Technology Pain Points in Global Tax Management

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What do SAP users see as their top pain points for global tax management? An SAPinsider benchmark report asks that question, and the answers may surprise you

The top two challenges identified were:

  1. Integration of the ERP platform and apps with the global tax engine; and 
  2. Control and governance challenges. 

Each of these was cited by nearly half (48%) of survey respondents. The workforce skills gap came in third, at 37%. 

That tends to fall in line with feedback I receive from customers. A tax/ERP initiative is a big job, with many – highly manageable – ramifications. And the tax technology skills crunch is a familiar and ongoing issue. It’s a bit of a surprise, though, that all of the top three pain points were up quite a bit from a similar SAPinsider study last year.

The significant drop-off, compared to last year’s results, in the percentage of respondents who cited indirect tax determination and indirect tax reporting as pain points – 19% and 17%, respectively, in 2022. Last year, these were the top challenges, both cited by 47% of 2021 survey respondents. 

Here’s what this all means. Sales tax compliance is genuinely challenging. As the report points out: “conversations with end users and experts confirm that indirect tax compliance complexity continues to accelerate.” Instead, according to the report, “organizations are placing a greater emphasis on operationalizing their global tax functions to manage compliance risks more effectively. To meet these challenges head-on, organizations must invest in the right tools and processes to streamline their tax operations.”

Companies are achieving success in this area, and that’s enabling a shift in attention to broader challenges like integration and governance.  The report offers highly practical tips to help build a strong foundation for global tax management. The suggestions include future-proofing against the impact of workforce factors and leveraging collaboration between tax and IT. Definitely worth a look.

For a deeper look at these pain points and global tax management challenges more broadly, listen to this podcast

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.

Explore more Resources from our Industry Influencers:

Michael J. Bernard, Chief Tax Officer – Transaction Tax at Vertex Inc. Vertex's Chief Tax Office (CTO) provides insight regarding the impact of tax regulations, policy, enforcement, and emerging technology trends on global tax department operations.

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.

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Global Tax Management Survey: Tax Technology Pain Points

The survey report provides an in-depth analysis of responses from more than 100 members of the SAPinsider community. Participants include members of IT, finance and tax functions.

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