Numbers and Narratives: Keys to Effective Tax Technology Business Cases

What makes for a better tax technology business case: numbers or narratives?

The answer is both.

This is important for tax leaders to keep in mind as they make the case for upgrading from legacy, on-premises tax technology solutions to cloud-based tax automation. Most tax groups want to move to the cloud because doing so helps lower costs while giving them access to new functionalities and advanced technologies and tools, including artificial intelligence (AI). Yet, common obstacles often delay these cloud migrations. On-premises financial and ERP systems are often entrenched in the organization. CFOs and CIOs who typically control the purse strings for major technology investments have bulging tech-investment priority lists. They also may be concerned about the magnitude and disruption of ERP-centered cloud migrations.

The good news for Vertex customers with on-premises solutions is that they can migrate to the cloud as part of a larger ERP transformation or as a stand-alone tax effort (working closely with IT, of course).

Either way, creating a thoughtful business case – one that tells a compelling story supported by quantitative and qualitative benefits – represents a crucial initial step. From a quantitative standpoint, cloud-based tax automation can help reduce IT maintenance and support costs. Related compliance optimization opportunities can help reduce operational costs and errors, in accounts payable processes, as well as contribute to improvements in invoicing accuracy. The overall goal is to improve the efficiency of the order-to-cash cycle.

The scalability that cloud-based tax automation offers also can yield valuable payoffs, even if these benefits are difficult to quantify. For example, an organization that plans to launch a major new product and/or services offering or selling into a new market cannot do so until those transactions can be properly and accurately taxed or exempted. Any delays in getting that tax compliance requirement in place amount to lost revenue opportunities.  Another example of a more qualitative benefit associated with cloud-based tax technology: many corporate governance models call for automation solutions that de-risk high-volume, repetitive processes, such as tax compliance, accounts receivable and accounts payable.

Also, because tax groups are subject to multiple reviews – from internal auditors, attest auditors and tax jurisdictions – audit committees of corporate boards increasingly expect tax leaders to have the most effective supporting automation in place.

As tax leaders compose their business case for migrating to the cloud, they must thoughtfully consider how the CFO and IT teams utilize the benefits of automation, along with the tax department. Framing compliance and audit risks, cloud migration, talent retention, tax planning enhancements and technical debt as strategic narratives can strengthen the business case for tax automation, elevate tax’s influence over adjacent processes and foster stronger collaboration with the CFO and other business leaders.

PLEASE REMEMBER THAT THE VERTEX BLOG PROVIDES INFORMATION FOR EDUCATIONAL PURPOSES, NOT SPECIFIC TAX OR LEGAL ADVICE. ALWAYS CONSULT A QUALIFIED TAX OR LEGAL ADVISOR BEFORE TAKING ANY ACTION BASED ON THIS INFORMATION. THE VIEWS AND OPINIONS EXPRESSED IN THE VERTEX BLOG ARE THOSE OF THE AUTHORS AND DO NOT NECESSARILY REFLECT THE OFFICIAL POLICY, POSITION, OR OPINION OF VERTEX INC. ⁠