Your 2025 Tax Technology Plan is Here

Approaching ERP end-of-service dates. Legacy system maintenance. A widespread need for improved scalability, flexibility and cost-efficiency. E-invoicing mandates and other regulatory shifts….

The factors driving the need for technology modernization and cloud migrations seem to be multiplying. This need affects all areas of the business, including indirect tax groups. The burden of maintaining legacy technology systems also qualifies as a C-suite and board issue. In North Carolina State University and Protiviti’s annual “Top Risks” report on top risks – research based on a survey of global corporate directors and C-suite leaders – “existing operations and legacy IT infrastructure unable to meet performance expectations” qualifies as a top 10 risk concern.

As an indirect tax leader, you can expect your CFO to ask questions concerning the efficacy of your current tax technology stack, along with your plans to improve in the future. CFOs will be keenly interested in the system's security, capacity to handle transactional volumes, and ability to scale for future catalog and geographic expansion.

I’m a firm believer in the value of creating, and regularly updating, a tax technology roadmap. As you do so in 2025, here are some considerations for upgrading your tax automation plan:

• Identify quantitative and qualitative benefits: Decreases in tax audit assessments, assigning tax professionals to more impactful opportunities (particularly in planning) and increases in the number of returns processed represent common quantifiable returns that can and should be included in tax automation business cases. It’s equally important to address qualitative points, such as the (potentially major) benefits that arise when tax groups can quickly scale to support sales in new geographies.
• Participate in ERP upgrades and cloud migrations: I’ve made this point before and will continue to emphasize it: the tax group’s early and active involvement in ERP implementations is crucial. These interactions help ensure that tax compliance and related tax data needs are addressed in system configurations.
• Map automation capabilities to the largest tax compliance risks: CFOs and procurement leaders tend to pay closer attention when tax compliance and reporting risks are rated according to their likelihood and impact. Describing how new tax automation can mitigate those risks will strengthen your hand.
• Know your tax data requirements: New e-invoicing mandates and related real-time reporting rules require many indirect tax groups to tap new data sources. After identifying all of the finance and accounting data needed to address compliance requirements, tax groups can communicate these needs with fellow project members so that the ERP implementations address all tax compliance requirements. (Also: keep in mind that your tax group’s data-access needs extend beyond compliance thanks to new analytical applications and functionalities that support tax planning activities.)

There are other points to make in your tax technology business case, including an emphasis on integration ease. I take a deeper look at those considerations along with a broader assessment of current tax compliance challenges and priorities in this recently published Tax Executive article.