Tax tools have traditionally been back-office applications, integrated with ERP systems and firmly rooted on-premises. “What we’re now starting to see is tax moving to the front office, certainly with e-commerce platforms, customer relationship management systems and supply chains,” says Jen. “Some of those systems are more oriented toward the cloud, so we are starting to see lifts in tax applications that integrate with those front-office applications to be more cloud-oriented—whereas in ERP, we still see it as more oriented to on-premises.”
The result, at many companies, is a hybrid approach that seeks to combine the best of cloud-native and on-premise solutions. Jen outlines some features of new applications in this ecology, for example, cloud-based systems that deliver the tax calculation and return as a single integrated user experience.
How ERP vendors are responding to the rise of cloud;
How Wayfair is affecting technology choices for remote sellers; and
How company size affects decisions around tax systems.
A close partnership between tax and IT is essential, Jen asserts. IT can help in selecting, configuring and supporting the platforms that tax relies on. What’s more, IT has an interest in ensuring that tax infrastructure stays aligned with corporate policy. “In theory, tax could go out and put a contract in place with a tax vendor without IT knowing,” Jen says. “But when something happens, who can support you? Partnering with your IT department can help you negotiate that and make sure the right IT questions are being asked around security, uptime, service level agreements and things like that.”
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.