5 things to consider before trusting your ERP with tax

Over the last decade, we’ve met plenty of finance professionals from businesses around the world who see tax determination as a simple, straightforward task. ‘My ERP will manage that, right?’

Well, we might be biased, but having implemented our automated tax solution for over 100 organisations, designed all manner of bespoke features to meet unique requirements and used our expertise to clean up the mess caused by inadequate native functionality, we know all about the limitations of your ERP and the sticky situation it can land your business in.

If you’re still intending to put your faith in your ERP to manage key tax processes, we’d advise you to consider these five factors:

1) Does your team have the required expertise in tax and IT?

Configuring and maintaining an accurate and effective tax setup requires a multitude of experts spanning several areas of your business. For starters, you’ll need skilled professionals in both tax and IT.

We’ve spoken with many companies that believe it’s possible to task just one of these teams with implementing an adequate tax system – but it’s not! Specialist tax knowledge is essential to install the processes and rules you’ll need to achieve compliance, while IT experts are needed to develop, integrate and maintain the necessary infrastructure.

2) What does the future hold?

According to a recent survey, the top reason for investing in an ERP is to facilitate growth. What’s more, the same study found the average cost of implementing an ERP is $9,000 per employee who will use the system once it is up and running.

With such a substantial cost attached to an ERP project, you need to get it right by introducing solutions that are truly scalable. Your current set-up may currently deliver reasonable results while processing 50,000 transactions a year, but how will it handle 500,000? Or five million?

Most ERPs are configurated for present requirements and sold as such. But a specialist tax solution is built for the future.

3) Think about the cost of inefficiencies

Employees at UK businesses waste an average of more than three hours a day working with inefficient systems, costing businesses vast sums every year.

ERPs are not set up to include tax content specific to the jurisdiction in which you are trading, do not typically offer all the relevant fields to ensure every transaction is compliant and require many more manual inputs than a specialist tax solution.

Before relying on your ERP to manage tax, consider the time lost and financial cost of doing so.

4) Is your business set up to manage tax in the long term?

Just as you need to future-proof your technology by ensuring its scalability, think ahead in terms of your human resources. Tax, finance and IT teams are often pulled in many different directions by internal stakeholders. You may get sign-off for the resources you need for an initial project, but will you have experienced experts available 12 months down the line when major maintenance or an upgrade is required?

With our tax solution, all the hard work is completed by our team of functional consultants and we’re ready to help you resolve any new challenges – whenever they arise.

5) What about responding to new rules and regulations?

In the last week alone, dozens of countries around the world – including Portugal, Kenya and Norway – have changed VAT rates or updated rules. However you manage tax, you need to be flexible and responsive to ensure your system locks in the latest rates and regulations with immediate effect.

At Innovate Tax, our customers benefit from ongoing access to our 24/7 Support Desk. With tax regulations changing all the time, we believe it’s important to have the right people on hand to make vital updates to your tax solution as soon as you require them.

For more information on implementing an automated tax solution to suit your business, get in touch with us today.

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