent back on speaking about use tax in the near future. So again, thank you, Brent, for joining us today. Thank you to all in the audience that have joined us today, and we hope to see you at the next installment of the Sales Tax and More Podcast.
Thank you, everyone. Bye-bye.
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