This blog was last updated on September 21, 2021

As the digitization of tax continues, many organizations are looking to reduce the complexity and cost of tax compliance. In our latest spotlight report, created in partnership with Americas’  SAP Users’ Group (ASUG), “Boost Tax Compliance Capabilities and Visibility with SAP S/4HANA”, we discuss the most optimal time in the SAP S/4HANA migration process to include tax solutions.

One of the most simple ways to prevent additional costs (and headaches) is to ensure that tax solutions are at the front of mind as you plan to migrate operations to the cloud with SAP S/4HANA. Migrating to SAP S/4HANA can be a complicated process for your organization, but it also represents a tremendous opportunity to update and align your tax strategy to meet the challenges and needs of modern sales tax. Research done by Sovos in our State of the Market Report shows that the main goal of 57% of SAPinsiders’ finance and accounting strategy is to reduce the complexity and cost of tax compliance. 

Reduce cost

Tax is a crucial player in generating increased financial transparency and ensuring necessary cash flow. The best time to include sales tax in your SAP S/4HANA migration is at the very beginning of the process. Waiting can lead to higher costs, increased workloads and manual workarounds which can trigger audits. Additionally, the data gained from SAP S/4HANA reports can be crucial for supporting and defending audit inquiries if they arise.

Reduce complexity

One of the hallmarks of SAP S/4HANA is the ability to go from high-level reports to in-depth line-by-line analysis quickly and easily. The simplicity, speed and easy access to key data is the future of indirect tax compliance. 

Organizations operating on a multi-national scale need a centralized approach to tax with enhanced visibility and reporting capabilities. By driving inefficiencies out of the supply chain, you are able to reallocate resources to core business functions. Additionally, SAP S/4HANA allows for the automation of tax processes in the cloud. Automation will not just reduce the burden of your tax team, but also that of your IT staff.

If the complexity of tax compliance is having a direct impact on your organization’s ability to function at its highest operational level possible, making the switch to SAP S/4HANA can reduce some of the burden for you. Start the integration process early, and be sure to include tax considerations.