Accuracy and Agility: The Procurement Function, Global Supply Chains, and Tax Complexity

Global supply chain agility is a strategic priority, but indirect tax complexity can quietly undermine it. This research report, commissioned by Vertex and conducted by International Tax Review, draws on a survey of more than 960 senior executives across tax, procurement, finance, and IT functions in multiple countries and industries.

The scale of the problem

Dealing with indirect taxes in the supply chain consumes significant time and resources. Most accounts payable departments spend 13 to 24 hours every month just keeping up with tax changes. Eighty percent of tax functions spend a similar amount helping AP do the same. Meanwhile, 86% of all respondents say tracking global tax changes is growing more complex, raising the risk of errors. IT teams face the same pressure: 59% report that maintaining tax environments across multiple platforms requires high effort.

Automation is widespread but falling short

Almost all companies have moved to automate tax determination. But automation alone has not solved the problem. Ninety-five percent of executives are aware of mistakes that led to incorrect VAT payments. Tax coding errors at a rate of 1.1% to 3% are common, and experts warn that even a 2% error rate can mean millions of dollars in incorrect invoice processing. More than two-thirds of survey respondents say they would be concerned if a procure-to-pay audit happened today.

Two paths to better tax determination

The research points to two areas where companies can make the biggest gains. First, the technology matters. Companies using integrated tax engines see dramatically better results: only 7% received a negative audit finding in the past five years, compared to 35% of companies relying on ERP systems alone. Error rates above 1% affect just 21% of tax engine users versus 49% of others. But technology only works well inside a well-designed IT environment. One source of data truth is essential, not data scattered across multiple systems.

Second, cross-functional collaboration is essential. Tax, procurement, accounts payable, and IT must work together with clear responsibilities and shared processes. When AP staff are measured only on invoice volume and not on accuracy, errors follow. When tax teams are brought in early (during procurement solution evaluation, not after) outcomes improve. Companies that include error rates in AP performance metrics reduce coding mistakes far more effectively.

Why this matters for procurement

Indirect taxes apply to every procurement transaction. Getting them wrong creates real financial risk: fines, penalties, interest, and reputational damage. In some cases, supply chain operations can halt entirely. Getting them right builds stronger vendor relationships and supports the supply chain agility that gives companies a competitive edge. This report gives procurement and tax leaders a clear picture of where the gaps are, and what better looks like.