What's Happening?
Recent research highlights a significant gap in how tax departments are integrated into technology planning within companies. Despite the increasing importance of real-time reporting and AI-powered systems, many businesses still treat tax as a backend
function, leading to inefficiencies and potential compliance risks. The study, conducted by Vertex Inc., surveyed 1,050 senior IT, finance, and tax leaders, revealing that while 94% of organizations recognize the need for closer collaboration between these functions, only 12% have achieved full integration. This lack of integration can result in operational drag, wasted resources, and reduced business agility. The research suggests that tax should be a required stakeholder in technology planning to ensure alignment on requirements, data, and workflow design.
Why It's Important?
The integration of tax departments into technology planning is crucial for mitigating business risks associated with compliance and operational efficiency. As companies increasingly adopt AI-driven workflows, the potential for errors in compliance and data management grows, making early tax involvement essential. Without proper integration, businesses risk automating misalignments, which can lead to significant financial and reputational damage. By involving tax departments early in the planning process, companies can create more adaptable technology environments, reduce compliance risks, and improve overall business performance. This shift is particularly important as tax requirements continue to evolve, necessitating a more collaborative approach to technology and data management.
What's Next?
To address these challenges, companies are encouraged to redefine their operating models to include tax as a core component of technology planning. This involves establishing shared ownership of data and processes, aligning teams around common metrics, and treating data as an enterprise asset. As businesses move forward, the focus will be on building governance structures that facilitate collaboration between IT, finance, and tax departments. This approach will help organizations adapt to changing tax requirements and leverage AI technologies effectively, ultimately leading to more efficient and compliant operations.
