Automating the Data Validation and Preparation Process for Indirect Tax Compliance

Why data integrity matters for indirect tax

Errors in tax data can be expensive. Fines, audit costs, late fees, and staff time spent chasing down corrections all add up quickly. For large companies processing hundreds of thousands of transactions, even small data quality issues can lead to serious compliance exposure.

The challenge is growing. Tax regulations change constantly. In 2020 alone, there were 592 sales tax changes across the U.S. In 2021, sweeping new VAT rules took effect across the EU. Tax authorities are also demanding more detailed data, faster, with some jurisdictions moving toward real-time reporting.

Why manual processes fall short

Despite this pressure, many tax teams still rely on manual, non-standard workflows. The risks are real: recurring data errors, lack of documentation, inconsistent reporting, and no clear audit trail. When the person who owns a manual process is unavailable, the whole workflow can break down. And when filing deadlines are tight, there is little room to catch and fix mistakes before returns go out.

Data ownership adds another layer of difficulty. Tax teams often depend on data that lives in procurement, customer service, or supply chain systems, systems they do not control. Getting corrections made takes time and creates friction across the organization.

What automation makes possible

Vertex Cloud Data Integrity automates and standardizes the data validation, analysis, and transformation steps needed for accurate month-end tax submissions. The solution is built specifically for tax professionals, not adapted from a general-purpose tool.

It works by flagging exceptions rather than forcing your team to review every transaction. Instead of combing through 500,000 records, your staff focuses on the handful that need attention. Pre-defined rules handle routine checks automatically, and custom rules can be created to fit your specific processes.

Key benefits for your tax function

Organizations using the solution report efficiency gains of 25% to 50%, depending on the process. Beyond speed, the solution reduces audit exposure by maintaining a complete log of who accessed data and what changed. This is critical when tax authorities ask questions years later. It also supports global compliance, accommodating any data file format and scaling alongside your business as it grows domestically and internationally.

For teams managing VAT, the solution integrates with Vertex Cloud VAT Compliance to support end-to-end determination, compliance, data integrity, and audit preparation, including evolving requirements like One Stop Shop (OSS) and real-time reporting.

Automation does not just speed up old processes. It creates an opportunity to rethink how data flows through your tax function entirely. The result is less time spent on data repair and more confidence in the returns you file.