How Remote automated their tax processes to become compliant in 80 markets

Background

As one of the world’s fastest-growing startups, Remote seeks to simplify the way that organisations manage globally distributed workforces. The company — which was founded in 2019 and recently closed a $300 million Series C round, pushing its valuation to $3 billion — enables customers to quickly hire employees and contractors across the world by operating as the legal employer of international talent.

To this end, Remote manages salaries, benefits, local taxes, compliance, and everything else that impacts employment. Currently, the company operates in 80 international markets and has more than 930 employees working in over 65 countries. As Kirsten, Head of VAT/Indirect Tax at Remote, pointed out:

We are incorporated in 80 countries. We have 80 rules to follow and 80 different returns to file, and we must ensure proper invoicing.

Challenges

Due to the complex nature of their operations, Remote needed a consistent way to invoice clients that enabled them to ensure they were invoicing correctly in each jurisdiction. Additionally, Remote needed a way to register all of their invoices in one central location to create an audit trail for compliance reasons.

Meanwhile, global invoicing was getting increasingly complex due to governments increasing their requirements on how companies should issue invoices as proof of sales. For example, some countries require a QR code on all invoices while others demand invoices to be reported in real time.

With 25 years of experience working with value-added taxes (VATs) and tax technology in many different companies, Kirsten has seen a paradigm shift in the VAT landscape. As regulations have evolved, it’s become much more difficult to achieve global compliance.

“I can manually handle one to three of the more complicated countries, but then I’m at maximum capacity,” explains Kirsten Best, Global head of VAT/indirect tax at Remote.

The whole landscape is shifting heavily. It’s no longer possible to ensure invoicing compliance after a transaction. You have to do it instantly.

Recently, it became evident that time constraints and the increasingly complex requirements were making it very difficult for Remote to achieve compliant invoicing in all 80 markets. Additionally, Remote was handling invoicing processes manually while scaling rapidly — creating a situation where compliance could end up running behind.

I have a goal of 100% compliance,” Kirsten continues. “I want to be able to show the tax authorities that I’ve implemented an automatic process and that I’m not relying on people who might make mistakes.

Overall, Remote needed to:

• Ensure tax determination on any transactions was automatically handled across countries and business flows
• Issue compliant invoices from local companies to one central entity across 80 markets (inter-company invoicing)
• Ensure they could issue e-invoices in real time, in accordance to any local need in any jurisdiction
• Implement proper invoicing procedures to ensure compliance across the organisation

In previous positions, Kirsten had been part of teams that built tax compliance solutions in house and worked with large-scale tax software integrations. She knew that these solutions took years to implement, and that no solution was currently offering coverage across all of their operating markets.

Solution

Seeking a better way forward, Kirsten and her team started looking for a solution that would address all of these challenges. Most importantly, the right solution would offer a quick integration process that would consolidate all of Remote’s data, which was scattered across multiple sources and repositories.Meanwhile, global invoicing was getting increasingly complex due to governments increasing their requirements on how companies should issue invoices as proof of sales. For example, some countries require a QR code on all invoices while others demand invoices to be reported in real time.

After doing her due diligence and researching potential solutions, Kirsten ultimately came across Fonoa, a tax automation platform designed to help digital businesses with global operating models ensure tax compliance across multiple jurisdictions. Thanks to Fonoa, and the flexibility of the tax engine which was built for instant integrations, the Remote team was able to integrate data ahead of schedule.

Remote integrated the Fonoa Reporting and Invoicing modules after determining they were the only solutions on the market that would meet their current and future requirements. As a result, invoices were issued automatically, and data transmission between Remote and local government agencies was facilitated via one central platform. This, in turn, enabled Remote to efficiently satisfy the requirements of each tax jurisdiction while avoiding manual intervention and ensuring compliance.
Fonoa is an all-in-one solution. It has e-invoicing, invoice layouts, and a powerful tax engine all in one platform.

Fonoa is an all-in-one solution. It has e-invoicing, invoice layouts, and a powerful tax engine all in one platform.

Key Outcomes

With Fonoa’s solutions in place, Remote has peace of mind that comes with knowing they won’t incur penalties for failing to comply with local tax requirements, including real-time reporting of invoices (e-invoicing) in jurisdictions that mandate it. Additionally, Remote can rest comfortably knowing that their invoices will be processed correctly and on time. As an added bonus, employees no longer have to spend hours of valuable time each month producing documents manually.With automation powering their operations, they also knew that each transaction’s tax treatments were handled correctly, every time. No human error possible.

Looking ahead, Kirsten is confident that Fonoa’s suite of products will support their compliance goals now and in the future while helping Remote save time and resources. Additionally, Remote won’t have to hire as many people over the long term to maintain an internal tax engine because the Fonoa team handles all of those responsibilities. Without the Fonoa solution, the Remote team would have had to continue relying on manual processes, and potential human mistakes, which ultimately could lead to non-compliance and audits from local governments.

Fonoa is an all-in-one solution. It has e-invoicing, invoice layouts, and
a powerful tax engine all in one platform.