Manufacturers and Distributors – Using Cloud Solutions to Transform Tax Technology

Digital transformation is reshaping the manufacturing and distribution (M&D) industry. Companies are migrating critical systems to the cloud, rethinking supply chains, and looking for ways to reduce complexity. Tax management sits at the center of all three challenges.

Why tax and IT alignment matters

Indirect tax touches every part of the supply chain. Governments worldwide are increasing scrutiny of indirect taxes. VAT is now enforced in 170 countries, and tax revenues from production and imports made up nearly 14% of GDP across EU countries in 2021. When tax and IT teams work in silos, the cost shows up in errors, delays, and missed compliance deadlines. Bringing these two functions together, early and often, is one of the most effective steps an organization can take.

The pressure to modernize is real

A survey of M&D professionals identified four primary pain points with current indirect tax processes: high cost, poor integration with line-of-business software, under-utilization of data, and too many manual errors. Nearly three-quarters of manufacturers have already upgraded their ERP or plan to within the next 12 months. And 97% of respondents are shifting at least some applications to public or hybrid clouds.

What cloud tax solutions actually solve

Moving to a cloud-based tax engine reduces hardware costs and labor-intensive work, improves data accuracy, and frees up internal IT resources. It also makes it far easier to keep pace with constant regulatory change. Vertex's own research found 542 sales tax rate changes in 2022 alone. No manual process can keep up with that volume. Automated tax calculation handles rate updates, multi-jurisdiction rules, and cross-border complexity, so your team can focus on higher-value work.

Size shapes strategy, but the direction is the same

Smaller M&D companies tend to prioritize automation and global expansion. Larger ones lean toward data analytics and the ability to manage change at scale. Regardless of company size, nearly 9 in 10 survey respondents expect to upgrade or purchase new tax solutions, with more than 80% of those moves expected within 12 months.

How Vertex supports M&D companies

Vertex integrates with more than 100 ERP and financial system providers, giving M&D companies a single tax platform for both sales and procurement transactions. Vertex solutions help improve compliance locally and globally, reduce tax-related risk, streamline audits, and support digital transformation at every stage of growth. Whether you are managing direct-to-consumer channels, cross-border transactions, or complex VAT requirements, Vertex provides the tools to handle it with confidence.