Many indirect tax and compliance processes — including planning, compliance, and audit defense — can benefit from automation. However, most companies are still handling these critical tasks via spreadsheets and email. And they do so at their own peril.
With complex tax rules changing all the time, relying on manual processes is risky business. You risk running afoul of regulators and being fined, not to mention tarnishing your reputation with customers, stakeholders and the public. As the organization’s chief risk officer, it is imperative that the CFO ensures that the company can survive potential tax audits and other tax-related risks.
To further complicate matters, organizations are not always positioned to take advantage of emerging technologies such as RPA to handle some of the routine compliance and auditing tasks. ERP solutions that are traditionally used for financial accounting and reporting are not necessarily designed with tax and compliance needs in mind.
“Unless you have a fully staffed tax department, you have members of the finance team spending part of their time tracking down sales tax rates and compliance requirements for the areas where your company does business,” said Mark Sieczkowski, Senior Product Manager at Vertex, Inc., a leading provider of tax technology and services.
Automation helps the CFO and the finance team sleep more soundly. “The team just gains confidence knowing that rates are being refreshed regularly and accurately,” said Samantha Sorlie, Indirect Tax Supervisor at Redbox and Vertex user.
Why CFOs are Best Positioned to Leverage Tax Automaton
CFOs are the financial stewards and have the most complete view of the current cash position and future revenue streams. The finance team also has regular interactions with department heads and business unit leaders.
Organizations look at each layer of taxation and the business with multiple lenses to capture tax obligations. This means examining trends in marketing, sales, how the business is generating new revenue streams, how it is networking/traveling/building eminence and invoicing, who the business sells to and what they are selling.
As risk leaders, senior finance professionals need to ensure that their system is updated with current tax rates. Automation, and an advisory firm with expertise, can help ease the burden of keeping up with the never-ending blizzard of changes in tax regulations.
Mitigating risk is an important benefit, but the data gathered by a tax automation platform is vital to business outcomes. The ability to examine trends in marketing, sales, how the business is generating new revenue streams, how it is networking/traveling/building eminence and invoicing, who the business sells to and what they are selling is key information that was not available using manual systems and legacy technology.
For more information on how a tax automaton solution can reduce risk and provide valuable insights into your business, click here to download this eBook.