Finding the Benefits of Sales Tax Automation with Vertex

As tax compliance grows more complicated and tax regulations grow more cumbersome, organizations are always searching for innovative solutions to help overcome these issues. One of the most common strategies is to rely on automation. SAPinsider’s recent Global Tax Management 2024 – Benchmark Report found that centralizing and automating tax data control framework across all transactional systems is one of the top actions that SAP organizations are taking to support their global tax management strategies.

Examining the Benefits of Sales and Use Tax Automation

Many organizations do not understand the potential impact that sales tax automation can have on the overall business. To illuminate some of these benefits, the tax automation experts at Vertex highlighted three key benefits that sales tax automation can offer:

Scalability

As companies grow and expand, sales and use tax content needs to be updated within each transactional system. Implementing a centralized, cloud-based automated tax engine removes this need. Tax engines like those from Vertex continually update tax content, situs rules, jurisdiction details and assign proper tax and exempt reason codes across jurisdictions based on regulations for invoice accuracy and expedited returns filing. This not only keeps tax calculation up to date, but removes the ongoing system update burden from IT. Expanding outside the US? Good systems will manage that with ease.

Accuracy

Tax calculation, exemption issues, failure to accrue and payment errors are worst-case scenarios for tax and finance teams creating customer disputes, opening the company to possible tax liability and create major problems during reconciliation periods. One of the top reasons why more and more companies are adopting up front tax automation solutions is to help ensure that all tax returns are accurate and filed on time downstream. This not only reduces the chances of penalties or audits but helps build trust with tax agencies.

Future-proofing

As companies adopt more advanced tax technology solutions, the benefits begin to accrue over the course of many years. When organizations automate sales and use tax workflows, it helps to reduce risk – not just of audits, but also the risk of disrupting IT operations to maintain tax content in every ERP, e-commerce, procurement or other transaction-based system. Freeing up IT gives businesses an enhanced ability to innovate. Controlled and consistent automation provides another layer of data structure often needed across an organization. Too, the ability to move this control into a cloud framework reduces tech overhead and maintenance. With edge capability, like the Vertex hybrid cloud offering, tax control can evolve and improve over time. When these workflows become more efficient, even the smallest improvements stack up and can save companies significant time and money in the long run.

What This Means for SAPinsiders

Tax and finance teams are tasked with being more efficient and delivering intelligent insights. Organizations can no longer afford to rely on outdated manual workflows to stay compliant. More and more, companies are turning to partners like Vertex that can help their businesses run more intelligently. Sales tax automation holds the unique capability to help the tax function become more agile, scalable and ready for the future.