With the global financial landscape always in flux, companies are constantly on their heels. Political upheaval threatens the ability of companies to calculate their tax burdens in a timely and accurate manner.
The recent Tax Technology Innovation and Automation benchmark research report found that the desire to reduce tax risks and potential errors and increasing regulatory complexity and compliance requirements are far and away the two most significant pain points driving how organizations manage their approach to tax compliance.
Organizations, particularly those that operate worldwide, cannot afford to have multiple different solutions strung together for different jurisdictions. This can lead to compliance gaps, lack of visibility, and potential errors that open them up to audits and other penalties.
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Global tax automation is essential for businesses and governments to ensure compliance, accuracy, and efficiency in an increasingly complex tax landscape. With multinational companies operating across multiple jurisdictions, managing varying tax laws, reporting requirements, and compliance deadlines manually is both time-consuming and error-prone. Automated tax solutions help streamline this process by providing real-time updates on regulatory changes, reducing risks associated with non-compliance, and minimizing human errors.
Managing Taxes Globally
To overcome some of the most challenging issues in tax compliance, many global enterprises are turning to Sovos. Its Compliance Cloud Platform helps support organizations that operate worldwide, ensuring the correct indirect taxes, VAT and Sales and Use Tax (SUT), are being applied or paid.
Sovos’ automated solutions also enhance efficiency by accelerating tax calculations, filing processes, and audit preparations. This allows users to allocate resources more effectively, focusing on strategic financial planning rather than manual tax administration. Additionally, automation improves transparency and reduces the risk of fraud by ensuring consistent application of tax rules. As governments increasingly adopt e-invoicing requirements, automated tax reporting helps ensure compliance.
SAP Perspective
Adopting automated tax solutions is especially important for SAP organizations making the move to SAP S/4HANA. Digital transformations need to take business process transformations into consideration, including tax compliance.
Companies should think of this process like moving into a new house. Imagine thinking about what furniture you need to buy after you moved in. No one wants to live in an empty house for months, sleeping on the floor. SAP organizations need to pad out the tax capabilities of their new deployment with an add-on like Sovos, ideally ahead of time as adding it afterwards is not as cost effective.
As digital taxation evolves, businesses that adopt global tax automation will remain agile, compliant, and competitive in the global market, avoiding costly penalties and improving operational efficiency.
What This Means for SAPinsiders
Make room for growth. Organizations with designs on expanding their operations must consider how the expansion will affect their tax practices. Companies should not have to scuttle plans because their tax teams cannot keep up. Instead, they should find scalable solutions that can accommodate worldwide requirements and ensure they remain compliant.
Don’t move into an empty house. Tax compliance should not be an afterthought, even when it comes to important projects like the move to SAP S/4HANA. Organizations can maximize ROI while reducing time to value if they prepare essential workflows like tax compliance before the move is completed, installing cloud-ready solutions that can make an impact as soon as the go-live date arrives.
Stay on the front foot. With so many tax regulations coming at companies from nearly every jurisdiction, they cannot afford to change their tax compliance practices manually, one at a time. SAPinsider found that automating and ensuring compliance in direct and indirect tax reporting is the top tax technology strategy among SAP organizations, at 47%. Relying on automation frees up tax professionals to do other important work while ensuring there are no compliance gaps worldwide. Companies need to rely on an experienced automation partner like Sovos to ensure compliance.
