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Automating the Tax-Procurement Interface

As most tax leaders are only too well-aware, the tax and procurement interconnect generates a level of complexity that can place a serious strain on the native tax functionality in ERP and procurement systems. That means lots of work for tax departments. This explains the attraction of a tax engine that can cut through the complexity and control all tax determinations and calculations throughout the procure-to-pay process.

But the gains aren’t limited to the tax department. Automating the tax-procurement interface delivers beneficial impacts for a wide range of stakeholders. For example, it can improve the financial statements. When tax errors occur with any frequency, finance and accounting teams tend to post larger reserves to cover underpayments and potential audit penalties. Heightened tax compliance accuracy gives them the confidence to reduce the level of reserves they maintain. Improvements in the accuracy of tax payments can also free up working capital.

The most exciting opportunities, however, are the ones that open up for the procurement department. Tax engines apply the same transformative technologies that procurement teams have seen in their own software platforms, including advanced analytics, artificial intelligence and machine learning. My colleague David Deputy, Vertex Director of Innovation, points out that “these advances remove even more manual tasks from procurement while enhancing human activities and decision-making. It essentially equips procurement professionals with a robo tax advisor that helps them do their work.”

Procurement leaders are in a position to ask some exciting questions, such as:

How can advanced tax tools be harnessed for analytics that improve sourcing and pricing strategies?
Which facets of the P2P cycle would benefit most from a robo tax advisor functionality?
What process changes and improvements will help us optimize advanced tax technology?

It’s this type of cross-organizational impact that makes tax automation such an exciting move, as David notes: “These technologies enable a tax department to become more efficient while more effectively serving other corporate functions.”

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.

Michael J. Bernard

Vice President of Tax Content 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 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 Senior Director – Tax Counsel. Michael 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. Michael 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. Michael also served on the board of directors, executive committee, and chaired committees for The Tax Executives Institute (TEI) for nearly 25 years.