It’s Time for Tax Intelligence


In recent years, many CFOs have extended their work beyond the borders of traditional finance and accounting activities by transforming financial data into actionable insights. These analyses help an expanding set of “internal customers” – including sales, supply chain, IT, HR, ESG groups, information security teams and more – make better, more strategic decisions.

Today, tax groups are poised to elevate their game in a similar fashion while fortifying their finance leaders’ analytical business insights with additional tax intelligence tools.

Leading corporate finance executives shed their profession’s longstanding “bean counter” reputations with talent and technology investments that turbo-charge their financial planning & analysis (FP&A) activities. According to Protiviti’s ongoing Global Finance Trends research, the implementation of advanced data analytics technologies has helped finance groups “generate more forward-looking insights from a much larger collection of data.” This research also shows that many FP&A groups have “shifted their gaze from historical performance metrics to massive data sets that yield forward-looking insights to strengthen forecasts, anticipate scenarios, projections and plans concerning products, supply chains, logistics capital allocation, and financial and operating performance.”

Tax groups can perform two actions to make a similar evolutionary leap. First, tax teams need to reduce time spent inputting tax codes and ploughing through other time- consuming, error-prone manual processes. Second, they need to harvest indirect tax data for actionable insights that help them increase accuracy, reduce audit risk, unlock additional cash, uncover new sources of cost savings, and strengthen their contributions to others in the organization (value-added endeavor). Advanced technology plays a central role in executing both of those objectives and tax groups need a financial and business data intelligence solution that empowers them and their finance partners to spend less time finding necessary tax data and more time adding strategic value to their business.

A technology tool deployed to generate tax intelligence should:

  • Extend beyond tax calculation and reporting capabilities: The technology should generate real time insights from financial, transactional and other business data. Which allows tax, finance, mergers & acquisitions and other groups to proactively identify areas of opportunity and risk so they can improve their tax performance and support business strategy.
  • Tailored to tax: While generic data-wrangling/visualization applications and home -grown solutions are used to generate tax intelligence, each approach has shortcomings. Industry-agnostic tools often require a fair amount of technical know-how within the tax group to operate in a sufficiently “tax-sensitive” manner. Homegrown solutions frequently require significant time and support from internal IT partners. Plus, neither of those approaches offers convenient access to tax research content, state sales summaries, purchases, taxes collected, taxes paid and more (e.g., drill-down capabilities for deeper tax data insights).
  • Easy to use: A tax intelligence solution should be designed to seamlessly access data from an ERP and other financial and tax systems (tax engines). It should also be cloud-based, “plug and play” and configurable for today and tomorrow with capabilities to cover the “what ifs” – in addition to supporting planning, compliance efforts and audit defense.

Today more tax executives are looking to generate a broader range of strategic
information from their financial and other data sources. These insights will help them ensure accuracy in compliance, planning and audit defense while following the required tax laws and regulations – enhancing the strategic decision-making insights they share with corporate finance and other internal tax group “customers.”

Blog Author

Michael Davis, Chief Tax Strategy Officer at Vertex Inc.

Michael Davis

Chief Tax Strategy Officer

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Michael Davis is the Chief Tax Strategy Officer responsible for advancing the company’s business and technology strategies to enable next-generation corporate tax transformation.

Michael joined Vertex from Nestlé Holdings, Inc. where, as Vice President and Corporate Officer, he had extensive experience in tax planning, compliance, audit controversy, provision, and operations, as well as tax data management.

During his career at Nestlé, he led the team that built the first digital corporate tax department, which has been recognized for its industry-leading best practices for automation and standardization of global platforms.

Michael holds a B.S. in finance from the University of Bridgeport; and an MBA in accounting and Post Graduate Certificate in taxation from the University of New Haven. He is also a member of the Business Advisory Council and executive director of the Executive MBA (EMBA) program at the University of New Haven.

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