Transformation is Driving Global Tax Management Strategies

As Vertex’s Carolina Macias mentions SAPinsider’s dedicated research report on the global tax market is packed with findings and insights relevant to leaders, managers and ERP users in the finance, tax and IT functions among other organizational groups. 

First, when it comes to priorities and drivers, it’s noteworthy that 45% of survey respondents (SAPinsiders who work in the finance, accounting, tax and IT groups) view the digital transformation and modernization of tax and finance functions as a top factor impacting their global tax management strategy. We see this transformation being driven by migrations to S/4HANA, increased automation, and the incorporation of more artificial intelligence (AI) and machine learning capabilities.

Second, there is a strong demand for improved visibility, analytics and reporting across the company’s business applications, transaction systems and platforms. Thirty-four percent of survey respondents cite this need as a critical tax management priority.

Third, and perhaps most important when discussing external challenges around tax, 31% of respondents report that increasingly complex compliance management, governance and regulations are affecting their tax management priorities and actions. 

It’s also important to highlight how responding organizations plan to address those three strategic priorities. The findings shows that two significant actions are being taken by a large percentage of companies. One is the centralization and automation of a control framework to ensure tax data consistency across all transactional systems and platforms (cited by 53% of respondents). The other is a heightened focus on improving the collection, transfer, and management of data across order-to-cash (O2C), procure-to-pay (P2P), and record-to-report (R2R) business processes (cited by 47% of respondents). 

When it comes to automation, SAPinsiders are deploying a range of technologies to advance their tax transformations. Sales and use tax determination tools or tax engines sit together atop a diverse list that also includes:

• Tax localization tools; 
• E-filing and e-documentation management and global indirect tax reporting tools to support compliance challenges; 
• Other solutions to establish tax controls frameworks; 
• Audit management software; and 
• Dashboards to visualize data and provide real-time analytics of tax-related business activity.

Kudos to our partner SAPinsider for producing such illuminating research findings on the current state of global tax management strategies.