A Way to Better Manage Tax Complexity

By Gina Chen posted 13 days ago


Companies doing business globally must account for over 19,000 taxing jurisdictions with different rates, regulations, and requirements. Even more overwhelming is the fact that the rules and rates can change at any time. Does your tax team have what it needs to manage that level of complexity? Ask yourself:

•    Am I confident that our tax calculations are more accurate at all times?
•    Can we easily adapt to changing products, markets, and sales channels?
•    Are we at risk for non-compliance and/or audit penalties?
•    Do we have the reporting data we need to make better decisions? 
•    Could my tax team use their time in a more productive way?

Remember, when it comes to tax, one small error, when scaled across hundreds or even thousands of transactions, can put your organization at risk. 

Something to consider — and what many Oracle users have done already — is to integrate a 3rd party tax engine. A tax engine helps organizations by automating tax content updates and tax calculations across transaction source systems like your ERP, e-commerce, and procurement systems. 

This means that as the tax content changes (which we’ve discussed it’s bound to do) it is automatically maintained and updated in one central tax engine, then leveraged across multiple transaction systems, leaving you with a single source of truth. 

This opens your tax team up to be more efficient by offering them with five major benefits:

  1. Automatically calculating tax and maintaining tax data: You know at all times that your tax calculations are accurate and up to date with the latest rules and regulations.
  2. Eliminates manual processes, freeing resources: Your team will be freed from manual calculation and research, taking up valuable time and resources. 
  3. Improves tax accuracy, improving audit performance: Your organization can limit the risk of human error that leads to non-compliance and audit penalties.
  4. Provides better tax and compliance reporting and control. You will have better visibility into your tax data to help forecast and provide better decision making.
  5. Increases productivity for tax, finance, and IT teams: Beyond benefitting your tax team, finance and IT are no longer bogged down by the consequences of an inefficient method of managing tax.

As you can see by leveraging a tax engine for tax automation, you can reduce manual processes, stabilize process efficiency, improve audit performance, and reduce risk. You will also establish a tax process that’s more reliable and scalable to support business growth — all major wins for any organization.

So, if you feel that the way your team manages tax today is less than efficient, a tax engine might be a great solution. 

To learn more details about why tax engines are valuable, join us at Ascend 2023 on June 11-14, 2023 at the Caribe Royale Resort in Orlando, Florida. Visit the OATUG Tax Panel on Sunday, June 12 at 2:30 pm where I will be along with other Vertex tax experts, to help inform you and answer any questions you may have. We look forward to seeing you there!