Company Q&A - Sovos Compliance Provides Tax Software for an Evolving Market
Taxes. No one likes paying them, but it’s something everyone has to do. When you’re running a business, whether it’s an early-stage startup or a long-standing fixture in the Boston tech scene, keeping track of expenses and taxes is essential.
Sovos Compliance can provide defense surrounding tax compliance with their software. The company was founded in 1979 and over the past four decades, Sovos’ technology has grown immensely to keep up with continually changing tax regulations.
We spoke with Sovos President and CEO Andy Hovancik about how the company has been able to evolve over the years and who some of the users are. Hovancik also went into detail discussing what the company culture is like at Sovos’ offices in Wilmington.
Colin Barry [CB]: I’m a big fan of the phrase “origin story.” What are the origins behind Sovos Compliance?
Andy Hovancik [AH]: Sovos started as a sleepy sales tax business during a time when sales tax software had changed very little over the previous 35 years. However, we saw potential in the business in both sales tax and other tax compliance regimes around the world, so we brought in a team to lead the change in the company. Early on, we came to understand the way things worked then was going to radically change in the not-so-distant future. So, we aimed to change the industry.
At the same time, companies were moving to new business models, like e-commerce, which was adding regulatory and technical complexity to compliance. In addition, we quickly learned that governments, particularly outside the U.S., were also dramatically changing tax enforcement. Businesses were not expecting the changes and were ill-prepared for what was coming as governments began using big data and software to close long-standing loopholes in tax collection.
For example, Brazil closed a $50 billion value-added tax (VAT) gap in just a few years by mandating compliance at the transaction level through electronic invoicing, which kicked off a wave that has changed tax forever. We saw this as a huge business opportunity, but we also saw it as a chance to fundamentally reduce the friction between businesses and governments that had been so costly for both sides over the years.
When we first laid out our plan with one of the biggest advisory firms in the world, they told us we were crazy. One of the guys told us what happened in Brazil would "never happen in Europe." Less than two years later, we've seen the most disruptive tax rules in the world flood onto that continent. And, we've seen more change in the regulatory environment in these past two years than we had seen in the past ten.
Our goal with Sovos wasn’t to build a better tax software company. Our goal was to enable people to live a better way of life by transforming tax through technology - and that’s what we’re doing. We've done it by pulling together the most advanced and respected tax applications in the world on one modern, cloud software platform. And over the years we've grown from a small team in New Hampshire to a global company employing more than 1,100 people across three continents.
When we started the business, we knew something was going to change, but we never expected this. In fact, no one did. But today, Sovos is an integral part of many companies, safeguarding them against threats no one sees coming.
CB: What about your background? What lead you to become the CEO and President of the company?
AH: I have been fascinated with business for as long as I can remember. My mother ran her own home-based business so I was always around it as a kid. Early on, my aspiration was to lead a successful, admired company - it just stuck with me. From there, it was about gathering as many different career experiences as possible, so I “said yes” to every opportunity that came my way to learn about different industries, business functions, and people.
And of course, along the way, I found my passion - guiding successful organizations to the benefit of employees, clients, and investors. Now, as President and CEO of Sovos Compliance, I get to couple that passion with the innovation necessary to be outstanding in our rapidly changing industry.
CB: What is the ultimate goal of Sovos Compliance?
AH: Sovos was built to give businesses what they need to stay ahead of increasing regulatory burdens and risks anywhere in the world they operate. Our primary goal is to reduce the friction between businesses and governments, so economies can grow and communities can thrive. We’ve built our Intelligent Compliance Cloud to keep our clients ahead – wherever they choose to grow and no matter what governments throw at them next.
CB: Explain what your company does. If it’s a particular software/platform/service/etc. how does it work?
AH: Sovos provides software that safeguards businesses from the burdens and risks of modern digital tax enforcement, mainly on transactional taxes such as VAT and sales and uses tax. As governments go digital, businesses are dealing with increased risks, costs, and complexity. Sovos is the only solution built to keep them ahead by combining tax determination, e-invoicing compliance and tax reporting on one cloud software platform - working directly with the world’s largest financial software systems.
CB: Who are some of the users of Sovos’ software? Are there any use cases that stand out to you?
AH: The primary consumers of our solutions are the tax and compliance professionals who are responsible for keeping their organizations compliant in the face of a dramatically shifting regulatory environment. They are constantly balancing the need for strong internal controls to maintain compliance while enabling their organizations to explore new business models and modernize internal technology stacks. Since our solutions integrate with financial and business systems, we also work closely with IT Centers of Excellence to ensure reliable, scalable and secure infrastructure.
CB: How big is the team? Looking to hire any particular position in the upcoming months?
AH: Just three years ago, we were less than 500 people. Since then, we have made several acquisitions - most recently Paperless and TrustWeaver, two of the global leaders in e-invoicing compliance that combined allow us to cover every type of e-invoicing compliance in 60 countries, and FiscalReps, the world’s first end-to-end solution for insurance premium tax - and we hired 220 people just last year. Today, we have 1,100 employees working at Sovos globally.
We are always seeking talented individuals to join our global team and currently have over 100 openings within all areas of the business. While finding great talent can be a challenge, it’s something that is very important for our success, so we consider candidates very carefully. In fact, our recruiting process is designed to measure alignment with both the role the candidate is applying for and our values, as we strive to find the best teammates for our fast-paced culture.
We often hear from people that their peers at Sovos are smart and easy to work with, which is a big reason why people love working here.
CB: How many teams are located in the headquarters of Sovos? What is the company culture like at the office? What kind of company events do you have?
AH: We currently employee about 250 professionals at our offices here in Boston. At Sovos, we pride ourselves on being “local” for our customers, so we can quickly service their needs. Since we operate across 12 offices on three continents, we are more agnostic to the concept of a headquarters and value the contribution of all the Sovos offices serving our global customers. Each of our regions has key teams in sales, marketing, professional services, support and customer success. We also have a large R&D team across multiple offices made up of talented product management, UX/UI, software architecture and engineering professionals that have assisted in creating our global tax platform.
The culture at Sovos is built around our desire to create a challenging and rewarding environment, where talented, career-minded people can contribute, develop & grow. We are as committed to our employees as we are to our customers, so we focus on employee fulfillment and growth opportunities through our Whole Living Program. The employee-driven program enables employee success by cultivating their career, enhancing knowledge, giving back to the community and ensuring a healthy & sustainable life. Some of our perks and benefits include social events, lunch and learns, volunteer time off and professional development opportunities.
CB: Has your company participated in any trade shows/meetup events in the Boston area? What about events outside of Boston?
AH: Sovos invests in several industry trade shows throughout the year and even hosts our own events to increase our brand reputation, drive our pipeline and interact with our customers. In fact, we have participated in more than 50 events in the past year, including several in the Boston area. Our own hosted event series is called the Sovos Global Compliance Series, which has been held in cities such as Boston, New York, Sao Paulo, London and Bogotá. The purpose of this series is to bring the tax and reporting communities together to discuss the hottest topics impacting the industry, hear from trusted experts and share best practices with industry peers.
CB: I’m always interested in how a startup came up with its name. How did Sovos Compliance get its name?
AH: The Sovos name gets its origins from a combination of Greek words for “wisdom” and “tax”, sofía and fóros. When coming up with the name for the company, it was important for us to ensure our brand was grounded but with an eye toward the future. Thus, Sovos was born.
Images courtesy of Sovos Compliance