As supply chains become ever global in scope, keeping track of suppliers becomes ever complex, and documentation and compliance efforts become unwieldy. The perils are fraught, though, as errors in process — especially as pertain to taxes — can have impact in the form of penalties.
To that end, Tipalti, a payments solution provider operating globally, has said it is boosting its tax validation technology to 47 countries, bringing the total tally to 50 countries.
The company’s tax form service, able to cross borders, helps firms on an automated basis gather up beneficiary data to work with tax forms, including 1099s. The company also helps smooth the processes of dealing with taxes and burgeoning regulation. Verification stretches across employee identification numbers and Social Security numbers, and payments to suppliers can be held back until forms are completed (through self-service portals), ensuring compliance and helping reduce the risk of fraud.
In an interview with PYMNTS, Chen Amit, chief executive officer and founder of Tipalti, stated that the recent push into new countries (with a focus on Europe) comes as demand from middle-market companies, with sales of $10 million to as much as $2 billion, grows for payments automation. The penalties can be rigorous, he noted, for non-compliance. In the case of the U.S., he said, fines levied can be as much as 30 percent of the amount that should have been withheld for taxes — “and, in other cases, people go to jail,” he said. And, he added, different countries have different payment requirements and processes. All told, the tax validation rules can span more than 3,000 across those dozens of nations now serviced by Tipalti’s expanded presence.
Against that backdrop, he said, Tipalti can offer U.S. multinationals, as they expand in scale and scope, and firms in countries elsewhere in the world support as they vet suppliers before payments are disbursed. That can be useful in situations that demand AML (or anti-money laundering) efforts, along with “know your vendor” initiatives. Those mandates can place strain on compliance and financial departments housed within firms, regardless of vertical, as complexity becomes difficult to navigate.
In the case of the latter, Amit noted that some firms, and even certain verticals, can have “more suppliers than would be paid” by a given firm at the center of a supply chain. The executive offered up the example of an online advertising firm that has as its suppliers a network of websites and application developers who hold ads and apps that can (or, in some cases, do not) generate revenues.
But, of course, not all those suppliers are used, and with compliance, vetting and support via third-party firms such as Tipalti, some clients are better able to understand how efficiently their own supply chains may be operating, down to the business-to-business relationship. Such insight can benefit companies across several industries, said Amit, including eCommerce, online marketplaces and manufacturing.