Maximizing Tax Performance Through Digital Transformations

⇨ The migration to SAP S/4HANA should include considerations for tax determination and compliance, as neglecting these aspects may lead to ineffective 'lift and shift' transformations.

⇨ Organizations are increasingly opting for external tax solutions like the Vertex O Series tax engine, which provides automation for tax processes and integrates seamlessly into SAP, enhancing efficiency and compliance.

⇨ Keeping pace with changing tax rates and regulations is crucial; external tax solutions offer regular updates that relieve organizations from manual adjustments and improve accuracy, helping avoid compliance penalties.

Perhaps the biggest topic in the SAP landscape is the move to SAP S/4HANA. This important ERP upgrade is taking precedence, but other important workflows should be considered within the digital transformation. For instance, tax determination and compliance should be key considerations for companies investigating a S/4HANA migration. Tax technology transformation can help boost ROI, add to innovation, improve flexibility, and enable growth.

Organizations that fail to consider how the move to SAP S/4HANA may affect essential functions like tax are at risk of simply going through a “lift and shift” transformation – moving older and outdated workflows into their new ERP system. This can cause companies to miss out on the benefits of moving to S/4HANA.

Focusing on Tax and Compliance in Digital Transformations

When moving to SAP S/4HANA, organizations face a crucial choice when it comes to their tax determination approach: they must decide whether they want to create indirect tax determination logic within their SAP system or use a pre-built external tax solution.

More and more, SAP organizations are opting for external tax solutions, like the O Series tax engine provided by Vertex. It offers users automation capabilities for tasks like tax determination, compliance, and invoice processing, which speeds up the process and reduces the chances for errors.

Vertex’s tax engine also integrates inside SAP, eliminating the need for manual data extraction and validation. It frees up organizations in the midst of a digital migration from having to set up an entire framework of tax policy, which can be time-consuming and expensive.

One of the top concerns that tax professionals have is how to keep pace with the rapid rate of change within tax rates and regulations. Different countries have shifting and uneven rules, making it difficult for businesses to remain compliant and avoid penalties. This is another reason why SAP organizations are relying on Vertex O Series tax engines – they are regularly updated to accurately reflect all applicable tax laws. Removing the burden of manual updates saves companies significant time, improves accuracy, and reduces concern over compliance issues.

What This Means for SAPinsiders

As organizations make the move to SAP S/4HANA, they must decide on what level of customization will ensure that the migration is successful and allows their workforce to operate as efficiently as possible. For tax teams, they are faced with the choice of how to set up their tax management systems.

To maximize the efficiency and compliance of the new ERP, many SAP organizations are turning to Vertex and its powerful O Series tax engine. Vertex provides enhanced automation capabilities and constant regulatory updates to ensure that companies are able to execute essential workflows in a timely and accurate manner.

Vertex has more than two decades of experience collaborating with SAP. With such a deep history, Vertex seamlessly integrates into SAP systems, helping extend the value of SAP S/4HANA and allowing companies to ensure tax compliance.