Today’s tax departments continually look for ways to streamline their operations and reduce audit risk. That focus is not just on the sales side of the business, but on the procurement side as well.
Regardless of whether you’re using your ERP system or implementing a new procurement platform, managing tax in the procure-to-pay process requires constant collaboration between tax, IT, procurement, and accounts payable teams. Without this partnership, it will significantly increase audit risk and inefficiencies within AP.
The manual process of tax research and updating financial systems can strain in-house tax and IT resources, and lead to tax errors. Even when these systems are updated with the latest tax content, their native tax functionality is usually not granular enough for today’s complex tax landscape.
At the same time, tax coding decisions on purchase orders and supplier invoices are being made in the AP department instead of the tax department; and all this is happening at a time when tax authorities are increasing audit activity.
Integrating a tax engine automates sales, use, and value-added tax determination to improve the accuracy of taxes paid and accrued. It uses rules-based calculations instead of human decisions. It applies the same tax logic across the procure-to-pay process: at the requisition and purchase order stage, and at the invoice reconciliation and approval stage.
Adding a tax engine for your procurement process brings benefits across tax, IT, and purchasing. It reduces the burden and cost of continuous in-house tax research, since tax content is maintained by the tax engine provider. There’s less IT support needed to implement tax changes, since this can be managed by the tax specialists themselves. It improves tax accuracy since the functionality is more robust than native ERP or procurement systems.
You can introduce consistent tax coding for reliable, repeatable accounts payable process, where tax own tax decisions. And you can integrate a single tax engine to all your financial systems across sales and purchasing, for centralisation and scalability.
Add a tax engine to your procurement process today to improve tax accuracy, reduce IT support, increase efficiency, increase scalability, and improve audit performance.