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5 Reasons to Integrate Tax Technology and Procurement Systems

In a previous post, I suggested that businesses could realize significant benefits by adding a third-party transactional tax engine to their procurement systems. In this post, I’ll explore five of those benefits in more depth. 
 
This tax-procurement systems integration enables you to: 

  1. Ensure correct product mapping: The rules governing the assignment of a tax category to a product or service are complex; incorrect or manual mapping in the procurement platform can lead to overpayment or underpayment. Tax engines can ensure the correct tax determination across multiple jurisdictions. In addition, digital purchase catalogs can help procurement improve master data control by ensuring that the most frequently purchased items are correctly described and the proper attributes assigned to support the mapping process. 
  2. Eliminate in-house transactional tax research: ERP and e-commerce systems don’t provide deep enough content to keep up with constantly changing rules. Tax platforms are continually updated by the provider, removing the research burden from the tax department’s shoulders. 
  3. Ensure a reliable, repeatable accounts payable (A/P) process: The tax engine replaces human decisions with reliable, rules-based automation, improving accuracy and reducing risk. You don’t have to spend so much time answering tax questions from A/P. 
  4. Simplify exemption certificate management: Tax jurisdictions often require exemption documents to be produced at the time of sale and stored for audit purposes by the vendor to substantiate the exemption. Tax platforms can integrate with your certificate management system to ensure that you produced these documents accurately. 
  5. Enable scalability: A tax engine can easily expand as your business grows. For example, as you add new procurement systems or product lines, you can usually connect them to the tax platform with minimal customizing. If you install a new ERP system, you won’t have to start coding from scratch. 

I take a deeper look at these advantages in a Tax Executive article. The article also considers how pairing up tax technology and procurement systems can help you achieve greater accuracy, reduce audit assessments and improve tax governance.

Disclaimer

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.

Blog Author

Michael J. Bernard, Chief Tax Officer – Transaction Tax at Vertex Inc. Vertex's Chief Tax Office (CTO) provides insight regarding the impact of tax regulations, policy, enforcement, and emerging technology trends on global tax department operations.

Michael J. Bernard

Vice President and Chief Tax Officer

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Michael Bernard is the Chief Tax Officer of Transaction Tax. In his role, he provides insight and thought leadership around tax department operations, U.S. indirect tax, tax risk management, and tax policy, as well as emerging tax trends. He is also responsible for influencing emerging technologies which meet the continuing regulatory changes of the corporate tax community. He is an executive-level tax attorney with a diverse portfolio of experience in corporate tax, administration, and finance, including a substantive knowledge of U.S. and international tax laws.

Prior to joining Vertex, Michael was in various tax leadership roles at Microsoft Corporation for 28 years, the most recent being General Manager & U.S. Tax Counsel. He led teams in the following functional areas: direct and indirect tax controversy, sales and use, business license, property, tax IT, SOX, and telecommunications. He also co-led a corporate taxpayer advocacy group with the Washington Department of Revenue and was a Director on the Board of the Washington Research Council. He has also testified before administrative and lawmakers at both the federal and state level.

Michael earned both a J.D. and a Bachelor of Science in Business Administration from Creighton University. He is a part-time lecturer of Law in the LLM program at the University of Washington School of Law. He also served on the board of directors, executive committee, and chaired committees for The Tax Executives Institute (TEI) for nearly 25 years.

Tax Today Podcast Series: Procurement

Still haven’t cracked the code on indirect tax and procurement? Check out our podcast series featuring discussions with tax, IT, and procurement specialists focused on shaping tax in the procure-to-pay process.

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