The Automation Advantage in Compliance

Companies are overhauling their organizational compliance models to mitigate risk, unlock savings and performance gains and leverage new technology to improve decision-making. This work extends to tax compliance, and indirect tax groups can provide valuable input on their company’s larger compliance transformation activities.

If you need a rundown on the current state of compliance, PwC’s Global Compliance Survey is a helpful resource. Based on a poll of more than 1,800 executive leaders across most industries, the report provides a comprehensive overview of the latest compliance practices, challenges and innovations. Here are the primary goals compliance leaders are trying to achieve right now:

• Optimizing compliance strategies
• Building a business case for technology investments
• Improving stakeholder conversations
• Developing talent
• Reinforcing the value of compliance activities

Tax leaders operate according to similar objectives. When boards and C-suites identify their compliance priorities, they most frequently point to:

• Understanding the link between compliance and reinvention
• Accelerating speed-to-market
• Reinforcing the need for connected, reliable data.

Tax leaders and their teams play a vital role in executing these priorities. For instance, when a company enters a new region, establishing compliance in tandem with operations is essential. Leveraging tax technology stacks that support the full compliance cycle—from calculation to planning—helps ensure reliable, connected management of tax data.

Not surprisingly, PwC’s survey research suggests that increasing regulatory complexity marks the top driver of new compliance approaches: 85% of respondents say that compliance requirements have become more complex in the last three years. Regulatory factors are also driving compliance investment decisions: 44% of respondents identify regulatory, government or other enforcement or response factors as the main influence on these investment decisions.

While that’s not a shock in today’s regulatory environment, the study notes that “the more interesting shift has been the number of companies investing in technology to take advantage of new technologies that enhance effectiveness and reduce costs.” These trends are also present in tax compliance, where businesses are seeking to “connect disjointed systems and data and standardize finance and tax processes.”

Connecting the dots between systems and departments is an important theme of the report, which emphasizes that “connected compliance” can improve decision-making, transparency and culture.

While PwC’s survey report addresses multiple types of compliance, it raises important questions for indirect tax leaders: To what extent do we enable a connected compliance approach? How can we improve our end-to-end compliance capability? Is our existing tax technology stack sufficient? This infographic can help address that final question.

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. ⁠