When New York first passed its law defining what constitutes a “vendor” subject to collecting sales tax in the 1980’s, the idea of online shopping sounded like science fiction. In retrospect, NY may have effectively enacted the first “economic nexus” law when they drafted their definition of “vendor” to include a person who regularly or […]
Transactional and Accounts Payable Automation Over Blockchain at ISM 2018
I was curious if the buzz over blockchain, AI and machine learning at ISM 2018 would offer up some valuable use cases and “best practices” for attendees to take home and implement, or if the social and other online chatter would still be more focused on “future trends” and “predictions.” It appears the latter won out in reviewing a half dozen articles covering the event (granted none of the articles mentioned banks and according to Garret/Galland Research, nearly 80% of banks are developing their blockchain technology frameworks). Transactional automation and accounts payable automation was the focus for the CPOs on one panel.
In a show recap by Thomas, “4 Top Takeaways from ISM 2018,” Mikaela Tierney writes:
“By far one of the biggest themes of ISM 2018 was the growth and impact of new technologies on supply chain management. AI, blockchain, and machine learning, among other industry buzzwords…
“While many industry professionals spoke to the development and functionality of technological advancements like machine learning and blockchain, very few were able to provide concrete examples of applicability in supply chain management or across broader industry.”
So What Are Procurement Leaders Focused on Today?
While procurement leaders understand the value of more data integrity and transparency with blockchain, a roundtable of CPOs seemed concerned with more practical and present technology challenges within their supply chains.
One panel member, a vice president of global procurement at Archer Daniels Midland, expressed her digital goals over the next five years as being focused on centralization of the company’s sourcing and purchasing operations, along with automation of transactional activities. This, she said, would free up her team to focus on supplier relationships.
This focus on transactional and accounts payable automation is a necessary precursor to future digital transformation adoption, especially as the older C-suite either doesn’t quite see the value in these new innovative technologies or just take a more cautious, or agile, iterative approach to change as the complexity that makes up the connections between procurement, supplier, and now the tax administration itself, escalate to new highs with the emergence of real-time tax controls. Still, others may just see it as a way for those sitting in power to protect their pensions. Regardless, the procurement leaders of the future still need funding buy-in and support when most organizations are driven by sales and not sourcing.
The vice president and CPO at MGM Resorts, said, “We may need to lay the groundwork today and push them to prepare for things they don’t know they need yet.”
Beyond Technology and Technology for Beyond
Technological innovation and accounts payable automation and transformation aren’t the only things on the minds of up and coming procurement and supply chain professionals. The Institute of Supply Management, which partners with Thomas to showcase young supply chain professionals in their “30 Under 30 Rising Supply Chain Stars Recognition Program,” cited an emphasis on communication and humility from this group of rising young stars.
As they begin to work on geographically dispersed and international teams, and as procurement moves from the back office to a more crucial, strategic front-office function, soft skills will be more important than ever, especially in communicating the value of the technology they need to prepare their organizations for the radical regulatory change happening across the globe.
The CPO for DowDuPont’s agricultural division echoed the panel’s notion that contingency planning has become more important. His organization is focused on new areas of risk, including specific country regulations across the globe.
Accounts Payable Automation Meets Sales and Use Tax Automation
Sovos clients are extracting more value from their procure-to-pay process as they prepare for a potential downturn in the economy and for what’s inevitably next in regulatory change. One way they’re accomplishing that is automating sales and use tax determination on invoices and improving vendor validation to reduce overcharges and undercharges while improving vendor relations by improving purchasing tax accuracy as they go using Sovos Use Tax Manager.
Ensuring the business is accurately paying every invoice, not just spot checking a handful, improves the bottom line from a procurement perspective, even if marketing and sales were the only groups to get the big-ticket technology items they asked for this quarter. Procurement professionals should find it easy to communicate the value of this tool to their bosses. For more resources on Sovos Use Tax Manager, visit https://learn.sovos.com/introducing-use-tax-manager.
Download the ASUG white paper, “Risky Business, How to Beat the Inefficiencies of Tax Compliance on Purchases,” to learn:
- The clear and present risks associated with an increase in audit frequency and scrutiny on sales tax, and in particular, use tax, on purchases.
- Current processes and technology your peers are using across the procure-to-pay process for tax compliance with varying results.
- The necessary steps to reduce risks and burdens of tax compliance on purchases across your organization
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