Tax & Compliance · 04
Determination at source
The shift from fixing tax after the fact to getting it right the first time.
The one idea
Determine the tax where and when the document is created — inside the transaction system, as the sales order, purchase order or invoice is raised — instead of extracting data afterwards and correcting it at month-end.
Right at the source beats right eventually.
Two ways to run it
After the factPost now, extract later, reconcile, correct, hope the audit agrees.
At sourceThe right code is set as the document is created, using the system's own data, with the reasoning logged.
Why it matters
- Fewer corrections — errors are prevented, not chased down later.
- Audit-ready by default — the reasoning is captured at the moment of the decision.
- Bad documents stopped early — a non-compliant line can be caught before it posts.
- Reporting falls out of the same data — no separate month-end tax workstream.
This is the principle Taxmarc is built around — but it's a general best practice: the closer to the transaction you decide the tax, the less there is to fix downstream.