Exploring Trends in Tax Transformation with Vertex
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Key Takeaways
⇨ Companies face significant challenges in tax compliance as they expand, particularly with the addition of new tax jurisdictions, necessitating the need for modernized workflows.
⇨ The 2024 Global Tax Transformation Report reveals that over half of organizations are engaging in digital finance transformations to adapt to real-time tax reporting requirements and facilitate future growth.
⇨ Major obstacles to tax transformation include lack of IT support, budget constraints, and insufficient internal talent, highlighting the importance of adopting automated solutions to streamline tax workflows.
As companies seek to grow and expand their operations, tax teams often struggle to keep pace. Adding in new local, state, and international tax jurisdictions can complicate tax compliance efforts, particularly if organizations are still relying on manual, outdated workflows. Fortunately, tax teams have a wealth of advanced tools and techniques that they can take advantage of that will help them improve tax compliance workflows while maximizing efficiency.
Tax Transformation Trends
To help companies better understand the tax compliance obstacles they face and some of the top options they have to overcome them, Vertex recently released the results of its 2024 Global Tax Transformation Report. The report highlights how new reporting requirements are driving innovation in the tax technology space.
“The increasing presence of real-time and near real-time digital tax reporting mandates, rates and rules updates and the rapid pace of global business highlights the immediate need for tax and finance transformation,” said Peter Boerhof, Senior Director of VAT for Vertex’s Chief Tax Office. “While our data shows that some organizations are on different stages of the digital transformation journey, there are still many that must take action soon to future-proof their tax and finance functions and position their organizations for success in this digital-first, modern business landscape.”
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More than half of all organizations in the study (54%) reported that they are in the midst of a digital finance transformation or recently completed one. Many others are going through a broader IT or ERP transformation, like the move to SAP S/4HANA, or a digital tax transformation.
The transformations are typically spurred by the need to grow, as 80% of respondents said that they are preparing or optimizing their company for growth in the future. However, companies still have to work through some significant barriers in order to meet their tax transformation goals.
Overcoming Obstacles in Tax Transformation
Vertex’s survey found that a lack of IT support (34%), budgetary constraints (31%), and a lack of capacity and talent with internal teams (28%) stood in the way of transformation. To overcome these issues, Vertex offers solutions that cater to organizations of different sizes and skill levels. Companies can leverage solutions that reduce the burden on IT teams and automate essential tax workflows, freeing up tax teams to spend their time on other important tasks.
Companies that want to learn more can review the findings from Vertex’s Global Tax Transformation Report.
