95% Of Procurement and Finance Professionals Struggle to Track VAT Changes Due to Tax Landscape

Vertex, Inc. , a global provider of tax technology solutions, announced the key findings of research revealing that 95% of procurement and finance professionals struggle to track value-added tax changes due to the increasing complexities of the evolving tax landscape. These constant changes in global indirect tax requirements impede international business transactions and increase the risk of audit failure.

joint research conducted by International Tax Review (ITR) and Vertex research the issues surrounding accurate determination of indirect taxes for companies with cross-border supply chains and draw on a global, multi-industry survey of nearly 1,000 senior executives from tax, finance, procurement and information technology functions. The study also included in-depth interviews with corporate tax leaders and other experts.

According to the participants, the inability to properly track VAT changes interferes with the ability of global organizations to remain competitive even though eight out of ten companies are taking steps to improve flexibility in their procurement processes in response to the ongoing disruption in the supply chain.

Inadequate levels of automation are causing problems for companies looking to stay on top of ever-changing indirect tax rules and regulations, and as a result, two-thirds of respondents report that they are concerned about disclosing tax-setting issues in their purchases to-pay system if they are made. Audit next week. This is not surprising given that 16% of those surveyed claim the IRS is not involved when evaluating a purchasing solution.

When purchasing and tax management intersect (master data and vendor setup; requisition and purchase order; goods receipt; invoice verification; and invoice posting), inaccuracies resulting from confusion about defining indirect tax or computation can lead to serious consequences such as economic costs, fines, and reputational damage. With customers and suppliers – and in extreme cases the entire company can be forced to stop.

Effective indirect tax management for audit success

93% of companies that use a tax engine achieve audit success compared to companies that rely solely on ERP systems to determine taxes.

This, along with the cross-functional relationships between procurement, tax, accounts payable, and information technology, as well as the right organizational processes, helps future-proof business in a volatile and competitive market.

“Supply chain fragility, digital demand, and the evolution of the tax landscape have shifted the state of play, making resilience the new business currency. However, identifying indirect taxes remains a serious problem, as many businesses use valuable time to monitor tax changes or are unaware of errors. that occur within operations”, stated VAT Manager Vertex Peter Powerhoff.

Indirect taxes are an important part of procurement, and many businesses are already using automation for procurement processes, but in order to deal with the required complexities of current indirect tax rules, adopting a tax engine can ease this burden and put businesses in the best position to deal with these challenges. .

The International Tax Review, commissioned by Vertex, surveyed just under 1,000 senior procurement, tax, accounts payable and information technology executives, working for companies with annual revenues ranging from £150m to over £200bn.

  • Polly Jane Harrison

    Polly is a North Wales journalist, content creator and opinion-maker. She has written for a number of publications, usually hovering around the topics of fintech, technology, lifestyle and body positivity.

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