Sovos was on the road for one of our local Global Compliance Series (GCS) events at The Palm in Los Angeles last week. Our experts — Matt Walsh, Principal of Indirect Tax at Sovos, and Tim Kirkpatrick, Director at PwC — presented to tax leaders from primarily retail and manufacturing businesses on the challenges of managing tax compliance along the Procure-to-Pay process.
Not surprisingly, many businesses at the event still consider their AP processes to be labor-intensive, manual endeavors. They use a combination of spreadsheets and rate files, opening the door for to human error and opening their organizations to compliance risk.
Discussion also revolved around the advantages and limitations of using tax matrix tools, invoice verification, automated tax tolerance processing and evaluated receipts settlement (ERS), which were also challenges several manufacturers experienced.
Evaluated Receipts Settlement Challenges
The group discussed the challenges of ERS within the AP Determination process, while Sovos and PwC demonstrated how companies are automating the process to determine tax due to the seller, to assess vendors’ nexus profile and how they can automatically evaluate an invoice to determine taxes paid to the seller and use taxes to be accrued.
The Future of Tax Compliance
After PwC demonstrated some tax compliance automation possibilities with Sovos, they provided a brief look into the future of tax compliance over the next five years:
- Even more significant transition to real-time reporting and real-time settlement, where:
- Traditional reporting and payment will become redundant.
- Examples of what’s happening in Brazil, China and Spain will become the norm.
- Payment providers may start to assume the role of tax collectors.
Learn more about real-time tax payments and reporting in a recent byline by Matt Walsh at CPA Practice Advisor, here.
- We will see a divergence between two core models:
- Countries that will focus on the quality of your systems
- Countries that will want access to all your data, and now
Both models will require effective systems, controls and processes.
- We will see much greater use of analytics:
According to Matt, data quality will be the new audit battleground, there will be greater requirements for transparency and data scientists will be as prevalent as tax professionals.
Couldn’t join us in L.A.? Don’t miss the upcoming Webinar, “Leading Practices in Automating Tax Compliance Along the Procure-to-Pay Process.”
Get the eBook: Tomorrow’s Tax Leader – How to Cultivate Talent and Technology to Succeed Amidst a Volatile Tax Landscape to learn 5 critical skills today’s tax professional will need to succeed.