The irony of so-called “friction-less” procurement transactions is that creating a convenient, user-friendly customer experience requires difficult work behind the scenes.
This difficult work extends to indirect taxes, and procurement teams need to be aware of indirect tax complexity and the factors that may increase audit risks. For their part, tax groups need to ensure that all relevant tax rules and rates are applied and kept current, ideally via tax automation. Procurement and tax systems need to be integrated.
“Seamless” – a commonly used adjective of friction-less – is also a tricky word. It usually means that a purchaser is going to have a user-friendly experience when procuring a good or service. In the B2B world, getting to that single-click point takes a fair amount of business process, technology and integration work.
A new white paper, 7 Considerations for Enhancing Procurement Technology Implementations, takes a close look at the business process, technology and integration lifting needed to get procurement transactions and their tax calculations operating in a seamless manner.
One of the best ways to get started on this work is by focusing on the underlying purpose of technology implementations, which really boils down to helping users do their jobs better. Advanced procurement systems and platforms support procurement groups’ digital transformation progress; deliver a faster, more convenient purchasing experience to internal customers; and strengthen relationships with suppliers. AP teams are also procurement customers and partners, and they count on procurement systems to furnish accurate accounting data. Tax automation helps tax groups achieve and sustain tax compliance as efficiently and effectively as possible, while freeing up resources to focus on long-term tax planning and other strategic endeavors.
These objectives are straightforward, but they often get lost in the shuffle. When that occurs, terms like “friction-less” and “seamless” don’t apply in ways that we hoped they would.
Please remember that 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.