ERP cloud migrations and tax automation upgrades propel finance and tax transformation journeys. When planned, designed and executed successfully, these systems migrations and related transformational efforts offer tremendous value thanks to the efficiency, accuracy, cost-reduction and innovation-related benefits they deliver.
It’s important for tax leaders and their teams to know what drives successful technology transformation initiatives. A great way to expand their knowledge is by considering what’s possible.
Cloud migrations and upgrades present a significant opportunity to strengthen the tax technology ecosystem – it’s easier and more cost-effective to make a range of improvements while the hood is open, so to speak. On ERP and tax automation projects we’ve helped organizations conduct in the past year or so, we’ve seen growing interest in the following ways to enhance the tax technology ecosystem:
Ensure that master data fueling the tax engine is complete and accurate: The most sophisticated tax automation solution is only as good as the data being fed into it. Tax groups involved in ERP migrations that include tax automation upgrades should ensure that master data is complete and accurate.
Leverage advanced automation for use tax determination: Legacy tax engines and native ERP tax logic frequently lack the ability to make complex tax determinations. This can result in an accounts payable professional making difficult tax determination decisions, which is not ideal, of course, and often leads to tax payment errors.
Conduct process optimization reviews: Prior to an ERP upgrade or migration that includes tax automation, it helps to review current tax processes to identify areas that will benefit from greater efficiency and/or effectiveness.
Consider exemption certificate management improvements: Advanced tax technology solutions contain capabilities that automate exemption certificate management. Tax groups should ensure these capabilities will be fully leveraged once the new solution is in place.
Leverage data analytics: While many tax departments have their hands full performing monthly reconciliations and getting returns out the door, they should look for ways to review tax data for accuracy, spot trends and strengthen tax planning activities. There are solutions out there that can help with this effort.
Make post-audit enhancements: Under and overpayment reviews can help tax groups find credits following audits that expose areas requiring improvements. Overpayment reviews can sometimes even fund the enhancements, which could result in little to no out-of-pocket expense to the company.
Please remember that the Tax Matters 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 Tax Matters are those of the authors and do not necessarily reflect the official policy, position, or opinion of Vertex Inc.
Justin Barnes is Vice President at DMA, responsible for providing strategic oversight and thought leadership to the Tax Technology practice. He works closely with clients to provide analysis of current state indirect tax processes and challenges, provide recommended solutions based on industry best practices, and provide oversight to solution delivery teams. He holds a Bachelor of Science (B.S.) focused in Information Technology from Excelsior College.