Vertex Inc., a global provider of tax technology solutions, has released a new survey revealing automation and digital transformation are top priorities for driving business growth in tax and finance, but many organizations still have work to do.
The 2024 Global Tax Transformation Report studied more than 600 global tax and finance professionals, manager level and above, and found that 80% consider tax and finance transformation key to business optimization, though only half of organizations have progressed in this direction. Challenges such as a lack of IT support (34%), budget constraints (31%) and talent shortages (28%) are cited as the main barriers to transformation.
“The increasing presence of real-time and near real-time digital tax reporting mandates, rates and rules updates and the rapid pace of global business highlights the immediate need for tax and finance transformation,” said Peter Boerhof, Senior Director of VAT for Vertex’s Chief Tax Office. “While our data shows that some organizations are on different stages of the digital transformation journey, there are still many that must take action soon to future-proof their tax and finance functions and position their organizations for success in this digital-first, modern business landscape.”
Amidst ongoing budget and talent limitations, almost half of the professionals surveyed (42%) look to tax and finance transformation to provide more cost-effective, agile technology architecture, and for automation to alleviate administrative tasks and allow time for value-driven work across departments. Currently, only 52% of finance processes and 56% of indirect tax processes in global organisations are automated. This is emphasized by the 77% of respondents who say the tax function is ahead in the digital transformation journey.
“Many organizations are becoming acutely aware of inefficiencies that hinder overall business growth. Our research reveals an increased pressure to implement a solution, starting with tax and finance functions,” said Michael J. Bernard, Vertex VP Chief Tax Officer. “When done correctly, this transformation can empower these skilled professionals to be more efficient in their day-to-day tasks – it reduces process complexities, fosters collaboration and gives time back to focus on work that will drive business forward.”
Among other factors, overcoming internal inefficiencies is the leading reason (39%) for tax and finance transformation. Other key findings in the report include:
- Automation empowers collaboration and compliance – 57% say it is becoming easier to collaborate with different teams in the compliance, tax determination and reporting processes.
- Keeping up with rates and rules changes tops the transformation wish list – 79% say ensuring systems are up to date with tax rates and rules changes is the most important task on their digital transformation journey.
- Digital transformation is not without skepticism – Organizations operating in more than 51 countries are the most skeptical about whether their current indirect tax technology is fit for purpose. This finding infers that the larger the organization, the greater level of concern around their existing indirect tax technology.
- Payroll automation tops the chart – 31% say that payroll is a top 5 automation priority, followed closely by indirect tax (30%) and direct tax (30%).
- ROI is in the forecast – 49% say they expect to achieve ROI through better forecasting and decision-making, closely followed by a more cost effective and future proofed technology architecture and a reduction in or redeployment of staff in finance and tax teams through process automation.
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Tags: Accounting, Financial Reporting
